[Federal Register Volume 63, Number 41 (Tuesday, March 3, 1998)]
[Rules and Regulations]
[Pages 10321-10338]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5358]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Parts 500, 505 and 515
Foreign Assets Control Regulations; Regulations Prohibiting
Transactions Involving the Shipment of Certain Merchandise Between
Foreign Countries; Cuban Assets Control Regulations: Civil Penalty
Administrative Hearings
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule.
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SUMMARY: The Treasury Department amends the Foreign Assets Control
Regulations and the Cuban Assets Control Regulations to add procedures
for the conduct of administrative hearings in civil penalty cases and
for settlement of civil penalty cases in lieu of administrative
hearings. A conforming amendment is made to the Transaction Control
Regulations. The final rule is issued after consideration of public
comments received on the proposed rule published in the February 14,
1997 Federal Register.
EFFECTIVE DATE: This final rule is effective April 2, 1998.
FOR FURTHER INFORMATION CONTACT: Mrs. B.S. Scott, Chief, Civil
Penalties Program (tel.: 202/622-6140), or William B. Hoffman, Chief
Counsel (tel.: 202/622-2410), Office of Foreign Assets Control, U.S.
Treasury Department, Washington, DC 20220.
SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability
This document is available as an electronic file on The Federal
Bulletin Board the day of publication in the Federal Register. By
modem, dial 202/512-1387 and type ``/GO FAC,'' or call 202/512-1530 for
disk or paper copies. This file is available for downloading without
charge in WordPerfect 5.1, ASCII, and Adobe AcrobatTM
readable (*.PDF) formats. For Internet access, the address for use with
the World Wide Web (Home Page), Telnet, or FTP protocol is:
fedbbs.access.gpo.gov. The document is also accessible for downloading
in ASCII format without charge from Treasury's Electronic Library
(``TEL'') in the ``Business, Trade and Labor Mall'' of the FedWorld
bulletin board. By modem, dial 703/321-3339, and select the appropriate
self-expanding file in TEL. For Internet access, use one of the
following protocols: Telnet = fedworld.gov (192.239.93.3); World Wide
Web (Home Page) = http://www.fedworld.gov; FTP = ftp.fedworld.gov
(192.239.92.205). Additional information concerning the programs of the
Office of Foreign Assets Control is available for downloading from the
Office's Internet Home Page: http://www.ustreas.gov/treasury/services/
fac/fac.html, or in fax form through the Office's 24-hour fax-on-demand
service: call 202/622-0077 using a fax machine, fax modem, or (within
the United States) a touch-tone telephone.
Background
The Foreign Assets Control Regulations, 31 CFR part 500, and the
Cuban Assets Control Regulations, 31 CFR part 515 (jointly, the
``Regulations''), are amended to provide for detailed procedures
governing administrative hearings, as provided in section 1710(c) of
the Cuban Democracy Act of 1992 (22 U.S.C. 6001-6010 -- the ``CDA''). A
conforming amendment is made to Sec. 505.50 of the Regulations
Prohibiting Transactions Involving the Shipment of Certain Merchandise
Between Foreign Countries, 31 CFR part 505, which incorporates by
reference the penalty provisions of part 500. Because the CDA amends
section 16 of the Trading with the Enemy Act (50 U.S.C. App. 16) to
permit the imposition of civil monetary penalties and civil forfeiture
with opportunity for hearing and discovery, subpart G of the
Regulations is revised to establish the procedures governing
administrative hearings.
This final rule addresses the comments received during the public
comment period and establishes the Office of Foreign Assets Control's
(``OFAC'') civil penalties administrative hearing process.
Response to Public Comments
On February 14, 1997, OFAC requested public comments on proposed
rules (31 CFR Parts 500, 505 and 515). OFAC received two letters
commenting on the proposed hearing procedures. The commenters were
Lonnie Ann Pera, Esq., of Zuckert, Scoutt & Rasenberger, L.L.P., and
D.E. Wilson, Jr., Esq., of Lane & Mittendorf LLP. A number of
procedural and substantive changes have been made to improve clarity
and to reflect concerns raised in the comments submitted.
In response to the suggestion of one commenter, the sections have
been renumbered to create new headings to facilitate use of the
regulations. In the discussion below, the new headings are used with
the previous heading listed in parentheses. The comments below apply
equally to part 500 and 515, but, because the sections are identical,
reference is made only to part 500.
Section 550.701(b)
Criminal Penalty Increase:
One commenter suggested that more information about increased
criminal fines for violations of the Trading with the Enemy Act
pursuant to 18 U.S.C. 3571 be included. Further information is
provided.
Section 500.702
Calendar Days:
Both commenters raised a number of procedural points requesting
clarification of filing and service requirements. Many of their
suggestions have been incorporated into the final rule. Filing
deadlines are now specifically counted in terms of calendar days,
unless otherwise noted.
Notice in the Prepenalty Notice of Waiver of Discovery:
One commenter believed that the prepenalty notice should
specifically inform the respondent that a request for discovery must be
included in the response or the right to discovery is waived. This
additional notice to the respondent is now included in
Sec. 500.702(b)(2)(iii). The second commenter stated that the waiver of
respondent's rights to discovery and hearing where the respondent has
filed in an untimely manner was ``draconian.'' OFAC disagrees.
Prepenalty notices and OFAC regulations clearly set out deadline
requirements which respondents must satisfy.
Service:
One commenter stated that Sec. 500.702(c)(3) should require the
individual serving the prepenalty notice to sign and to indicate on the
certificate the date on which the prepenalty notice was served. The
paragraph has been amended to require that the certificate include both
the server's signature and the date of service.
Section 500.703
Notice of Address Change:
Each respondent is required to provide a name and address for
service. One commenter asked that OFAC define the term ``interested
parties'' found in section 703(b)(1)(iii), which contains the
requirement for accurate address information. The commenter requested
that the possible sanctions for failure to comply with this provision
be specifically set forth in the regulations. OFAC has changed the term
``interested
[[Page 10322]]
parties'' to ``parties'' to clarify who must be notified of address
changes. The imposition of sanctions for failure to comply with this
requirement is committed to the discretion of the Administrative Law
Judge. Consistent with the Administrative Procedure Act, 5 U.S.C. ch. 5
and 7 (the ``APA''), the Administrative Law Judge has the authority to
conduct the hearing including the authority to ``regulate the course of
the hearing and the conduct of the parties and their counsel.''
Sec. 500.706(b)(5).
One commenter believed that if a respondent is represented by
counsel, OFAC need only know the current name, address and telephone
number of respondent's counsel and that notice only need be sent to the
parties' counsel. OFAC agrees it is sufficient for a party represented
by counsel to have the counsel provide the appropriate name, address,
and facsimile machine and telephone numbers. This provision has been
amended accordingly.
Informal Settlement:
One commenter stated it was not clear whether OFAC would or could
toll the 30 calendar day response period during settlement discussions
and requested clarification regarding the required mechanism for
tolling the response period under Sec. 500.703(b)(3). OFAC believes
that the provision is clear. There is no automatic tolling of the 30-
day response period during settlement discussions. A respondent engaged
in settlement discussions for 29 calendar days may not break off
discussions on day 29 and then receive 29 additional calendar days to
file a response to the prepenalty notice. In this example, the
respondent would have only one remaining calendar day left in which to
file a response absent a clear agreement with OFAC to the contrary.
Where OFAC has responded affirmatively in writing that the 30 calendar
day response period has been tolled for ongoing settlement discussions,
the respondent will be informed in writing of the new deadline for
responding.
Section 500.705
Admissibility of Information into the Record:
One commenter expressed concern over the admissibility of evidence
into the record. OFAC has amended the language to emphasize that
information will be admissible into the record to the extent that the
Administrative Law Judge deems it admissible pursuant to Sec. 500.715.
Signature of a Requesting Party:
One commenter objected to OFAC's double signature requirement on a
request for hearing. Under the proposed regulations, Sec. 500.705(c)
required both respondent's signature and respondent's counsel's
signature on the request for hearing. OFAC agrees this is unnecessary
and has amended this requirement to allow signature either by
respondent or, if represented, by respondent's counsel.
Section 500.706
Notice of Appearance:
Both commenters sought clarification concerning the requirement for
notice of appearance and representation before the Administrative Law
Judge. The provision has been amended to reflect OFAC's intent that
parties or their counsel provide written notice to the Administrative
Law Judge that they are either a party or counsel to a party in the
proceeding before the judge. The notice of appearance must be provided
to the Administrative Law Judge. No particular format is required for
the notice of appearance.
Section 500.709 (proposed Sec. 500.706)
Motions, Interlocutory Appeals, Notice of Change of Address:
Both commenters supported the use of facsimile transmissions and
private expedited mail services to facilitate respondents' efforts in
meeting filing deadlines. One commenter questioned how the
Administrative Law Judge would be able to serve the parties with a
decision by certified mail and leave the parties sufficient time to
respond with an interlocutory appeal. Citing delivery problems with
certified mail in particular areas of the country, the commenter stated
that the parties may not learn of the decision until just before, or
possibly even after, the expiration of the 10-day period for appealing
the decision. OFAC has amended these provisions. Parties or the
Administrative Law Judge may serve or file copies of signed and dated
documents by facsimile transmission, courier, or other expedited means,
provided that the original, signed document is also sent concurrently
by registered or certified mail, return receipt requested. The date
stated in the date-stamped registered or certified mail postal receipt
constitutes the filing or service date.
Section 500.707 (proposed Sec. 500.706(g))
Interlocutory Appeal:
One commenter asked for more precise instructions in filing an
interlocutory appeal. The commenter also asked for a model form. The
Administrative Law Judge has the authority to provide particularized
instructions of this nature.
500.706(e)
Ex Parte Communications:
One commenter noted that the terms referring to ``party,''
``party's counsel,'' ``respondent,'' and ``any other individual'' were
used but not interchangeably. OFAC agrees with the commenter and the
paragraph has been amended to achieve more consistent usage of these
terms.
Section 500.710(e) (proposed Sec. 500.706(k)(5))
Exemptions from Discovery:
One commenter suggested that OFAC was treating as undiscoverable
Executive orders dealing with the treatment of national security
information even where the President has decided that certain of such
orders are not classified. This is not OFAC's position. This section
provides for withholding information requested in discovery where a
privilege is asserted. One available privilege applies to classified
information. Unclassified documents would not qualify for this
privilege.
The other commenter felt that a respondent would be compelled to
submit interrogatories before OFAC had time to set a hearing date. The
commenter suggested that the filing deadlines were already strict and
asserted that requiring respondent to serve interrogatories in advance
of scheduling a hearing date would prove ``unduly burdensome'' for the
respondent. OFAC does not agree. A respondent has 30 calendar days in
which to respond to an OFAC prepenalty notice and request a hearing and
discovery. Once the response is served upon OFAC, an Administrative Law
Judge will be assigned the case. The Administrative Law Judge will set
the hearing date, not OFAC. When the procedural schedule is not
prescribed under the regulations, the Administrative Law Judge has the
authority to establish the schedule. The Administrative Law Judge may,
for example, convene a pre-hearing conference to respond to scheduling
burdens being experienced by the parties.
Section 500.711 (proposed Sec. 500.706(l)(5))
Summary Disposition:
One commenter suggested that a respondent might not receive the
Administrative Law Judge's recommended decision for summary dismissal
in sufficient time to file an interlocutory appeal. The commenter also
requested that the regulations clarify whether the appeal is due within
[[Page 10323]]
20 days after the date of the Administrative Law Judge's decision or
after the date respondent receives the recommended decision.
OFAC agrees with the commenter's concerns and the need for greater
clarity on this point. Service by the Administrative Law Judge upon the
parties of recommended decisions and other orders might be delayed by
the use of U.S. certified mail, and this may impose hardships upon the
parties. This and other provisions have been amended to provide for
delivery of the Administrative Law Judge's signed and dated recommended
decisions and other orders by facsimile transmission, courier, or other
expedited means, concurrent with service by U.S. certified mail.
Section 500.711(e)(proposed Sec. 500.706(l)(5)) has been changed to
clarify that an appeal from the Administrative Law Judge's recommended
decision for summary disposition is due within 20 days of the date of
the judge's decision.
Section 500.713 (proposed Sec. 500.706(o))
Public Hearing:
One commenter suggested that the term ``notice'' required
clarification. OFAC has amended the language to include a specific
reference to the ``notice of hearing from the Administrative Law
Judge.'' Sec. 500.713(a). Thus, within 20 calendar days of the
Administrative Law Judge's notice of hearing, any party may file a
motion with the judge requesting a closed hearing.
Section 500.715(g) (proposed Sec. 500.706(q)(7))
Costs of Depositions:
One commenter requested that OFAC specify exactly which costs of a
deposition the requesting party must pay. OFAC believes that the
regulations are clear. All costs of depositions shall be borne by the
party requesting the deposition. Should a party requesting a deposition
object to fees or travel expenses sought by the deponent, the
requesting party may seek a ruling by the Administrative Law Judge.
Pursuant to Sec. 500.706(b)(4) and (12), the Administrative Law Judge
has the authority to cause depositions to be taken and to set fees and
expenses for witnesses, including expert witnesses.
One commenter asked that the term ``unavailable'' be defined for
purposes of Sec. 500.715(g). The commenter suggested that the
respondent must know whether a deposition is appropriate if a person
cannot attend the hearing because of a conflict, or whether the witness
must meet the ``unavailability'' requirements of the Federal Rules of
Evidence before the respondent may take a deposition. While the Federal
Rules of Evidence do not generally apply to this administrative hearing
process, the Administrative Law Judge does have the authority to take
and cause depositions to be taken. In the event a question or
controversy arises as to the ``unavailability'' of a witness, the
parties may seek a ruling by the Administrative Law Judge.
Section 500.716(g) (proposed Sec. 500.706(u))
Final Decision:
Proposed Sec. 500.706(u) provided for the final decision of the
Secretary or the Secretary's designee to be based on a review of the
proposed decision and the entire record of the proceeding. A commenter
questioned whether OFAC intended that the final decision be based upon
the parties' proposed decisions or on the Administrative Law Judge's
recommended decision. OFAC has amended Sec. 500.716(g) to read ``based
on a review of the Administrative Law Judge's recommended decision and
the entire record of the proceeding.''
Regulatory Flexibility Act
It has been determined that this final rule is not a ``significant
regulatory action'' as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It is hereby certified, pursuant
to the Regulatory Flexibility Act (5 U.S.C. 605(b)), that the final
rule will not have a significant economic impact on a substantial
number of small entities, so that no regulatory flexibility analysis is
required. The factual basis for this certification is as follows: Since
civil penalty procedures under the Regulations were adopted (June 29,
1993, for part 515; April 8, 1994, for part 500), all recipients of a
prepenalty notice under the Regulations have been provided the
opportunity to request an administrative hearing, with prehearing
discovery, prior to imposition of a penalty. Secs. 500.702(b) &
515.702(b). As of December 12, 1997, the cumulative number of hearing
requests pending was 41. Of these, only 5 involved respondents that are
small business entities with fewer than 500 employees. A respondent's
decision to use the administrative hearing process is strictly
voluntary, and any final agency action imposing a civil penalty, with
or without an administrative hearing, remains appealable pursuant to
section 702 of the APA.
The collection of information in the final rule arises in the
conduct of administrative actions or investigations by OFAC against
specific individuals or entities and is, pursuant to 44 U.S.C.
3518(c)(1)(B)(ii), not subject to the requirements of the Paperwork
Reduction Act.
List of Subjects
31 CFR Part 500
Administrative practice and procedure, Banks, banking, Blocking of
assets, Cambodia, Currency, Estates, Exports, Finance, Foreign claims,
Foreign investment in the United States, Foreign trade, Imports,
Information and informational materials, International organizations,
North Korea, Penalties, Reporting and recordkeeping requirements,
Securities, Services, Specially designated nationals, Terrorism, Travel
restrictions, Trusts and trustees, Vessels, Vietnam.
31 CFR Part 505
Administrative practice and procedure, Arms and munitions, Banks,
banking, Communist countries, Exports, Finance, Foreign trade, Nuclear
materials, Penalties, Reporting and recordkeeping requirements.
31 CFR Part 515
Administrative practice and procedure, Air carriers, Banks,
banking, Blocking of assets, Cuba, Currency, Estates, Exports, Finance,
Foreign investment in the United States, Foreign trade, Imports,
Information and informational materials, Penalties, Reporting and
recordkeeping requirements, Securities, Shipping, Specially designated
nationals, Terrorism, Travel restrictions, Trusts and trustees,
Vessels.
For the reasons set forth in the preamble, 31 CFR parts 500, 505
and 515 are amended as set forth below:
PART 500--FOREIGN ASSETS CONTROL REGULATIONS
1. The authority citation for part 500 is revised to read as
follows:
Authority: 18 U.S.C. 2332d; 31 U.S.C. 321(b); 50 U.S.C. App. 1-
44; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); E.O. 9193,
7 FR 5205, 3 CFR, 1938-1943 Comp., p. 1174; E.O. 9989, 13 FR 4891, 3
CFR, 1943-1948 Comp., p.748.
2. Subpart G is revised to read as follows:
Subpart G--Penalties
Secs.
500.701 Penalties.
500.702 Prepenalty notice; contents; respondent's rights; service.
500.703 Response to prepenalty notice; requests for hearing and
prehearing discovery; waiver; informal settlement.
[[Page 10324]]
500.704 Penalty imposition or withdrawal absent a hearing request.
500.705 Time and opportunity to request a hearing.
500.706 Hearing.
500.707 Interlocutory appeal.
500.708 Settlement during hearing proceedings.
500.709 Motions.
500.710 Discovery.
500.711 Summary disposition.
500.712 Prehearing conferences and submissions.
500.713 Public hearings.
500.714 Conduct of hearings.
500.715 Evidence.
500.716 Proposed decisions; recommended decision of Administrative
Law Judge; final decision.
500.717 Judicial review.
500.718 Referral to United States Department of Justice;
administrative collection measures.
Subpart G--Penalties
Sec. 500.701 Penalties.
(a) Attention is directed to section 16 of the Trading with the
Enemy Act (50 U.S.C. App. 16 -- ``TWEA''), as adjusted pursuant to the
Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-
410, as amended, 28 U.S.C. 2461 note), which provides that:
(1) Persons who willfully violate any provision of TWEA or any
license, rule, or regulation issued thereunder, and persons who
willfully violate, neglect, or refuse to comply with any order of the
President issued in compliance with the provisions of TWEA shall, upon
conviction, be fined not more than $1,000,000 or, if an individual, be
fined not more than $100,000 or imprisoned for not more than 10 years,
or both; and an officer, director, or agent of any corporation who
knowingly participates in such violation shall, upon conviction, be
fined not more than $100,000 or imprisoned for not more than 10 years,
or both.
(2) Any property, funds, securities, papers, or other articles or
documents, or any vessel, together with its tackle, apparel, furniture,
and equipment, concerned in a violation of TWEA may upon conviction be
forfeited to the United States.
(3) The Secretary of the Treasury may impose a civil penalty of not
more than $55,000 per violation on any person who violates any license,
order, or regulation issued under TWEA.
(4) Any property, funds, securities, papers, or other articles or
documents, or any vessel, together with its tackle, apparel, furniture,
and equipment, that is the subject of a violation subject to a civil
penalty issued pursuant to TWEA shall, at the discretion of the
Secretary of the Treasury, be forfeited to the United States
Government.
(b) The criminal penalties provided in TWEA are subject to increase
pursuant to 18 U.S.C. 3571 which, when read in conjunction with section
16 of TWEA, provides that persons convicted of violating TWEA may be
fined up to the greater of either $250,000 for individuals and
$1,000,000 for organizations or twice the pecuniary gain or loss from
the violation.
(c) Attention is directed to 18 U.S.C. 1001, which provides that
whoever, in any matter within the jurisdiction of any department or
agency of the United States, knowingly and willfully falsifies,
conceals or covers up by any trick, scheme, or device a material fact,
or makes any false, fictitious or fraudulent statements or
representations, or makes or uses any false writing or document knowing
the same to contain any false, fictitious or fraudulent statement or
entry, shall be fined under title 18, United States Code, or imprisoned
not more than 5 years, or both.
Sec. 500.702 Prepenalty notice; contents; respondent's rights;
service.
(a) When required. If the Director of the Office of Foreign Assets
Control has reasonable cause to believe that there has occurred a
violation of any provision of this part or a violation of the
provisions of any license, ruling, regulation, order, direction or
instruction issued by or pursuant to the direction or authorization of
the Secretary of the Treasury pursuant to this part or otherwise under
the Trading with the Enemy Act, and the Director determines that
further proceedings are warranted, he or she shall issue to the person
concerned a notice of his or her intent to impose a monetary penalty
and/or forfeiture. The prepenalty notice may be issued whether or not
another agency has taken any action with respect to this matter.
(b) Contents--(1) Facts of violation. The prepenalty notice shall
describe the violation, specify the laws and regulations allegedly
violated, and state the amount of the proposed monetary penalty and/or
forfeiture.
(2) Respondent's rights--(i) Right to respond. The prepenalty
notice shall also inform the respondent of respondent's right to
respond in writing to the notice within 30 calendar days of the mailing
or other service of the notice pursuant to paragraph (c) of this
section, as to why a monetary penalty and/or forfeiture should not be
imposed, or, if imposed, why it should be in a lesser amount than
proposed.
(ii) Right to request a hearing. The prepenalty notice shall also
inform the respondent that, in the response provided for in paragraph
(b)(2)(i) of this section, the respondent may also request a hearing
conducted pursuant to 5 U.S.C. 554-557 to present the respondent's
defenses to the imposition of a penalty and/or forfeiture and to offer
any other information that the respondent believes should be included
in the agency record prior to a final determination concerning the
imposition of a penalty and/or forfeiture. A failure to request a
hearing within 30 calendar days of service of the prepenalty notice
constitutes a waiver of a hearing.
(iii) Right to request discovery prior to hearing. The prepenalty
notice shall also inform the respondent of the right to discovery prior
to a requested hearing. Discovery must be requested in writing in the
response provided for in paragraph (b)(2)(i) of this section, jointly
with respondent's request for a hearing. A failure to file a request
for discovery within 30 calendar days of service of the prepenalty
notice constitutes a waiver of prehearing discovery.
(c) Service. The prepenalty notice, or any amendment or supplement
thereto, shall be served upon the respondent. Service shall be presumed
completed:
(1) Upon mailing a copy by registered or certified mail, return
receipt requested, addressed to the respondent at the respondent's last
known address; or
(2) Upon the mailing date stated in a date-stamped postal receipt
presented by the Office of Foreign Assets Control with respect to any
respondent who has refused, avoided, or in any way attempted to decline
delivery, tender, or acceptance of the registered or certified letter
or has refused to recover a registered or certified letter served; or
(3) Upon personal service by leaving a copy with the respondent or
an officer, a managing or general agent, or any other agent authorized
by appointment or by law to accept or receive service for the
respondent and evidenced by a certificate of service signed and dated
by the individual making such service, stating the method of service
and the identity of the individual with whom the prepenalty notice was
left; or
(4) Upon proof of service on a respondent who is not resident in
the United States by any method of service permitted by the law of the
jurisdiction in which the respondent resides or is located, provided
the requirements of such foreign law satisfy due process requirements
under United States law with respect to notice of administrative
proceedings, and where applicable laws or intergovernmental agreements
or understandings make the methods of service set forth in paragraphs
(c)(1) through (3) of this section inappropriate
[[Page 10325]]
or ineffective for service upon the nonresident respondent.
Sec. 500.703 Response to prepenalty notice; requests for hearing and
prehearing discovery; waiver; informal settlement.
(a) Deadline for response. The respondent shall have 30 calendar
days from the date of mailing or other service of the prepenalty notice
pursuant to Sec. 500.702(c) to respond thereto. The response, signed
and dated, may be sent by facsimile transmission to the Office of
Foreign Assets Control, at 202/622-1657, or by courier or other
expedited means at any time during the 30-day response period if an
original copy is sent concurrently via the U.S. Postal Service,
registered or certified mail, return receipt requested. The date shown
on the date-stamped registered or certified mail postal receipt will
constitute the filing date of the response.
(b) Form and contents of response--(1) In general. The written
response need not be in any particular form, but shall contain
information sufficient to indicate that it is in response to the
prepenalty notice. It should be responsive to the allegations contained
therein and set forth the nature of the respondent's defenses.
(i) The response must admit or deny specifically each separate
allegation of violation made in the prepenalty notice. If the
respondent is without knowledge as to an allegation, the response shall
so state, and such statement shall operate as a denial. Failure to
deny, controvert, or object to any allegation will be deemed an
admission of that allegation.
(ii) The response must also set forth any additional or new matter
or arguments the respondent seeks, or shall seek, to use in support of
all defenses or claims for mitigation. Any defense or partial defense
not specifically set forth in the response shall be deemed waived, and
evidence thereon may be refused, except for good cause shown.
(iii) The response must also accurately state, for each respondent,
the respondent's full name and address for future service, together
with current telephone and, if applicable, facsimile machine numbers
and area code. If respondent is represented by counsel, counsel's full
name and address, together with telephone and facsimile numbers and
area code, may be provided in lieu of service information for the
respondent. The respondent or respondent's counsel of record is
responsible for providing timely written notice to the parties of any
subsequent changes in the information provided.
(2) Request for hearing and prehearing discovery; waiver. Any
request for an administrative hearing and prehearing discovery must be
made, if at all, in the written response made pursuant to this section
and within the 30 calendar day period specified in Sec. 500.705(a). A
failure to request a hearing and prehearing discovery in writing within
30 calendar days of service of the prepenalty notice constitutes a
waiver of a hearing and prehearing discovery. A response asserting that
respondent reserves the right to request a hearing or prehearing
discovery beyond the 30 calendar day period is ineffectual.
(3) Informal settlement; response deadline. In addition or as an
alternative to a written response to a prepenalty notice pursuant to
this section, the respondent or respondent's representative may contact
the Office of Foreign Assets Control as advised in the prepenalty
notice to propose the settlement of allegations contained in the
prepenalty notice and related matters. In the event of settlement at
the prepenalty stage, the claim proposed in the prepenalty notice will
be withdrawn, the respondent is not required to take a written position
on allegations contained in the prepenalty notice, and the Office of
Foreign Assets Control will make no final determination as to whether a
violation occurred. The amount accepted in settlement of allegations in
a prepenalty notice may vary from the civil penalty that might finally
be imposed in the event of a formal determination of violation. In the
event no settlement is reached, the 30 calendar day period specified in
paragraph (a) of this section for written response to the prepenalty
notice remains in effect unless additional time is granted by the
Office of Foreign Assets Control. A failure to request a hearing and
prehearing discovery in writing within 30 calendar days of service of
the prepenalty notice constitutes a waiver of a hearing and prehearing
discovery.
Sec. 500.704 Penalty imposition or withdrawal absent a hearing
request.
(a) No violation. If, in the absence of a timely hearing request,
after considering any response to the prepenalty notice and any
relevant facts, the Director determines that there was no violation by
the respondent named in the prepenalty notice, the Director promptly
shall notify the respondent in writing of that determination and that
no civil monetary penalty or civil forfeiture pursuant to this subpart
will be imposed.
(b) Violation. If, in the absence of a timely hearing request,
after considering any response to the prepenalty notice and any
relevant facts, the Director determines that there was a violation by
the respondent named in the prepenalty notice, the Director promptly
shall issue a written notice of the imposition by the Office of Foreign
Assets Control of the civil monetary penalty and/or civil forfeiture
and/or other available disposition with respect to that respondent.
(1) The penalty/forfeiture notice shall inform the respondent that
payment of the assessed penalty must be made within 30 calendar days of
the mailing of the penalty notice.
(2) The penalty/forfeiture notice shall inform the respondent of
the requirement to furnish respondent's taxpayer identification number
pursuant to 31 U.S.C. 7701 and that the Department intends to use such
number for the purposes of collecting and reporting on any delinquent
penalty amount in the event of a failure to pay the penalty imposed.
Sec. 500.705 Time and opportunity to request a hearing.
(a) Deadline for hearing request. Within 30 calendar days of the
date of mailing or other service of the prepenalty notice pursuant to
Sec. 500.702(c), the respondent may file a written request for an
agency hearing conducted pursuant to this section, to present the
respondent's defenses to the imposition of a penalty and/or forfeiture
and to offer any other information for inclusion, if found admissible
pursuant to Sec. 500.715(a), into the agency record prior to a final
determination concerning the imposition of a penalty and/or forfeiture.
(b) Content of written response. If an agency hearing is requested
by the respondent or by the respondent's counsel, the written hearing
request must be accompanied by a written response to the prepenalty
notice containing the information required by Sec. 500.703(b)(1)(i)
through (iii). An untimely hearing request or written response to the
prepenalty notice constitutes a waiver of a hearing.
(c) Signature of filings. All hearing requests, motions, responses,
interrogatories, requests for deposition transcripts, requests for
protective orders, and all other filings relating to requests for and
responses to discovery or pertaining to the hearing process, must be
signed by each requesting party or, if represented, by each party's
counsel.
(d) Computation of time--(1) Final date on weekend or holiday.
Whenever the final date for any requirement of this part falls on a
Saturday, Sunday, Federal holiday, or other day on which
[[Page 10326]]
the Office of Foreign Assets Control is not open for the transaction of
business during normal working hours, the time for filing will be
extended to the close of business on the next working day.
(2) Closing time. The time for filing any document expires at 5:00
p.m. local Washington, DC time on the last day when such filing may be
made.
Sec. 500.706 Hearing.
(a) Notice of hearing. (1) Any respondent requesting a hearing
shall receive notice of the time and place of the hearing at the
service address provided pursuant to Sec. 500.703(b)(1)(iii). Requests
to change the time and place of a hearing may be submitted to the
Administrative Law Judge, who may modify the original notice or
subsequently set hearing dates. All requests for a change in the time
or place of a hearing must be received in the Administrative Law
Judge's chambers and served upon the parties no later than 15 working
days before the scheduled hearing date.
(2) The hearing shall be conducted in a manner consistent with 5
U.S.C. 554-557, pursuant to section 1710(c) of the Cuban Democracy Act
of 1992 (22 U.S.C. 6001-6010) and section 16 of the Trading with the
Enemy Act (50 U.S.C. App. 16).
(b) Powers. The Administrative Law Judge shall have all powers
necessary to conduct the hearing, consistent with 5 U.S.C. 554-557,
including the following powers:
(1) To administer oaths and affirmations;
(2) To require production of records or any information relative to
any act or transaction subject to this part, including the imposition
of sanctions available under Federal Rule of Civil Procedure 37(b)(2)
(Fed. R. Civ. P. 37(b)(2), 28 U.S.C.) for a party's failure to comply
with discovery requests;
(3) To receive relevant and material evidence and to rule upon the
admission of evidence and offers of proof;
(4) To take or cause depositions to be taken as authorized by this
part;
(5) To regulate the course of the hearing and the conduct of the
parties and their counsel;
(6) To hold scheduling or prehearing conferences as deemed
necessary;
(7) To consider and rule upon all procedural and other motions
appropriate in an adjudicatory proceeding, provided that only the
Secretary or the Secretary's designee shall have the power to grant any
motion to dismiss the proceeding or to decide any other motion that
results in a final determination of the merits of the proceeding;
(8) To prepare and present to the Secretary or to the Secretary's
designee a recommended decision as provided in Secs. 500.711(d) and
500.716(e);
(9) To recuse himself on motion made by a party or on the
Administrative Law Judge's own motion;
(10) To establish time, place, and manner limitations on the
attendance of the public and the media for any public hearing;
(11) To perform all necessary or appropriate measures to discharge
the duties of an Administrative Law Judge; and
(12) To set fees and expenses for witnesses, including expert
witnesses.
(c) Appearance and practice in a civil penalty hearing--(1)
Appearance before an Administrative Law Judge by counsel. Any member in
good standing of the bar of the highest court of any state,
commonwealth, possession, or territory of the United States, or the
District of Columbia may represent respondents upon written notice to
the Administrative Law Judge in a civil penalty hearing.
(2) Appearance before an Administrative Law Judge by a nonlawyer. A
respondent may appear on his own behalf; a duly authorized member of a
partnership may represent the partnership; a duly authorized officer,
director, or employee of any corporation may represent that corporation
upon written notice to the Administrative Law Judge in a civil penalty
hearing.
(3) Office of Foreign Assets Control representation. The Office of
Foreign Assets Control shall be represented by the Office of General
Counsel of the United States Department of the Treasury.
(d) Conflicts of interest.--(1) Conflict of interest in
representation. No individual shall appear as counsel for a party in a
proceeding conducted pursuant to this subpart if it reasonably appears
that such representation may be materially limited by that counsel's
responsibilities to a third person, or by counsel's own interests.
(2) Corrective Measures. The Administrative Law Judge may take
corrective measures at any stage of a proceeding to cure a conflict of
interest in representation, including the issuance of an order limiting
the scope of representation or disqualifying an individual from
appearing in a representative capacity for the duration of the
proceeding.
(e) Ex parte communications--(1) Definition. The term ex parte
communication means any material oral or written communication not on
the public record concerning the merits of an adjudicatory proceeding
with respect to which reasonable prior notice to all parties is not
given, on any material matter or proceeding covered by these
regulations that takes place between:
(i) A party to the proceeding, a party's counsel, or any other
individual; and
(ii) The Administrative Law Judge handling that proceeding, or the
Secretary, or the Secretary's designee.
(2) Exceptions. (i) A request to learn the status of the proceeding
does not constitute an ex parte communication; and
(ii) Settlement inquiries and discussions do not constitute ex
parte communications.
(3) Prohibition on ex parte communications. From the time a
respondent requests a hearing until the date that the Secretary or the
Secretary's designee issues a final decision, no party, interested
person, or counsel therefor shall knowingly make or cause to be made an
ex parte communication. The Administrative Law Judge, the Secretary,
and the Secretary's designee shall not knowingly make or cause to be
made to a party, or to any interested person or counsel therefor, any
ex parte communication.
(4) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by the Administrative Law Judge, the
Administrative Law Judge shall cause all such written communication
(or, if the communication is oral, a memorandum stating the substance
of the communication) to be placed on the record of the proceeding and
served on all parties. All parties to the proceeding shall have an
opportunity, within 10 calendar days of the receipt of service of the
notice or of receipt of a memorandum of the ex parte communication, to
file responses thereto and to recommend any sanctions, in accordance
with paragraph (e)(5) of this section, appropriate under the
circumstances, or may file an interlocutory appeal with the Secretary
or the Secretary's designee.
(5) Sanctions. Any party to the proceeding, a party's counsel, or
any other individual, who makes a prohibited ex parte communication, or
who encourages or solicits another to make any such communication, may
be subject to any appropriate sanction or sanctions imposed by the
Administrative Law Judge for good cause shown, or that may be imposed
upon interlocutory appeal taken to the Secretary or the Secretary's
designee, including, but not limited to, exclusion from the hearing and
an adverse ruling
[[Page 10327]]
on the issue which is the subject of the prohibited communication.
(f) Time limits. Except as provided elsewhere in this subpart, the
Administrative Law Judge shall establish all time limits for filings
with regard to hearings conducted pursuant to this subpart, except for
decisions on interlocutory appeals filed with the Secretary or the
Secretary's designee.
(g) Failure to appear. The unexcused failure of a respondent to
appear in person at a hearing or to have duly authorized counsel appear
in respondent's place constitutes a waiver of the respondent's right to
a hearing and is deemed an admission of the violation alleged. Without
further proceedings or notice to the respondent, the Administrative Law
Judge shall enter a finding that the right to a hearing was waived, and
the case shall be determined pursuant to Sec. 500.704.
Sec. 500.707 Interlocutory appeal.
(a) Interlocutory appeals. When exceptions, requests for
extensions, or motions, including motions for summary disposition, are
denied by the Administrative Law Judge, interlocutory appeals may be
taken to the Secretary or to the Secretary's designee for a decision.
(b) Filing deadline. Interlocutory appeals must be filed no later
than 15 calendar days after the matter being appealed has been decided
in writing by the Administrative Law Judge. Parties may request that
the Administrative Law Judge transmit the written decision to the
parties by facsimile transmission, courier, or other expedited means in
addition to service of the decision via the U.S. Postal Service by
registered or certified mail, return receipt requested. Such requests
must be supported by a written statement of need for expedited
delivery. Timely filing of the interlocutory appeal shall be determined
by the date stated on the date-stamped registered or certified mail
postal receipt.
(c) Manner of filing. Interlocutory appeals to the Secretary or the
Secretary's designee must be filed by facsimile transmission to 202/
622-1188, courier, or other expedited means, and sent concurrently by
registered or certified mail, return receipt requested, to the
Secretary's Office, U.S. Treasury Department, 1500 Pennsylvania Avenue,
NW, Washington, DC 20220, with the envelope prominently marked
``Attention: OFAC Interlocutory Appeal.'' Expedited service must also
be made upon the Administrative Law Judge and all parties or, if
represented, their counsel, with certified copies sent concurrently by
registered or certified mail, return receipt requested.
Sec. 500.708 Settlement during hearing proceedings.
Any party may, at any time during the hearing, unilaterally submit
written offers or proposals for settlement of a proceeding to the
Secretary or the Secretary's designee, at the address listed in
Sec. 500.707(c). Submission of a written settlement offer does not
provide a basis for adjourning or otherwise delaying all or any portion
of a hearing. No settlement offer or proposal, nor any subsequent
negotiation or resolution, is admissible as evidence in any hearing
before this tribunal.
Sec. 500.709 Motions.
(a) Written motions. Except as otherwise specifically provided
herein, an application or request for an order or ruling must be made
by written motion, in typed format.
(1) All written motions must state with particularity the relief
sought and must be accompanied by a proposed order.
(2) No oral argument may be held on written motions unless directed
by the Administrative Law Judge. Written memoranda, briefs, affidavits,
and other relevant material and documents may be filed in support of or
in opposition to a motion.
(b) Oral motions. A motion may be made orally on the record unless
the Administrative Law Judge directs that such motion be made in
writing.
(c) Filing of motions--(1) In general. Motions by respondents must
be filed with the Administrative Law Judge and served upon the Office
of the Chief Counsel, Foreign Assets Control, U.S. Treasury Department,
1500 Pennsylvania Avenue, NW, Washington, DC 20220, with the envelope
prominently marked ``Urgent: Annex--Room 3133,'' unless otherwise
directed by the Administrative Law Judge. Motions by the Office of
Foreign Assets Control must be filed with the Administrative Law Judge
and with each respondent or respondent's counsel. Motions may also be
concurrently sent by facsimile transmission, courier, or other
expedited means.
(2) Interlocutory appeals. Motions related to interlocutory appeals
to the Secretary or the Secretary's designee must be filed by facsimile
transmission to 202/622-1188, by courier, or by other expedited means,
and sent concurrently by registered or certified mail, return receipt
requested, to the Secretary's Office, U.S. Treasury Department, 1500
Pennsylvania Avenue, NW, Washington, DC 20220, with the envelope
prominently marked ``Attention: OFAC Interlocutory Appeal.'' Expedited
service must also be made upon the Administrative Law Judge and all
parties or, if represented, their counsel, with certified copies sent
concurrently by registered or certified mail, return receipt requested.
(d) Responses. (1) Any party may file a written response to a
motion within 20 calendar days of the date of its mailing, by
registered or certified mail pursuant to this subpart. If directed by
the Administrative Law Judge, the time period in which to respond may
be shortened or extended. The Administrative Law Judge may allow each
party to file a response before finally ruling upon any oral or written
motion. The Administrative Law Judge may allow a rejoinder to responses
for good cause shown. If a rejoinder is permitted, it must be filed
within 15 calendar days of the date the response was filed and served
upon all parties.
(2) The failure of a party to oppose a written motion or an oral
motion made on the record is deemed to be consent by that party to the
entry of an order substantially in the form of any proposed order
accompanying the motion.
(e) Dilatory motions. Frivolous, dilatory, or repetitive motions
are prohibited. The filing of such motions may form the basis for
sanctions.
Sec. 500.710 Discovery.
(a) In general. The availability of information and documents
through discovery is subject to the agency's assertion of privileges
available to OFAC and/or to the Treasury and to the application of all
exemptions afforded the agency pursuant to the Freedom of Information
Act (5 U.S.C. 552(b)(1) through (9)) and the Privacy Act (5 U.S.C.
552a) to all facets of discovery, including interrogatories,
depositions that seek the release of trade secrets, proprietary
materials, third-party confidential and/or commercially sensitive
materials, placement of information, documents and/or materials under
seal and/or protective order, and interlocutory appeals to the
Secretary or the Secretary's designee from any decision of the
Administrative Law Judge.
(b) Types of discovery. Parties may obtain discovery by one or more
of the following methods: depositions upon oral examination or written
questions; written interrogatories; production of documents or other
evidence for inspection; and requests for admission. All depositions of
Federal employees
[[Page 10328]]
must take place in Washington, DC, at the U.S. Treasury Department or
at the location where the Federal employee to be deposed performs his
duties, whichever the Federal employee's supervisor or the Office of
the Chief Counsel, Foreign Assets Control shall deem appropriate. All
depositions of Federal employees shall be held at a mutually agreed
upon date and time, and for a mutually agreed upon length of time.
(c) Interrogatories. Respondent's interrogatories must be served
upon the Office of the Chief Counsel, Foreign Assets Control within 20
calendar days of respondent's written request for a hearing. The Office
of Foreign Assets Control's interrogatories must be served within 30
calendar days of the receipt of service of respondent's interrogatories
or within 30 calendar days of the receipt of respondent's written
request for a hearing if no interrogatories are filed by respondent by
that time. Parties have 30 calendar days to respond to interrogatories
from the date interrogatories are received. Interrogatories shall be
limited to 20 questions only. Each subpart, section, or other
designation of a part of a question shall be counted as one complete
question in computing the permitted 20 question total. Where more than
20 questions are served upon a party, the receiving party may determine
which of the 20 questions the receiving party shall answer.
(d) Scope. Parties may obtain discovery regarding any matter not
privileged which has material relevance to the merits of the pending
action. It is not a ground for objection that the information sought
will be inadmissible at the hearing if the information sought appears
reasonably calculated to lead to discovery of admissible evidence. The
Administrative Law Judge may make any order which justice requires to
ensure that requests are not unreasonable, oppressive, excessive in
scope or unduly burdensome, including the issuance of an order to show
cause why a particular discovery request is justified upon the motion
of the objecting party.
(e) Privileged matter. Privileged documents are not discoverable.
Privileges include, inter alia, the attorney-client privilege, attorney
work-product privilege, any government's or government agency's
deliberative-process or classified information privilege, including
materials classified pursuant to Executive Order 12958 (3 CFR, 1995
Comp., p. 333) and any future Executive orders that may be issued
relating to the treatment of national security information, and all
materials and information exempted from release to the public pursuant
to the Privacy Act (5 U.S.C. 552a) and the Freedom of Information Act
(5 U.S.C. 552(b)(1) through (9)).
(f) Updating discovery. Whenever a party receives new or additional
information or documentation, all information produced, and all
information required to be provided pursuant to the discovery and
hearing process, must automatically be updated. The Administrative Law
Judge may impose sanctions for failure to update, including prohibiting
opposition to claims or defenses raised, striking pleadings or staying
proceedings, dismissing the action or any part thereof, rendering a
judgment by default, and holding a party in contempt.
(g) Time limits. All discovery, including all responses to
discovery requests, shall be completed no later than 20 calendar days
prior to the date scheduled for the commencement of the hearing. No
exceptions to this time limit shall be permitted, unless the
Administrative Law Judge finds on the record that good cause exists for
waiving the requirements of this paragraph (g).
Sec. 500.711 Summary disposition.
(a) In general. The Administrative Law Judge shall recommend that
the Secretary or the Secretary's designee issue a final order granting
a motion for summary disposition if the facts of the record show that:
(1) There is no genuine issue as to any material fact; and
(2) The moving party is entitled to a decision in its favor as a
matter of law.
(b) Filing of motions and responses. (1) Any party who believes
that there is no genuine issue of material fact to be determined and
that such party is entitled to a decision as a matter of law may move
at any time for summary disposition in its favor of all or any part of
the proceeding. Any party, within 20 calendar days after service of
such a motion, or within such time period as allowed by the
Administrative Law Judge, may file a response to such motion.
(2) A motion for summary disposition must be accompanied by a
statement of the material facts as to which the moving party contends
there is no genuine issue. Such motion must be supported by documentary
evidence, which may take the form of admissions in pleadings,
stipulations, depositions, transcripts, affidavits, and any other
evidentiary materials that the moving party contends support its
position. The motion must also be accompanied by a brief containing the
points and authorities in support of the moving party's arguments. Any
party opposing a motion for summary disposition must file a statement
setting forth those material facts as to which such party contends a
genuine dispute exists. The opposition must be supported by evidence of
the same type as that submitted with the motion for summary disposition
and a brief containing the points and authorities in support of the
contention that summary disposition would be inappropriate.
(c) Hearing on motion. At the request of any party or on his or her
own motion, the Administrative Law Judge may hear oral argument on the
motion for summary disposition.
(d) Decision on motion. Following receipt of a motion for summary
disposition and all responses thereto, the Administrative Law Judge
shall determine whether the moving party is entitled to summary
disposition. If the Administrative Law Judge determines that summary
disposition is warranted, he or she shall submit a recommended decision
to that effect to the Secretary. If the Administrative Law Judge finds
that no party is entitled to summary disposition, he or she shall make
a ruling denying the motion.
(e) Interlocutory appeal. Following receipt of the Administrative
Law Judge's recommended decision relating to summary disposition, each
party has the right to an interlocutory appeal to the Secretary or the
Secretary's designee. The interlocutory appeal must be filed within 20
calendar days immediately following the Administrative Law Judge's
recommended decision.
(f) Partial summary disposition. If the Administrative Law Judge
determines that a party is entitled to summary disposition as to
certain claims only, the Administrative Law Judge shall defer
submission of a recommended decision as to those claims. A hearing on
the remaining issues must be ordered and those claims for which the
Administrative Law Judge has determined that summary disposition is
warranted will be addressed in the recommended decision filed at the
conclusion of the hearing.
Sec. 500.712 Prehearing conferences and submissions.
(a) Prehearing conferences. The Administrative Law Judge may, on
his or her own motion, or at the request of any party for good cause
shown, direct counsel for the parties to meet with him or her (in
person, by telephone, or by teleconference) at a prehearing
[[Page 10329]]
conference to address any or all of the following:
(1) Simplification and clarification of the issues;
(2) Stipulations, admissions of fact, and the contents,
authenticity and admissibility into evidence of documents;
(3) Matters of which official notice may be taken;
(4) Limitation of the number of witnesses;
(5) Summary disposition of any or all issues;
(6) Resolution of discovery issues or disputes; and
(7) Such other matters as may aid in the orderly disposition of the
proceeding.
(b) Prehearing orders. At, or within a reasonable time following
the conclusion of, any prehearing conference, the Administrative Law
Judge shall serve on each party an order setting forth any agreements
reached and any procedural determinations made.
(c) Prehearing submissions. Within 40 calendar days of the receipt
of respondent's request for a hearing or at a time set by the
Administrative Law Judge, the Office of Foreign Assets Control shall
serve on the respondent and upon the Administrative Law Judge, the
following:
(1) Stipulations of fact, if any;
(2) A list of the exhibits to be introduced at the hearing along
with a copy of each exhibit; and
(3) A list of witnesses to be called to testify at the hearing,
including the name and address of each witness and a short summary of
the expected testimony of each witness.
(d) Deadline for respondent's and the other parties' submissions.
Unless for good cause shown the Administrative Law Judge permits an
extension of time to file, the respondent and the other parties shall
have 20 calendar days from the date of the submission by the Office of
Foreign Assets Control of the items set forth in paragraph (c) of this
section, and/or of any other party's service of items set forth in this
paragraph (d), to serve upon the Administrative Law Judge and all
parties, the following:
(1) Its response to stipulations of fact, if any;
(2) A list of the exhibits to be introduced at the hearing along
with a copy of each exhibit; and
(3) A list of witnesses to be called to testify at the hearing,
including the name and address of each witness and a short summary of
the expected testimony of each witness.
(e) Effect of failure to comply. No witness may testify and no
exhibits may be introduced at the hearing if such witness or exhibit is
not listed in the prehearing submissions pursuant to paragraphs (c) and
(d) of this section, except for good cause shown.
Sec. 500.713 Public hearings.
(a) In general. All hearings shall be open to the public, unless
the Administrative Law Judge, at his or her discretion, determines at
any time prior to or during the hearing, that holding an open hearing
would be contrary to the public interest. Within 20 calendar days of
service of the notice of hearing from the Administrative Law Judge, any
party may file with the Administrative Law Judge a request for a closed
hearing, and any party may file a pleading in reply to such a request.
Failure to file a request or a reply is deemed a waiver of any
objections regarding whether the hearing will be public or closed.
(b) Filing document under seal. (1) The Office of Foreign Assets
Control may file any document or any part of a document under seal if
disclosure of the document would be inconsistent with the protection of
the public interest or if justice requires protection of any person,
including a source or a party, from annoyance, threat, oppression, or
undue burden or expense, or the disclosure of the information would be,
or might reasonably lead to a disclosure, contrary to Executive Order
12958 or other Executive orders concerning disclosure of information,
U.S. Treasury Department regulations, the Privacy Act, or the Freedom
of Information Act.
(2) The Administrative Law Judge shall also safeguard the security
and integrity of any documents under seal and shall take all
appropriate steps to preserve the confidentiality of such documents or
any parts thereof, including closing portions of the hearing to the
public. Release of any information under seal, in any form or manner,
is subject to the same sanctions and the exercise of the same
authorities as are provided with respect to ex parte communications
under paragraph (e)(5) of this section.
(3) Should the Administrative Law Judge deny placement of any
documents under seal or under protective order, any party, and any
person whose documents or materials are at issue, may file an
interlocutory appeal to the Secretary or the Secretary's designee. In
such cases the Administrative Law Judge must not release or expose any
of the records or documents in question to the public or to any other
parties for a period of 20 calendar days from the date of the
Administrative Law Judge's ruling, in order to permit a petitioner the
opportunity either to withdraw the records and documents or to file an
interlocutory appeal with the Secretary or the Secretary's designee
requesting an order that the records be placed under seal.
(4) Upon settlement, final decision, or motion to the
Administrative Law Judge for good cause shown, all materials (including
all copies) under seal or protective order shall be returned to the
respective parties, except when it may be necessary to retain a record
until the judicial process is completed.
(5) Written notice of all requests for release of protected
documents or materials shall be given to the parties registered with
the Administrative Law Judge at least 20 calendar days prior to any
permitted release and prior to any access not specifically authorized
under the protective order. A copy of all requests for information,
including the name, address, and telephone number of the requester,
shall be provided to the petitioner. Each request for access to
protected material must also provide the names, addresses, and
telephone numbers of all persons represented by the requester,
including those on whose behalf the requester seeks access to protected
information. The Administrative Law Judge shall impose sanctions
provided under Sec. 500.706(e)(4) and (e)(5) for failure to provide
this information.
Sec. 500.714 Conduct of hearings.
(a) In general--(1) Overview. Hearings shall be conducted to
provide a fair and expeditious presentation of the relevant disputed
issues and facts. Each party has the right to present its case or
defense by oral and documentary evidence and to conduct such cross
examination as may be required for full disclosure of the relevant
facts.
(2) Order of hearing. The Office of Foreign Assets Control shall
present its case-in-chief first, unless otherwise ordered in advance by
the Administrative Law Judge or otherwise expressly specified by law or
regulation. The Office of Foreign Assets Control shall be the first
party to present an opening statement and a closing statement and may
make a rebuttal statement after the respondent's closing statement.
(3) Stipulations. Unless the Administrative Law Judge directs
otherwise, all stipulations of fact and law previously agreed upon by
the parties, and all documents, the admissibility of which has been
previously stipulated, will be admitted into evidence upon commencement
of the hearing.
(b) Transcript. A record of the hearing shall be made by manual or
electronic
[[Page 10330]]
means, including through the use of audio recorded diskettes or audio-
visual cassettes, and transcribed unless the Administrative Law Judge
rules otherwise. The transcript shall be made available to any party
upon payment of the cost thereof. The Administrative Law Judge shall
have authority to order the record corrected, either upon a motion to
correct, upon a motion to stipulate by the parties for good cause
shown, or following notice to the parties upon the Administrative Law
Judge's own motion. The Administrative Law Judge shall serve notice
upon all parties, at the addresses provided by the parties pursuant to
Sec. 500.703(b)(1)(iii), that the certified transcript, together with
all hearing exhibits and exhibits introduced but not admitted into
evidence at the hearing, has been filed with the Administrative Law
Judge.
Sec. 500.715 Evidence.
(a) Admissibility. (1) Except as is otherwise set forth in this
section, evidence that is relevant and material is admissible to the
fullest extent authorized by the Administrative Procedure Act and other
applicable law.
(2) Evidence may be excluded if it is misleading or its probative
value is substantially outweighed by the danger of unfair prejudice or
confusion of the issues, or considerations of undue delay, waste of
time, or needless presentation of cumulative evidence.
(3) Evidence that would be inadmissible under the Federal Rules of
Evidence need not be deemed or ruled to be inadmissible in a proceeding
conducted pursuant to this subpart if such evidence is relevant and
material, and not unduly repetitive.
(b) Official notice. (1) Official notice may be taken of any
material fact which may be judicially noticed by a United States
district court.
(2) All matters officially noticed by the Administrative Law Judge
shall appear on the record.
(3) If official notice is requested or taken of any material fact,
the parties, upon timely request, shall be afforded an opportunity to
object.
(c) Duplicate copies. A duplicate copy of a document is admissible
to the same extent as the original, unless a genuine issue is raised as
to whether the copy is in some material respect not a true and legible
copy of the original.
(d) Objections to admissibility of evidence. Objections to the
admissibility of evidence must be timely made and rulings on all
objections must appear on the record. Failure to object to admission of
evidence or to any ruling constitutes a waiver of the objection.
(e) Rejected exhibits. The Administrative Law Judge shall retain
rejected exhibits, adequately marked for identification, in the event
of an interlocutory appeal.
(f) Stipulations. The parties may stipulate as to any relevant
matters of fact or to the authenticity of any relevant documents. Such
stipulations may be received into evidence at a hearing and are binding
on the parties with respect to the matters therein stipulated.
(g) Depositions of unavailable witnesses. If a witness is
unavailable to testify at a hearing, and that witness has testified in
a deposition within the United States to which all parties to the
proceeding have received timely notice and an opportunity to
participate, a party may offer as evidence all or any part of the
transcript of the deposition, including deposition exhibits. All costs
of depositions shall be borne by the party requesting the deposition.
Sec. 500.716 Proposed decisions; recommended decision of
Administrative Law Judge; final decision.
(a) Proposed decisions. Any party may file with the Administrative
Law Judge a proposed decision within 30 calendar days after the parties
have received notice that the transcript has been filed with the
Administrative Law Judge, unless otherwise ordered by the
Administrative Law Judge.
(b) Reliance on relevant authorities. The proposed decision must be
supported by citation to relevant authorities and by transcript page
references to any relevant portions of the record. At the same time the
proposed decision is filed, a post-hearing brief may be filed in
support. The post-hearing brief shall be filed either as part of the
same document or in a separate document.
(c) Reply briefs. Reply briefs may be filed within 15 calendar days
after the date on which the parties' proposed decision is due. Reply
briefs must be strictly limited to responding to new matters, issues,
or arguments raised in another party's papers. A party who has not
filed a proposed decision or a post-hearing brief may not file a reply
brief.
(d) Simultaneous filing required. Absent a showing of good cause
for the use of another procedure, the Administrative Law Judge shall
not order the filing by any party of any brief or reply brief in
advance of the other party's filing of its brief.
(e) Recommended decision and filing of record. Within 45 calendar
days after expiration of the time allowed for filing reply briefs, the
Administrative Law Judge shall file with and certify to the Secretary
or the Secretary's designee the record of the proceeding and the
decision. The record must include the Administrative Law Judge's
recommended decision, including a determination either that there was
no violation by the person named in the prepenalty notice, or that
there was a violation by the person named in the prepenalty notice, and
the recommended monetary penalty and/or civil forfeiture and/or other
disposition available to the Office of Foreign Assets Control. In
addition to the proposed decision, the record must include all
prehearing and hearing transcripts, exhibits, and rulings, and the
motions, briefs, memoranda, and other supporting papers filed in
connection with the hearing. The Administrative Law Judge shall have
the recommended decision served upon each party.
(f) Exceptions to the recommended decision. When the Administrative
Law Judge has issued his recommended decision, the Administrative Law
Judge or his representative shall contact each party by telephone at
the telephone number provided by each party pursuant to
Sec. 500.703(b)(1)(iii). Within 3 calendar days of telephoning the
parties, the recommended decision shall be mailed by the Administrative
Law Judge to the parties. A party may file written exceptions to the
recommended decision with the Secretary or the Secretary's designee
within 30 calendar days of the date the telephone call is placed by the
Administrative Law Judge or his representative. A supporting brief may
be filed at the time the exceptions are filed.
(g) Final decision. The final decision of the Secretary or the
Secretary's designee shall be based on a review of the Administrative
Law Judge's recommended decision and the entire record of the
proceeding. The final written decision shall be provided to all
parties.
Sec. 500.717 Judicial review.
Any person may seek judicial review as provided under 5 U.S.C. 702
for a penalty and/or forfeiture imposed pursuant to this part.
Sec. 500.718 Referral to United States Department of Justice;
administrative collection measures.
In the event that the respondent does not pay the penalty imposed
pursuant to this part within 30 calendar days of the mailing of the
written notice of the imposition of the penalty, the matter may be
referred for administrative collection measures or to the United States
Department of Justice for appropriate action to recover the
[[Page 10331]]
penalty in a civil suit in a Federal district court.
PART 505--REGULATIONS PROHIBITING TRANSACTIONS INVOLVING THE
SHIPMENT OF CERTAIN MERCHANDISE BETWEEN FOREIGN COUNTRIES
1. The authority citation for part 505 is revised to read as
follows:
Authority: 31 U.S.C. 321(b); 50 U.S.C. App. 1-44; Pub. L. 101-
410, 104 Stat. 890 (28 U.S.C. 2461 note); E.O. 9193, 7 FR 5205, 3
CFR, 1938-1943 Comp., p. 1174; E.O. 9989, 13 FR 4891, 3 CFR, 1943-
1948 Comp., p. 748.
2. Section 505.50 is revised to read as follows:
Sec. 505.50 Penalties.
For provisions relating to penalties, see subpart G of part 500 of
this chapter.
PART 515--CUBAN ASSETS CONTROL REGULATIONS
1. The authority citation for part 515 is revised to read as
follows:
Authority: 31 U.S.C. 321(b); 22 U.S.C. 2370(a), 6001-6010, 6021-
6091; 50 U.S.C. App. 1-44; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C.
2461 note); Pub. L. 104-132, 110 Stat. 1214, 1254 (18 U.S.C. 2332d);
E.O. 9193, 7 FR 5205, 3 CFR, 1938-1943 Comp., p. 1174; E.O. 9989, 13
FR 4891, 3 CFR, 1943-1948 Comp., p. 748; Proc. 3447, 27 FR 1085, 3
CFR, 1959-1963 Comp., p. 157; E.O. 12854, 58 FR 36587, 3 CFR, 1993
Comp., p. 614.
2. Subpart G is revised to read as follows:
Subpart G--Penalties
Secs.
515.701 Penalties.
515.702 Prepenalty notice; contents; respondent's rights; service.
515.703 Response to prepenalty notice; requests for hearing and
prehearing discovery; waiver; informal settlement.
515.704 Penalty imposition or withdrawal absent a hearing request.
515.705 Time and opportunity to request a hearing.
515.706 Hearing.
515.707 Interlocutory appeal.
515.708 Settlement during hearing proceedings.
515.709 Motions.
515.710 Discovery.
515.711 Summary disposition.
515.712 Prehearing conferences and submissions.
515.713 Public hearings.
515.714 Conduct of hearings.
515.715 Evidence.
515.716 Proposed decisions; recommended decision of Administrative
Law Judge; final decision.
515.717 Judicial review.
515.718 Referral to United States Department of Justice;
administrative collection measures.
Subpart G--Penalties
Sec. 515.701 Penalties.
(a) Attention is directed to section 16 of the Trading with the
Enemy Act (50 U.S.C. App. 16 -- ``TWEA''), as adjusted pursuant to the
Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-
410, as amended, 28 U.S.C. 2461 note), which provides that:
(1) Persons who willfully violate any provision of TWEA or any
license, rule, or regulation issued thereunder, and persons who
willfully violate, neglect, or refuse to comply with any order of the
President issued in compliance with the provisions of TWEA shall, upon
conviction, be fined not more than $1,000,000 or, if an individual, be
fined not more than $100,000 or imprisoned for not more than 10 years,
or both; and an officer, director, or agent of any corporation who
knowingly participates in such violation shall, upon conviction, be
fined not more than $100,000 or imprisoned for not more than 10 years,
or both.
(2) Any property, funds, securities, papers, or other articles or
documents, or any vessel, together with its tackle, apparel, furniture,
and equipment, concerned in a violation of TWEA may upon conviction be
forfeited to the United States.
(3) The Secretary of the Treasury may impose a civil penalty of not
more than $55,000 per violation on any person who violates any license,
order, or regulation issued under TWEA.
(4) Any property, funds, securities, papers, or other articles or
documents, or any vessel, together with its tackle, apparel, furniture,
and equipment, that is the subject of a violation subject to a civil
penalty issued pursuant to TWEA shall, at the discretion of the
Secretary of the Treasury, be forfeited to the United States
Government.
(b) The criminal penalties provided in TWEA are subject to increase
pursuant to 18 U.S.C. 3571 which, when read in conjunction with section
16 of TWEA, provides that persons convicted of violating TWEA may be
fined up to the greater of either $250,000 for individuals and
$1,000,000 for organizations or twice the pecuniary gain or loss from
the violation.
(c) Attention is directed to 18 U.S.C. 1001, which provides that
whoever, in any matter within the jurisdiction of any department or
agency of the United States, knowingly and willfully falsifies,
conceals or covers up by any trick, scheme, or device a material fact,
or makes any false, fictitious or fraudulent statements or
representations, or makes or uses any false writing or document knowing
the same to contain any false, fictitious or fraudulent statement or
entry, shall be fined under title 18, United States Code, or imprisoned
not more than 5 years, or both.
Sec. 515.702 Prepenalty notice; contents; respondent's rights;
service.
(a) When required. If the Director of the Office of Foreign Assets
Control has reasonable cause to believe that there has occurred a
violation of any provision of this part or a violation of the
provisions of any license, ruling, regulation, order, direction or
instruction issued by or pursuant to the direction or authorization of
the Secretary of the Treasury pursuant to this part or otherwise under
the Trading with the Enemy Act, and the Director determines that
further proceedings are warranted, he or she shall issue to the person
concerned a notice of his or her intent to impose a monetary penalty
and/or forfeiture. The prepenalty notice may be issued whether or not
another agency has taken any action with respect to this matter.
(b) Contents--(1) Facts of violation. The prepenalty notice shall
describe the violation, specify the laws and regulations allegedly
violated, and state the amount of the proposed monetary penalty and/or
forfeiture.
(2) Respondent's rights--(i) Right to respond. The prepenalty
notice shall also inform the respondent of respondent's right to
respond in writing to the notice within 30 calendar days of the mailing
or other service of the notice pursuant to paragraph (c) of this
section, as to why a monetary penalty and/or forfeiture should not be
imposed, or, if imposed, why it should be in a lesser amount than
proposed.
(ii) Right to request a hearing. The prepenalty notice shall also
inform the respondent that, in the response provided for in paragraph
(b)(2)(i) of this section, the respondent may also request a hearing
conducted pursuant to 5 U.S.C. 554-557 to present the respondent's
defenses to the imposition of a penalty and/or forfeiture and to offer
any other information that the respondent believes should be included
in the agency record prior to a final determination concerning the
imposition of a penalty and/or forfeiture. A failure to request a
hearing within 30 calendar days of service of the prepenalty notice
constitutes a waiver of a hearing.
(iii) Right to request discovery prior to hearing. The prepenalty
notice shall also inform the respondent of the right to discovery prior
to a requested hearing. Discovery must be requested in writing in the
response provided for in paragraph (b)(2)(i) of this section, jointly
[[Page 10332]]
with respondent's request for a hearing. A failure to file a request
for discovery within 30 calendar days of service of the prepenalty
notice constitutes a waiver of prehearing discovery.
(c) Service. The prepenalty notice, or any amendment or supplement
thereto, shall be served upon the respondent. Service shall be presumed
completed:
(1) Upon mailing a copy by registered or certified mail, return
receipt requested, addressed to the respondent at the respondent's last
known address; or
(2) Upon the mailing date stated in a date-stamped postal receipt
presented by the Office of Foreign Assets Control with respect to any
respondent who has refused, avoided, or in any way attempted to decline
delivery, tender, or acceptance of the registered or certified letter
or has refused to recover a registered or certified letter served; or
(3) Upon personal service by leaving a copy with the respondent or
an officer, a managing or general agent, or any other agent authorized
by appointment or by law to accept or receive service for the
respondent and evidenced by a certificate of service signed and dated
by the individual making such service, stating the method of service
and the identity of the individual with whom the prepenalty notice was
left; or
(4) Upon proof of service on a respondent who is not resident in
the United States by any method of service permitted by the law of the
jurisdiction in which the respondent resides or is located, provided
the requirements of such foreign law satisfy due process requirements
under United States law with respect to notice of administrative
proceedings, and where applicable laws or intergovernmental agreements
or understandings make the methods of service set forth in paragraphs
(c)(1) through (3) of this section inappropriate or ineffective for
service upon the nonresident respondent.
Sec. 515.703 Response to prepenalty notice; requests for hearing and
prehearing discovery; waiver; informal settlement.
(a) Deadline for response. The respondent shall have 30 calendar
days from the date of mailing or other service of the prepenalty notice
pursuant to Sec. 515.702(c) to respond thereto. The response, signed
and dated, may be sent by facsimile transmission to the Office of
Foreign Assets Control, at 202/622-1657, or by courier or other
expedited means at any time during the 30-day response period if an
original copy is sent concurrently via the U.S. Postal Service,
registered or certified mail, return receipt requested. The date shown
on the date-stamped registered or certified mail postal receipt will
constitute the filing date of the response.
(b) Form and contents of response--(1) In general. The written
response need not be in any particular form, but shall contain
information sufficient to indicate that it is in response to the
prepenalty notice. It should be responsive to the allegations contained
therein and set forth the nature of the respondent's defenses.
(i) The response must admit or deny specifically each separate
allegation of violation made in the prepenalty notice. If the
respondent is without knowledge as to an allegation, the response shall
so state, and such statement shall operate as a denial. Failure to
deny, controvert, or object to any allegation will be deemed an
admission of that allegation.
(ii) The response must also set forth any additional or new matter
or arguments the respondent seeks, or shall seek, to use in support of
all defenses or claims for mitigation. Any defense or partial defense
not specifically set forth in the response shall be deemed waived, and
evidence thereon may be refused, except for good cause shown.
(iii) The response must also accurately state, for each respondent,
the respondent's full name and address for future service, together
with current telephone and, if applicable, facsimile machine numbers
and area code. If respondent is represented by counsel, counsel's full
name and address, together with telephone and facsimile numbers and
area code, may be provided in lieu of service information for the
respondent. The respondent or respondent's counsel of record is
responsible for providing timely written notice to the parties of any
subsequent changes in the information provided.
(2) Request for hearing and prehearing discovery; waiver. Any
request for an administrative hearing and prehearing discovery must be
made, if at all, in the written response made pursuant to this section
and within the 30 calendar day period specified in Sec. 515.705(a). A
failure to request a hearing and prehearing discovery in writing within
30 calendar days of service of the prepenalty notice constitutes a
waiver of a hearing and prehearing discovery. A response asserting that
respondent reserves the right to request a hearing or prehearing
discovery beyond the 30 calendar day period is ineffectual.
(3) Informal settlement; response deadline. In addition or as an
alternative to a written response to a prepenalty notice pursuant to
this section, the respondent or respondent's representative may contact
the Office of Foreign Assets Control as advised in the prepenalty
notice to propose the settlement of allegations contained in the
prepenalty notice and related matters. In the event of settlement at
the prepenalty stage, the claim proposed in the prepenalty notice will
be withdrawn, the respondent is not required to take a written position
on allegations contained in the prepenalty notice, and the Office of
Foreign Assets Control will make no final determination as to whether a
violation occurred. The amount accepted in settlement of allegations in
a prepenalty notice may vary from the civil penalty that might finally
be imposed in the event of a formal determination of violation. In the
event no settlement is reached, the 30 calendar day period specified in
paragraph (a) of this section for written response to the prepenalty
notice remains in effect unless additional time is granted by the
Office of Foreign Assets Control. A failure to request a hearing and
prehearing discovery in writing within 30 calendar days of service of
the prepenalty notice constitutes a waiver of a hearing and prehearing
discovery.
Sec. 515.704 Penalty imposition or withdrawal absent a hearing
request.
(a) No violation. If, in the absence of a timely hearing request,
after considering any response to the prepenalty notice and any
relevant facts, the Director determines that there was no violation by
the respondent named in the prepenalty notice, the Director promptly
shall notify the respondent in writing of that determination and that
no civil monetary penalty or civil forfeiture pursuant to this subpart
will be imposed.
(b) Violation. If, in the absence of a timely hearing request,
after considering any response to the prepenalty notice and any
relevant facts, the Director determines that there was a violation by
the respondent named in the prepenalty notice, the Director promptly
shall issue a written notice of the imposition by the Office of Foreign
Assets Control of the civil monetary penalty and/or civil forfeiture
and/or other available disposition with respect to that respondent.
(1) The penalty/forfeiture notice shall inform the respondent that
payment of the assessed penalty must be made within 30 calendar days of
the mailing of the penalty notice.
(2) The penalty/forfeiture notice shall inform the respondent of
the requirement to furnish respondent's taxpayer identification number
pursuant to 31 U.S.C. 7701 and that the Department intends to use such
number
[[Page 10333]]
for the purposes of collecting and reporting on any delinquent penalty
amount in the event of a failure to pay the penalty imposed.
Sec. 515.705 Time and opportunity to request a hearing.
(a) Deadline for hearing request. Within 30 calendar days of the
date of mailing or other service of the prepenalty notice pursuant to
Sec. 515.702(c), the respondent may file a written request for an
agency hearing conducted pursuant to this section, to present the
respondent's defenses to the imposition of a penalty and/or forfeiture
and to offer any other information for inclusion, if found admissible
pursuant to Sec. 515.715(a), into the agency record prior to a final
determination concerning the imposition of a penalty and/or forfeiture.
(b) Content of written response. If an agency hearing is requested
by the respondent or by the respondent's counsel, the written hearing
request must be accompanied by a written response to the prepenalty
notice containing the information required by Sec. 515.703(b)(1)(i)
through (iii). An untimely hearing request or written response to the
prepenalty notice constitutes a waiver of a hearing.
(c) Signature of filings. All hearing requests, motions, responses,
interrogatories, requests for deposition transcripts, requests for
protective orders, and all other filings relating to requests for and
responses to discovery or pertaining to the hearing process, must be
signed by each requesting party or, if represented, by each party's
counsel.
(d) Computation of time--(1) Final date on weekend or holiday.
Whenever the final date for any requirement of this part falls on a
Saturday, Sunday, Federal holiday, or other day on which the Office of
Foreign Assets Control is not open for the transaction of business
during normal working hours, the time for filing will be extended to
the close of business on the next working day.
(2) Closing time. The time for filing any document expires at 5:00
p.m. local Washington, DC time on the last day when such filing may be
made.
Sec. 515.706 Hearing.
(a) Notice of hearing. (1) Any respondent requesting a hearing
shall receive notice of the time and place of the hearing at the
service address provided pursuant to Sec. 515.703(b)(1)(iii). Requests
to change the time and place of a hearing may be submitted to the
Administrative Law Judge, who may modify the original notice or
subsequently set hearing dates. All requests for a change in the time
or place of a hearing must be received in the Administrative Law
Judge's chambers and served upon the parties no later than 15 working
days before the scheduled hearing date.
(2) The hearing shall be conducted in a manner consistent with 5
U.S.C. 554-557, pursuant to section 1710(c) of the Cuban Democracy Act
of 1992 (22 U.S.C. 6001-6010) and section 16 of the Trading with the
Enemy Act (50 U.S.C. App. 16).
(b) Powers. The Administrative Law Judge shall have all powers
necessary to conduct the hearing, consistent with 5 U.S.C. 554-557,
including the following powers:
(1) To administer oaths and affirmations;
(2) To require production of records or any information relative to
any act or transaction subject to this part, including the imposition
of sanctions available under Federal Rule of Civil Procedure 37(b)(2)
(Fed. R. Civ. P. 37(b)(2), 28 U.S.C.) for a party's failure to comply
with discovery requests;
(3) To receive relevant and material evidence and to rule upon the
admission of evidence and offers of proof;
(4) To take or cause depositions to be taken as authorized by this
part;
(5) To regulate the course of the hearing and the conduct of the
parties and their counsel;
(6) To hold scheduling or prehearing conferences as deemed
necessary;
(7) To consider and rule upon all procedural and other motions
appropriate in an adjudicatory proceeding, provided that only the
Secretary or the Secretary's designee shall have the power to grant any
motion to dismiss the proceeding or to decide any other motion that
results in a final determination of the merits of the proceeding;
(8) To prepare and present to the Secretary or to the Secretary's
designee a recommended decision as provided in Secs. 515.711(d) and
515.716(e);
(9) To recuse himself on motion made by a party or on the
Administrative Law Judge's own motion;
(10) To establish time, place, and manner limitations on the
attendance of the public and the media for any public hearing;
(11) To perform all necessary or appropriate measures to discharge
the duties of an Administrative Law Judge; and
(12) To set fees and expenses for witnesses, including expert
witnesses.
(c) Appearance and practice in a civil penalty hearing--(1)
Appearance before an Administrative Law Judge by counsel. Any member in
good standing of the bar of the highest court of any state,
commonwealth, possession, or territory of the United States, or the
District of Columbia may represent respondents upon written notice to
the Administrative Law Judge in a civil penalty hearing.
(2) Appearance before an Administrative Law Judge by a nonlawyer. A
respondent may appear on his own behalf; a duly authorized member of a
partnership may represent the partnership; a duly authorized officer,
director, or employee of any corporation may represent that corporation
upon written notice to the Administrative Law Judge in a civil penalty
hearing.
(3) Office of Foreign Assets Control representation. The Office of
Foreign Assets Control shall be represented by the Office of General
Counsel of the United States Department of the Treasury.
(d) Conflicts of interest.--(1) Conflict of interest in
representation. No individual shall appear as counsel for a party in a
proceeding conducted pursuant to this subpart if it reasonably appears
that such representation may be materially limited by that counsel's
responsibilities to a third person, or by counsel's own interests.
(2) Corrective Measures. The Administrative Law Judge may take
corrective measures at any stage of a proceeding to cure a conflict of
interest in representation, including the issuance of an order limiting
the scope of representation or disqualifying an individual from
appearing in a representative capacity for the duration of the
proceeding.
(e) Ex parte communications--(1) Definition. The term ex parte
communication means any material oral or written communication not on
the public record concerning the merits of an adjudicatory proceeding
with respect to which reasonable prior notice to all parties is not
given, on any material matter or proceeding covered by these
regulations that takes place between:
(i) A party to the proceeding, a party's counsel, or any other
individual; and
(ii) The Administrative Law Judge handling that proceeding, or the
Secretary, or the Secretary's designee.
(2) Exceptions. (i) A request to learn the status of the proceeding
does not constitute an ex parte communication; and
(ii) Settlement inquiries and discussions do not constitute ex
parte communications.
(3) Prohibition on ex parte communications. From the time a
respondent requests a hearing until the
[[Page 10334]]
date that the Secretary or the Secretary's designee issues a final
decision, no party, interested person, or counsel therefor shall
knowingly make or cause to be made an ex parte communication. The
Administrative Law Judge, the Secretary, and the Secretary's designee
shall not knowingly make or cause to be made to a party, or to any
interested person or counsel therefor, any ex parte communication.
(4) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by the Administrative Law Judge, the
Administrative Law Judge shall cause all such written communication
(or, if the communication is oral, a memorandum stating the substance
of the communication) to be placed on the record of the proceeding and
served on all parties. All parties to the proceeding shall have an
opportunity, within 10 calendar days of the receipt of service of the
notice or of receipt of a memorandum of the ex parte communication, to
file responses thereto and to recommend any sanctions, in accordance
with paragraph (e)(5) of this section, appropriate under the
circumstances, or may file an interlocutory appeal with the Secretary
or the Secretary's designee.
(5) Sanctions. Any party to the proceeding, a party's counsel, or
any other individual, who makes a prohibited ex parte communication, or
who encourages or solicits another to make any such communication, may
be subject to any appropriate sanction or sanctions imposed by the
Administrative Law Judge for good cause shown, or that may be imposed
upon interlocutory appeal taken to the Secretary or the Secretary's
designee, including, but not limited to, exclusion from the hearing and
an adverse ruling on the issue which is the subject of the prohibited
communication.
(f) Time limits. Except as provided elsewhere in this subpart, the
Administrative Law Judge shall establish all time limits for filings
with regard to hearings conducted pursuant to this subpart, except for
decisions on interlocutory appeals filed with the Secretary or the
Secretary's designee.
(g) Failure to appear. The unexcused failure of a respondent to
appear in person at a hearing or to have duly authorized counsel appear
in respondent's place constitutes a waiver of the respondent's right to
a hearing and is deemed an admission of the violation alleged. Without
further proceedings or notice to the respondent, the Administrative Law
Judge shall enter a finding that the right to a hearing was waived, and
the case shall be determined pursuant to Sec. 515.704.
Sec. 515.707 Interlocutory appeal.
(a) Interlocutory appeals. When exceptions, requests for
extensions, or motions, including motions for summary disposition, are
denied by the Administrative Law Judge, interlocutory appeals may be
taken to the Secretary or to the Secretary's designee for a decision.
(b) Filing deadline. Interlocutory appeals must be filed no later
than 15 calendar days after the matter being appealed has been decided
in writing by the Administrative Law Judge. Parties may request that
the Administrative Law Judge transmit the written decision to the
parties by facsimile transmission, courier, or other expedited means in
addition to service of the decision via the U.S. Postal Service by
registered or certified mail, return receipt requested. Such requests
must be supported by a written statement of need for expedited
delivery. Timely filing of the interlocutory appeal shall be determined
by the date stated on the date-stamped registered or certified mail
postal receipt.
(c) Manner of filing. Interlocutory appeals to the Secretary or the
Secretary's designee must be filed by facsimile transmission to 202/
622-1188, courier, or other expedited means, and sent concurrently by
registered or certified mail, return receipt requested, to the
Secretary's Office, U.S. Treasury Department, 1500 Pennsylvania Avenue,
NW, Washington, DC 20220, with the envelope prominently marked
``Attention: OFAC Interlocutory Appeal.'' Expedited service must also
be made upon the Administrative Law Judge and all parties or, if
represented, their counsel, with certified copies sent concurrently by
registered or certified mail, return receipt requested.
Sec. 515.708 Settlement during hearing proceedings.
Any party may, at any time during the hearing, unilaterally submit
written offers or proposals for settlement of a proceeding to the
Secretary or the Secretary's designee, at the address listed in
Sec. 515.707(c). Submission of a written settlement offer does not
provide a basis for adjourning or otherwise delaying all or any portion
of a hearing. No settlement offer or proposal, nor any subsequent
negotiation or resolution, is admissible as evidence in any hearing
before this tribunal.
Sec. 515.709 Motions.
(a) Written motions. Except as otherwise specifically provided
herein, an application or request for an order or ruling must be made
by written motion, in typed format.
(1) All written motions must state with particularity the relief
sought and must be accompanied by a proposed order.
(2) No oral argument may be held on written motions unless directed
by the Administrative Law Judge. Written memoranda, briefs, affidavits,
and other relevant material and documents may be filed in support of or
in opposition to a motion.
(b) Oral motions. A motion may be made orally on the record unless
the Administrative Law Judge directs that such motion be made in
writing.
(c) Filing of motions--(1) In general. Motions by respondents must
be filed with the Administrative Law Judge and served upon the Office
of the Chief Counsel, Foreign Assets Control, U.S. Treasury Department,
1500 Pennsylvania Avenue, NW, Washington, DC 20220, with the envelope
prominently marked ``Urgent: Annex--Room 3133,'' unless otherwise
directed by the Administrative Law Judge. Motions by the Office of
Foreign Assets Control must be filed with the Administrative Law Judge
and with each respondent or respondent's counsel. Motions may also be
concurrently sent by facsimile transmission, courier, or other
expedited means.
(2) Interlocutory appeals. Motions related to interlocutory appeals
to the Secretary or the Secretary's designee must be filed by facsimile
transmission to 202/622-1188, by courier, or by other expedited means,
and sent concurrently by registered or certified mail, return receipt
requested, to the Secretary's Office, U.S. Treasury Department, 1500
Pennsylvania Avenue, NW, Washington, DC 20220, with the envelope
prominently marked ``Attention: OFAC Interlocutory Appeal.'' Expedited
service must also be made upon the Administrative Law Judge and all
parties or, if represented, their counsel, with certified copies sent
concurrently by registered or certified mail, return receipt requested.
(d) Responses. (1) Any party may file a written response to a
motion within 20 calendar days of the date of its mailing, by
registered or certified mail pursuant to this subpart. If directed by
the Administrative Law Judge, the time period in which to respond may
be shortened or extended. The Administrative Law Judge may allow each
party to file a response before
[[Page 10335]]
finally ruling upon any oral or written motion. The Administrative Law
Judge may allow a rejoinder to responses for good cause shown. If a
rejoinder is permitted, it must be filed within 15 calendar days of the
date the response was filed and served upon all parties.
(2) The failure of a party to oppose a written motion or an oral
motion made on the record is deemed to be consent by that party to the
entry of an order substantially in the form of any proposed order
accompanying the motion.
(e) Dilatory motions. Frivolous, dilatory, or repetitive motions
are prohibited. The filing of such motions may form the basis for
sanctions.
Sec. 515.710 Discovery.
(a) In general. The availability of information and documents
through discovery is subject to the agency's assertion of privileges
available to OFAC and/or to the Treasury and to the application of all
exemptions afforded the agency pursuant to the Freedom of Information
Act (5 U.S.C. 552(b)(1) through (9)) and the Privacy Act (5 U.S.C.
552a) to all facets of discovery, including interrogatories,
depositions that seek the release of trade secrets, proprietary
materials, third-party confidential and/or commercially sensitive
materials, placement of information, documents and/or materials under
seal and/or protective order, and interlocutory appeals to the
Secretary or the Secretary's designee from any decision of the
Administrative Law Judge.
(b) Types of discovery. Parties may obtain discovery by one or more
of the following methods: depositions upon oral examination or written
questions; written interrogatories; production of documents or other
evidence for inspection; and requests for admission. All depositions of
Federal employees must take place in Washington, DC, at the U.S.
Treasury Department or at the location where the Federal employee to be
deposed performs his duties, whichever the Federal employee's
supervisor or the Office of the Chief Counsel, Foreign Assets Control
shall deem appropriate. All depositions of Federal employees shall be
held at a mutually agreed upon date and time, and for a mutually agreed
upon length of time.
(c) Interrogatories. Respondent's interrogatories must be served
upon the Office of the Chief Counsel, Foreign Assets Control within 20
calendar days of respondent's written request for a hearing. The Office
of Foreign Assets Control's interrogatories must be served within 30
calendar days of the receipt of service of respondent's interrogatories
or within 30 calendar days of the receipt of respondent's written
request for a hearing if no interrogatories are filed by respondent by
that time. Parties have 30 calendar days to respond to interrogatories
from the date interrogatories are received. Interrogatories shall be
limited to 20 questions only. Each subpart, section, or other
designation of a part of a question shall be counted as one complete
question in computing the permitted 20 question total. Where more than
20 questions are served upon a party, the receiving party may determine
which of the 20 questions the receiving party shall answer.
(d) Scope. Parties may obtain discovery regarding any matter not
privileged which has material relevance to the merits of the pending
action. It is not a ground for objection that the information sought
will be inadmissible at the hearing if the information sought appears
reasonably calculated to lead to discovery of admissible evidence. The
Administrative Law Judge may make any order which justice requires to
ensure that requests are not unreasonable, oppressive, excessive in
scope or unduly burdensome, including the issuance of an order to show
cause why a particular discovery request is justified upon the motion
of the objecting party.
(e) Privileged matter. Privileged documents are not discoverable.
Privileges include, inter alia, the attorney-client privilege, attorney
work-product privilege, any government's or government agency's
deliberative-process or classified information privilege, including
materials classified pursuant to Executive Order 12958 (3 CFR, 1995
Comp., p. 333) and any future Executive orders that may be issued
relating to the treatment of national security information, and all
materials and information exempted from release to the public pursuant
to the Privacy Act (5 U.S.C. 552a) and the Freedom of Information Act
(5 U.S.C. 552(b)(1) through (9)).
(f) Updating discovery. Whenever a party receives new or additional
information or documentation, all information produced, and all
information required to be provided pursuant to the discovery and
hearing process, must automatically be updated. The Administrative Law
Judge may impose sanctions for failure to update, including prohibiting
opposition to claims or defenses raised, striking pleadings or staying
proceedings, dismissing the action or any part thereof, rendering a
judgment by default, and holding a party in contempt.
(g) Time limits. All discovery, including all responses to
discovery requests, shall be completed no later than 20 calendar days
prior to the date scheduled for the commencement of the hearing. No
exceptions to this time limit shall be permitted, unless the
Administrative Law Judge finds on the record that good cause exists for
waiving the requirements of this paragraph (g).
Sec. 515.711 Summary disposition.
(a) In general. The Administrative Law Judge shall recommend that
the Secretary or the Secretary's designee issue a final order granting
a motion for summary disposition if the facts of the record show that:
(1) There is no genuine issue as to any material fact; and
(2) The moving party is entitled to a decision in its favor as a
matter of law.
(b) Filing of motions and responses. (1) Any party who believes
that there is no genuine issue of material fact to be determined and
that such party is entitled to a decision as a matter of law may move
at any time for summary disposition in its favor of all or any part of
the proceeding. Any party, within 20 calendar days after service of
such a motion, or within such time period as allowed by the
Administrative Law Judge, may file a response to such motion.
(2) A motion for summary disposition must be accompanied by a
statement of the material facts as to which the moving party contends
there is no genuine issue. Such motion must be supported by documentary
evidence, which may take the form of admissions in pleadings,
stipulations, depositions, transcripts, affidavits, and any other
evidentiary materials that the moving party contends support its
position. The motion must also be accompanied by a brief containing the
points and authorities in support of the moving party's arguments. Any
party opposing a motion for summary disposition must file a statement
setting forth those material facts as to which such party contends a
genuine dispute exists. The opposition must be supported by evidence of
the same type as that submitted with the motion for summary disposition
and a brief containing the points and authorities in support of the
contention that summary disposition would be inappropriate.
(c) Hearing on motion. At the request of any party or on his or her
own motion, the Administrative Law Judge may hear oral argument on the
motion for summary disposition.
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(d) Decision on motion. Following receipt of a motion for summary
disposition and all responses thereto, the Administrative Law Judge
shall determine whether the moving party is entitled to summary
disposition. If the Administrative Law Judge determines that summary
disposition is warranted, he or she shall submit a recommended decision
to that effect to the Secretary. If the Administrative Law Judge finds
that no party is entitled to summary disposition, he or she shall make
a ruling denying the motion.
(e) Interlocutory appeal. Following receipt of the Administrative
Law Judge's recommended decision relating to summary disposition, each
party has the right to an interlocutory appeal to the Secretary or the
Secretary's designee. The interlocutory appeal must be filed within 20
calendar days immediately following the Administrative Law Judge's
recommended decision.
(f) Partial summary disposition. If the Administrative Law Judge
determines that a party is entitled to summary disposition as to
certain claims only, the Administrative Law Judge shall defer
submission of a recommended decision as to those claims. A hearing on
the remaining issues must be ordered and those claims for which the
Administrative Law Judge has determined that summary disposition is
warranted will be addressed in the recommended decision filed at the
conclusion of the hearing.
Sec. 515.712 Prehearing conferences and submissions.
(a) Prehearing conferences. The Administrative Law Judge may, on
his or her own motion, or at the request of any party for good cause
shown, direct counsel for the parties to meet with him or her (in
person, by telephone, or by teleconference) at a prehearing conference
to address any or all of the following:
(1) Simplification and clarification of the issues;
(2) Stipulations, admissions of fact, and the contents,
authenticity and admissibility into evidence of documents;
(3) Matters of which official notice may be taken;
(4) Limitation of the number of witnesses;
(5) Summary disposition of any or all issues;
(6) Resolution of discovery issues or disputes; and
(7) Such other matters as may aid in the orderly disposition of the
proceeding.
(b) Prehearing orders. At, or within a reasonable time following
the conclusion of, any prehearing conference, the Administrative Law
Judge shall serve on each party an order setting forth any agreements
reached and any procedural determinations made.
(c) Prehearing submissions. Within 40 calendar days of the receipt
of respondent's request for a hearing or at a time set by the
Administrative Law Judge, the Office of Foreign Assets Control shall
serve on the respondent and upon the Administrative Law Judge, the
following:
(1) Stipulations of fact, if any;
(2) A list of the exhibits to be introduced at the hearing along
with a copy of each exhibit; and
(3) A list of witnesses to be called to testify at the hearing,
including the name and address of each witness and a short summary of
the expected testimony of each witness.
(d) Deadline for respondent's and the other parties' submissions.
Unless for good cause shown the Administrative Law Judge permits an
extension of time to file, the respondent and the other parties shall
have 20 calendar days from the date of the submission by the Office of
Foreign Assets Control of the items set forth in paragraph (c) of this
section, and/or of any other party's service of items set forth in this
paragraph (d), to serve upon the Administrative Law Judge and all
parties, the following:
(1) Its response to stipulations of fact, if any;
(2) A list of the exhibits to be introduced at the hearing along
with a copy of each exhibit; and
(3) A list of witnesses to be called to testify at the hearing,
including the name and address of each witness and a short summary of
the expected testimony of each witness.
(e) Effect of failure to comply. No witness may testify and no
exhibits may be introduced at the hearing if such witness or exhibit is
not listed in the prehearing submissions pursuant to paragraphs (c) and
(d) of this section, except for good cause shown.
Sec. 515.713 Public hearings.
(a) In general. All hearings shall be open to the public, unless
the Administrative Law Judge, at his or her discretion, determines at
any time prior to or during the hearing, that holding an open hearing
would be contrary to the public interest. Within 20 calendar days of
service of the notice of hearing from the Administrative Law Judge, any
party may file with the Administrative Law Judge a request for a closed
hearing, and any party may file a pleading in reply to such a request.
Failure to file a request or a reply is deemed a waiver of any
objections regarding whether the hearing will be public or closed.
(b) Filing document under seal. (1) The Office of Foreign Assets
Control may file any document or any part of a document under seal if
disclosure of the document would be inconsistent with the protection of
the public interest or if justice requires protection of any person,
including a source or a party, from annoyance, threat, oppression, or
undue burden or expense, or the disclosure of the information would be,
or might reasonably lead to a disclosure, contrary to Executive Order
12958 or other Executive orders concerning disclosure of information,
U.S. Treasury Department regulations, the Privacy Act, or the Freedom
of Information Act.
(2) The Administrative Law Judge shall also safeguard the security
and integrity of any documents under seal and shall take all
appropriate steps to preserve the confidentiality of such documents or
any parts thereof, including closing portions of the hearing to the
public. Release of any information under seal, in any form or manner,
is subject to the same sanctions and the exercise of the same
authorities as are provided with respect to ex parte communications
under paragraph (e)(5) of this section.
(3) Should the Administrative Law Judge deny placement of any
documents under seal or under protective order, any party, and any
person whose documents or materials are at issue, may file an
interlocutory appeal to the Secretary or the Secretary's designee. In
such cases the Administrative Law Judge must not release or expose any
of the records or documents in question to the public or to any other
parties for a period of 20 calendar days from the date of the
Administrative Law Judge's ruling, in order to permit a petitioner the
opportunity either to withdraw the records and documents or to file an
interlocutory appeal with the Secretary or the Secretary's designee
requesting an order that the records be placed under seal.
(4) Upon settlement, final decision, or motion to the
Administrative Law Judge for good cause shown, all materials (including
all copies) under seal or protective order shall be returned to the
respective parties, except when it may be necessary to retain a record
until the judicial process is completed.
(5) Written notice of all requests for release of protected
documents or materials shall be given to the parties registered with
the Administrative Law Judge at least 20 calendar days prior to any
permitted release and prior to any
[[Page 10337]]
access not specifically authorized under the protective order. A copy
of all requests for information, including the name, address, and
telephone number of the requester, shall be provided to the petitioner.
Each request for access to protected material must also provide the
names, addresses, and telephone numbers of all persons represented by
the requester, including those on whose behalf the requester seeks
access to protected information. The Administrative Law Judge shall
impose sanctions provided under Sec. 515.706(e)(4) and (e)(5) for
failure to provide this information.
Sec. 515.714 Conduct of hearings.
(a) In general--(1) Overview. Hearings shall be conducted to
provide a fair and expeditious presentation of the relevant disputed
issues and facts. Each party has the right to present its case or
defense by oral and documentary evidence and to conduct such cross
examination as may be required for full disclosure of the relevant
facts.
(2) Order of hearing. The Office of Foreign Assets Control shall
present its case-in-chief first, unless otherwise ordered in advance by
the Administrative Law Judge or otherwise expressly specified by law or
regulation. The Office of Foreign Assets Control shall be the first
party to present an opening statement and a closing statement and may
make a rebuttal statement after the respondent's closing statement.
(3) Stipulations. Unless the Administrative Law Judge directs
otherwise, all stipulations of fact and law previously agreed upon by
the parties, and all documents, the admissibility of which has been
previously stipulated, will be admitted into evidence upon commencement
of the hearing.
(b) Transcript. A record of the hearing shall be made by manual or
electronic means, including through the use of audio recorded diskettes
or audio-visual cassettes, and transcribed unless the Administrative
Law Judge rules otherwise. The transcript shall be made available to
any party upon payment of the cost thereof. The Administrative Law
Judge shall have authority to order the record corrected, either upon a
motion to correct, upon a motion to stipulate by the parties for good
cause shown, or following notice to the parties upon the Administrative
Law Judge's own motion. The Administrative Law Judge shall serve notice
upon all parties, at the addresses provided by the parties pursuant to
Sec. 515.703(b)(1)(iii), that the certified transcript, together with
all hearing exhibits and exhibits introduced but not admitted into
evidence at the hearing, has been filed with the Administrative Law
Judge.
Sec. 515.715 Evidence.
(a) Admissibility. (1) Except as is otherwise set forth in this
section, evidence that is relevant and material is admissible to the
fullest extent authorized by the Administrative Procedure Act and other
applicable law.
(2) Evidence may be excluded if it is misleading or its probative
value is substantially outweighed by the danger of unfair prejudice or
confusion of the issues, or considerations of undue delay, waste of
time, or needless presentation of cumulative evidence.
(3) Evidence that would be inadmissible under the Federal Rules of
Evidence need not be deemed or ruled to be inadmissible in a proceeding
conducted pursuant to this subpart if such evidence is relevant and
material, and not unduly repetitive.
(b) Official notice. (1) Official notice may be taken of any
material fact which may be judicially noticed by a United States
district court.
(2) All matters officially noticed by the Administrative Law Judge
shall appear on the record.
(3) If official notice is requested or taken of any material fact,
the parties, upon timely request, shall be afforded an opportunity to
object.
(c) Duplicate copies. A duplicate copy of a document is admissible
to the same extent as the original, unless a genuine issue is raised as
to whether the copy is in some material respect not a true and legible
copy of the original.
(d) Objections to admissibility of evidence. Objections to the
admissibility of evidence must be timely made and rulings on all
objections must appear on the record. Failure to object to admission of
evidence or to any ruling constitutes a waiver of the objection.
(e) Rejected exhibits. The Administrative Law Judge shall retain
rejected exhibits, adequately marked for identification, in the event
of an interlocutory appeal.
(f) Stipulations. The parties may stipulate as to any relevant
matters of fact or to the authenticity of any relevant documents. Such
stipulations may be received into evidence at a hearing and are binding
on the parties with respect to the matters therein stipulated.
(g) Depositions of unavailable witnesses. If a witness is
unavailable to testify at a hearing, and that witness has testified in
a deposition within the United States to which all parties to the
proceeding have received timely notice and an opportunity to
participate, a party may offer as evidence all or any part of the
transcript of the deposition, including deposition exhibits. All costs
of depositions shall be borne by the party requesting the deposition.
Sec. 515.716 Proposed decisions; recommended decision of
Administrative Law Judge; final decision.
(a) Proposed decisions. Any party may file with the Administrative
Law Judge a proposed decision within 30 calendar days after the parties
have received notice that the transcript has been filed with the
Administrative Law Judge, unless otherwise ordered by the
Administrative Law Judge.
(b) Reliance on relevant authorities. The proposed decision must be
supported by citation to relevant authorities and by transcript page
references to any relevant portions of the record. At the same time the
proposed decision is filed, a post-hearing brief may be filed in
support. The post-hearing brief shall be filed either as part of the
same document or in a separate document.
(c) Reply briefs. Reply briefs may be filed within 15 calendar days
after the date on which the parties' proposed decision is due. Reply
briefs must be strictly limited to responding to new matters, issues,
or arguments raised in another party's papers. A party who has not
filed a proposed decision or a post-hearing brief may not file a reply
brief.
(d) Simultaneous filing required. Absent a showing of good cause
for the use of another procedure, the Administrative Law Judge shall
not order the filing by any party of any brief or reply brief in
advance of the other party's filing of its brief.
(e) Recommended decision and filing of record. Within 45 calendar
days after expiration of the time allowed for filing reply briefs, the
Administrative Law Judge shall file with and certify to the Secretary
or the Secretary's designee the record of the proceeding and the
decision. The record must include the Administrative Law Judge's
recommended decision, including a determination either that there was
no violation by the person named in the prepenalty notice, or that
there was a violation by the person named in the prepenalty notice, and
the recommended monetary penalty and/or civil forfeiture and/or other
disposition available to the Office of Foreign Assets Control. In
addition to the proposed decision, the record must include all
prehearing and hearing transcripts, exhibits, and rulings, and the
motions, briefs, memoranda, and other supporting papers filed in
connection with the hearing. The Administrative
[[Page 10338]]
Law Judge shall have the recommended decision served upon each party.
(f) Exceptions to the recommended decision. When the Administrative
Law Judge has issued his recommended decision, the Administrative Law
Judge or his representative shall contact each party by telephone at
the telephone number provided by each party pursuant to
Sec. 515.703(b)(1)(iii). Within 3 calendar days of telephoning the
parties, the recommended decision shall be mailed by the Administrative
Law Judge to the parties. A party may file written exceptions to the
recommended decision with the Secretary or the Secretary's designee
within 30 calendar days of the date the telephone call is placed by the
Administrative Law Judge or his representative. A supporting brief may
be filed at the time the exceptions are filed.
(g) Final decision. The final decision of the Secretary or the
Secretary's designee shall be based on a review of the Administrative
Law Judge's recommended decision and the entire record of the
proceeding. The final written decision shall be provided to all
parties.
Sec. 515.717 Judicial review.
Any person may seek judicial review as provided under 5 U.S.C. 702
for a penalty and/or forfeiture imposed pursuant to this part.
Sec. 515.718 Referral to United States Department of Justice;
administrative collection measures.
In the event that the respondent does not pay the penalty imposed
pursuant to this part within 30 calendar days of the mailing of the
written notice of the imposition of the penalty, the matter may be
referred for administrative collection measures or to the United States
Department of Justice for appropriate action to recover the penalty in
a civil suit in a Federal district court.
Dated: January 7, 1998.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
Approved: February 2, 1998.
James E. Johnson,
Assistant Secretary (Enforcement), Department of the Treasury.
[FR Doc. 98-5358 Filed 2-26-98; 9:05 am]
BILLING CODE 4810-25-F