11 September 2003
Source: http://www.access.gpo.gov/su_docs/aces/fr-cont.html
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[Federal Register: September 11, 2003 (Volume 68, Number 176)]
[Proposed Rules]
[Page 53662-53663]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11se03-25]

[[Page 53662]]

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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 500, 501, 505, 515, 535, 536, 537, 538, 539, 540, 545,
550, 560, 575, 585, 586, 587, 588, 590, 591, 594, 595, 596, 597,
and 598

Foreign Assets Control Regulations; Reporting and Procedures
Regulations; Cuban Assets Control Regulations: Publication of Revised
Civil Penalties Hearing Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to interim
final rule.

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SUMMARY: The Office of Foreign Assets Control (``OFAC'') of the U.S.
Department of the Treasury (``Treasury'') is proposing to adopt as a
final rule the interim final rule published elsewhere in this issue of
the Federal Register that revises its civil penalties regulations
promulgated pursuant to the Trading with the Enemy Act. These revisions
consolidate substantive changes to the Foreign Assets Control
Regulations, and the Cuban Assets Control Regulations, in a new subpart
of the Reporting and Procedures Regulations, renamed Reporting,
Procedures, and Penalties Regulations. Conforming changes are made to
the other parts of the regulations.

DATES: Written comments may be submitted on or before October 14, 2003.

ADDRESSES: Comments may be submitted by mail, by facsimile, or through
OFAC's Web site. Because paper mail in the Washington, DC area may be
subject to delay, electronic mail submission is recommended.
    Mailing address: Chief of Records, ATTN Request for Comments,
Office of Foreign Assets Control, Department of the Treasury, 1500
Pennsylvania Avenue, NW., Washington, DC 20220.
    Facsimile number: (202) 622-1657.
    OFAC's Web site: <http://www.treas.gov/ofac.html.

FOR FURTHER INFORMATION CONTACT: Chief of Penalties, tel.: (202) 622-
6140, or Chief Counsel, tel.: (202) 622-2410.

SUPPLEMENTARY INFORMATION:

I. The Proposed Rule

    Published elsewhere in this separate part of the Federal Register
is an interim final rule by which OFAC is revising its civil penalties
regulations promulgated pursuant to the Trading with the Enemy Act.
These revisions consolidate substantive changes to the Foreign Assets
Control Regulations, 31 CFR part 500, and the Cuban Assets Control
Regulations, 31 CFR part 515, in a new subpart of the Reporting and
Procedures Regulations, 31 CFR part 501, renamed Reporting, Procedures,
and Penalties Regulations. Conforming changes are made to the other
parts of 31 CFR chapter V. The preamble to the interim final rule
explains these provisions of the proposed rule in detail, and the text
of the interim final rule serves as the text for this proposed rule.

II. Procedural Requirements

    Because this interim final rule pertains to a foreign affairs
function of the United States, it is not subject to Executive Order
12866.
    Although we are issuing this notice of proposed rulemaking to
obtain public comments on the interim final rule published elsewhere in
this separate part of this issue of the Federal Register, notice and
public procedure are not required for the reasons stated in the
preamble to the interim final rule. Because no notice of proposed
rulemaking is required, the provisions of the Regulatory Flexibility
Act (5 U.S.C. chapter 6) do not apply.
    The collections of information in the proposed rule arise during
the conduct of administrative actions or investigations by OFAC against
specific individuals or entities. Pursuant to 44 U.S.C.
3518(c)(1)(B)(ii), these collections are not subject to the
requirements of the Paperwork Reduction Act.

List of Subjects

31 CFR Part 500

    Administrative practice and procedure, Banks, Banking, Cambodia,
Currency, Foreign claims, Foreign investments in United States, Foreign
trade, Korea, Democratic Peoples Republic of, Penalties, Reporting and
recordkeeping requirements, Sanctions, Securities, Vietnam.

31 CFR Part 501

    Administrative practice and procedure, Penalties, Reporting and
recordkeeping requirements, Sanctions.

31 CFR Part 505

    Administrative practice and procedure, Penalties, Foreign trade,
Sanctions.

31 CFR Part 515

    Administrative practice and procedure, Banks, Banking, Cuba,
Currency, Foreign investments in United States, Foreign trade,
Penalties, Reporting and recordkeeping requirements, Sanctions,
Securities, Travel restrictions.

31 CFR Part 535

    Administrative practice and procedure, Iran, Sanctions.

31 CFR Part 536

    Administrative practice and procedure, Narcotics, Sanctions.

31 CFR Part 537

    Administrative practice and procedure, Burma, Sanctions.

31 CFR Part 538

    Administrative practice and procedure, Sanctions, Sudan.

31 CFR Part 539

    Administrative practice and procedure, Sanctions, Weapons of mass
destruction.

31 CFR Part 540

    Administrative practice and procedure, Highly enriched uranium,
Sanctions.

31 CFR Part 545

    Administrative practice and procedure, Afghanistan, Sanctions.

31 CFR Part 550

    Administrative practice and procedure, Libya, Sanctions.

31 CFR Part 560

    Administrative practice and procedure, Iran, Sanctions.

31 CFR Part 575

    Administrative practice and procedure, Iraq, Sanctions.

31 CFR Part 585

    Administrative practice and procedure, Sanctions, Federal Republic
of Yugoslavia.

31 CFR Part 586

    Administrative practice and procedure, Sanctions, Federal Republic
of Yugoslavia.

31 CFR Part 587

    Administrative practice and procedure, Sanctions, Federal Republic
of Yugoslavia.

31 CFR Part 588

    Administrative practice and procedure, Sanctions, Western Balkans.

31 CFR Part 590

    Administrative practice and procedure, Angola, Sanctions.

31 CFR Part 591

    Administrative practice and procedure, Diamonds, Sanctions.

[[Page 53663]]

31 CFR Part 594

    Administrative practice and procedure, Sanctions, Global terrorism.

31 CFR Part 595

    Administrative practice and procedure, Sanctions, Terrorism.

31 CFR Part 596

    Administrative practice and procedure, Sanctions, Terrorism.

31 CFR Part 597

    Administrative practice and procedure, Sanctions, Terrorism.

31 CFR Part 598

    Administrative practice and procedure, Narcotics, Sanctions.

Authority and Issuance

    For the reasons set forth above, OFAC proposes to adopt as a final
rule the interim final rule providing revisions to its civil penalties
regulations promulgated pursuant to the Trading with the Enemy Act.
    [The text of the proposed amendments is the same as the text of the
interim final rule published elsewhere in this separate part of this
issue of the Federal Register.]

    Dated: August 29, 2003.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: August 29, 2003.
Juan Zarate,
Deputy Assistant Secretary (Terrorist Financing and Financial Crimes),
Department of the Treasury.
[FR Doc. 03-22969 Filed 9-5-03; 4:30 pm]

BILLING CODE 4810-25-P

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[Federal Register: September 11, 2003 (Volume 68, Number 176)]
[Rules and Regulations]
[Page 53639-53661]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11se03-20]

[[Page 53639]]

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Part II

Department of the Treasury

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Office of Foreign Assets Control

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31 CFR Parts 500, 501, 505, et al.

Foreign Assets Control Regulations; Reporting and Procedures
Regulations; Cuban Assets Control Regulations: Publication of Revised
Civil Penalties Hearing Regulations; Interim Final Rule and Proposed
Rule

[[Page 53640]]

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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 500, 501, 505, 515, 535, 536, 537, 538, 539, 540, 545,
550, 560, 575, 585, 586, 587, 588, 590, 591, 594, 595, 596, 597,
and 598

Foreign Assets Control Regulations; Reporting and Procedures
Regulations; Cuban Assets Control Regulations: Publication of Revised
Civil Penalties Hearing Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Interim final rule with request for comments.

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SUMMARY: The Office of Foreign Assets Control (``OFAC'') of the U.S.
Department of the Treasury (``Treasury'') is issuing this interim final
rule to provide revisions to its civil penalties regulations
promulgated pursuant to the Trading with the Enemy Act. These revisions
consolidate substantive changes to the Foreign Assets Control
Regulations, and the Cuban Assets Control Regulations, in a new subpart
of the Reporting and Procedures Regulations, renamed Reporting,
Procedures, and Penalties Regulations. Conforming changes are made to
the other parts of the regulations.

DATES: This interim final rule is effective September 11, 2003. Written
comments on this interim final rule may be submitted on or before
October 14, 2003.

ADDRESSES: Comments may be submitted by mail, by facsimile, or through
OFAC's Web site. Because paper mail in the Washington, DC area may be
subject to delay, electronic mail submission is recommended.
    Mailing address: Chief of Records, ATTN Request for Comments,
Office of Foreign Assets Control, Department of the Treasury, 1500
Pennsylvania Avenue, NW., Washington, DC 20220.
    Facsimile number: (202) 622-1657. OFAC's Web site: <http://www.treas.gov/ofac.html
. Comments must be in writing. OFAC
will not accept comments accompanied by a request that all or part of
the submission be treated confidentially because of its business
proprietary nature or for any other reason. All comments received by
the deadline will be a matter of public record and will be made
available on OFAC's Web site.

FOR FURTHER INFORMATION CONTACT: Chief of Penalties, tel.: (202) 622-
6140, or Chief Counsel, tel.: (202) 622-2410.

SUPPLEMENTARY INFORMATION:

Electronic Availability

    This document and additional information concerning OFAC are
available from OFAC's Web site <http://www.treas.gov/ofac.html
 or via facsimile through a 24-hour fax-on-demand
service, tel: (202) 622-0077. Comments on this interim final rule may
be submitted electronically through OFAC's Web site http://www.treas.gov/ofac.html
.

Analysis of the Interim Final Rule

Background

    OFAC hereby publishes as revisions to 31 CFR parts 500, 501, and
515 its civil penalties regulations promulgated pursuant to the Trading
with the Enemy Act. These revisions expand on and clarify existing
civil penalties procedures. They are intended to promote the
transparency of OFAC's procedures and to streamline the existing
regulatory scheme. In order to effect a procedurally fair and
expeditious resolution of civil penalties cases, OFAC intends that the
revised rules for the conduct and review of agency hearings, contained
at 31 CFR Sec. Sec.  501.710-501.761, shall be effective for all
hearings regardless of whether the request for hearing was made before
the effective date of these revisions.
    Currently, the only sanctions programs implemented pursuant to the
Trading with the Enemy Act, and significantly affected by these
changes, are the Foreign Assets Control Regulations (applicable to
North Korea and Vietnam), the Cuban Assets Control Regulations
(applicable to Cuba), and the Transaction Control Regulations, at 31
CFR part 505 (applicable to certain offshore trade in strategic goods
with the former Soviet Bloc). For ease of the reader, the relevant
subparts of parts 500, 501, and 515 are being republished in their
entirety. OFAC is also making non-substantive conforming amendments to
each of the other parts of 31 CFR chapter V.

Narrative Overview

    The administrative process for enforcing TWEA sanctions programs
proceeds as follows:
    (a) The Director of the Office of Foreign Assets Control will
notify a suspected violator (hereinafter ``respondent'') of an alleged
violation by issuing a ``Prepenalty Notice.'' The Prepenalty Notice
shall describe the alleged violation(s) and include a proposed civil
penalty amount.
    (b) The respondent will have 60 days from the date the Prepenalty
Notice is served to make a written presentation either defending
against the alleged violation or admitting the violation. A respondent
who admits a violation may offer information as to why a monetary
penalty should not be imposed or why, if imposed, the monetary penalty
should be in a lesser amount than proposed. Information presented
during this period may also be used in informal settlement
negotiations.
    (c) Absent a settlement agreement or a finding that no violation
occurred, the Director of the Office of Foreign Assets Control will
issue a ``Penalty Notice.'' The respondent will have 30 days from the
date of service to either pay the penalty or request a hearing.
    (d) If the respondent requests a hearing, the Director of the
Office of Foreign Assets Control will have two options:
    (1) The Director may issue an ``Order Instituting Proceedings'' and
refer the matter to an Administrative Law Judge for a hearing and
decision; or
    (2) The Director may determine to discontinue the penalty action
based on information presented by the respondent.
    (e) Absent review by a Secretary's designee, the decision of the
Administrative Law Judge will become the final decision of the
Department without further proceedings.
    (f) If review is taken by a Secretary's designee, the Secretary's
designee reaches a final Department decision.

Procedural Requirements

    Because this interim final rule pertains to a foreign affairs
function of the United States, it is not subject to Executive Order
12866.
    Pursuant to 5 U.S.C. 553(a)(1), general notice of proposed rule
making is not applicable to this interim final rule because it involves
a foreign affairs function of the United States. Moreover, Treasury
finds, in accordance with 5 U.S.C. 553(b)(A), that notice and public
procedure is not required because this interim final rule involves
agency procedure and practice. Moreover, this rule merely re-orders and
clarifies the existing administrative process for civil penalty cases
and will facilitate the provision of hearings for persons who have
already requested them.
    Notwithstanding the above findings, however, in the interest of
receiving full public comment, Treasury is also issuing a companion
proposed rule with request for comment on all aspects of the interim
final rule. Published elsewhere in a separate part of this issue of the
Federal Register is a notice of

[[Page 53641]]

proposed rulemaking proposing to adopt the provisions of this interim
final rule as a final rule.
    Because no notice of proposed rulemaking is required, the
provisions of the Regulatory Flexibility Act (5 U.S.C. chapter 6) do
not apply.
    The collections of information in the proposed rule arise during
the conduct of administrative actions or investigations by OFAC against
specific individuals or entities. Pursuant to 44 U.S.C.
3518(c)(1)(B)(ii), these collections are not subject to the
requirements of the Paperwork Reduction Act.

List of Subjects

31 CFR Part 500

    Administrative practice and procedure, Banks, banking, Cambodia,
Currency, Foreign claims, Foreign investments in United States, Foreign
trade, Korea, Democratic Peoples Republic of, Penalties, Reporting and
recordkeeping requirements, Sanctions, Securities, Vietnam.

31 CFR Part 501

    Administrative practice and procedure, Penalties, Reporting and
recordkeeping requirements, Sanctions.

31 CFR Part 505

    Administrative practice and procedure, Penalties, Foreign trade,
Sanctions.

31 CFR Part 515

    Administrative practice and procedure, Banks, banking, Cuba,
Currency, Foreign investments in United States, Foreign trade,
Penalties, Reporting and recordkeeping requirements, Sanctions,
Securities, Travel restrictions.

31 CFR Part 535

    Administrative practice and procedure, Iran, Sanctions.

31 CFR Part 536

    Administrative practice and procedure, Narcotics, Sanctions.

31 CFR Part 537

    Administrative practice and procedure, Burma, Sanctions.

31 CFR Part 538

    Administrative practice and procedure, Sanctions, Sudan.

31 CFR Part 539

    Administrative practice and procedure, Sanctions, Weapons of mass
destruction.

31 CFR Part 540

    Administrative practice and procedure, Highly enriched uranium,
Sanctions.

31 CFR Part 545

    Administrative practice and procedure, Afghanistan, Sanctions.

31 CFR Part 550

    Administrative practice and procedure, Libya, Sanctions.

31 CFR Part 560

    Administrative practice and procedure, Iran, Sanctions.

31 CFR Part 575

    Administrative practice and procedure, Iraq, Sanctions.

31 CFR Part 585

    Administrative practice and procedure, Sanctions, Federal Republic
of Yugoslavia.

31 CFR Part 586

    Administrative practice and procedure, Sanctions, Federal Republic
of Yugoslavia.

31 CFR Part 587

    Administrative practice and procedure, Sanctions, Federal Republic
of Yugoslavia.

31 CFR Part 588

    Administrative practice and procedure, Sanctions, Western Balkans.

31 CFR Part 590

    Administrative practice and procedure, Angola, Sanctions.

31 CFR Part 591

    Administrative practice and procedure, Diamonds, Sanctions.

31 CFR Part 594

    Administrative practice and procedure, Sanctions, Global Terrorism.

31 CFR Part 595

    Administrative practice and procedure, Sanctions, Terrorism.

31 CFR Part 596

    Administrative practice and procedure, Sanctions, Terrorism.

31 CFR Part 597

    Administrative practice and procedure, Sanctions, Terrorism.

31 CFR Part 598

    Administrative practice and procedure, Narcotics, Sanctions.

0
For the reasons set forth in the preamble, 31 CFR parts 500, 501, 505,
515, 535, 536, 537, 538, 539, 540, 545, 550, 560, 575, 585, 586, 587,
588, 590, 591, 594, 595, 596, 597, and 598 are amended as follows:

PART 500--FOREIGN ASSETS CONTROL REGULATIONS

0
1. The authority for part 500 continues to read:

    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.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 500.501 is added to Subpart E to read as follows:

Sec.  500.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart G--Penalties

0
3. Section 500.701 is revised to read as follows:

Sec.  500.701  Penalties.

    For provisions relating to penalties, see part 501, subpart D, of
this chapter.

Sec. Sec.  500.702-500.718  [Removed]

0
4. Sections 500.702--500.718 are removed from subpart G.

Subpart H--Procedures

Sec.  500.801  [Amended]

0
5. Section 500.801 is amended by revising ``subpart D of part 501'' to
read ``part 501, subpart E,''.

PART 501--REPORTING, PROCEDURES AND PENALTIES REGULATIONS

0
1. The heading of Part 501 is revised to read as set forth above.

0
2. The authority for part 501 is revised to read as follows:

    Authority: 18 U.S.C. 2332d; 21 U.S.C. 1901-1908; 22 U.S.C. 287c;
22 U.S.C. 2370(a); 31 U.S.C. 321(b); 50 U.S.C. 1701-1706; 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; E.O. 12854, 58 FR 36587, 3
CFR, 1993 Comp., p. 614.

[[Page 53642]]

0
3. Subpart E of Part 501 is redesignated as new Subpart F.
0
4. Subpart D of Part 501 is redesignated as new Subpart E.

0
5. A new Subpart D is added to Part 501 to read as follows:

Subpart D--Trading With the Enemy Act (TWEA) Penalties

Sec.
501.700 Applicability.
501.701 Penalties.
501.702 Definitions.
501.703 Overview of civil penalty process and construction of rules.
501.704 Appearance and practice.
501.705 Service and filing.
501.706 Prepenalty Notice; issuance by Director.
501.707 Response to Prepenalty Notice.
501.708 Director's finding of no penalty warranted.
501.709 Penalty Notice.
501.710 Settlement.
501.711 Hearing request.
501.712 Acknowledgment of hearing request.
501.713 Order Instituting Proceedings.
501.714 Answer to Order Instituting Proceedings.
501.715 Notice of hearing.
501.716 Default.
501.717 Consolidation of proceedings.
501.718 Conduct and order of hearings.
501.719 Ex parte communications.
501.720 Separation of functions.
501.721 Hearings to be public.
501.722 Prehearing conferences.
501.723 Prehearing disclosures; methods to discover additional
matter.
501.724 Documents that may be withheld.
501.725 Confidential treatment of information in certain filings.
501.726 Motions.
501.727 Motion for summary disposition.
501.728 Subpoenas.
501.729 Sanctions.
501.730 Depositions upon oral examination.
501.731 Depositions upon written questions.
501.732 Evidence.
501.733 Evidence: confidential information; protective orders.
501.734 Introducing prior sworn statements of witnesses into the
record.
501.735 Proposed findings, conclusions and supporting briefs.
501.736 Authority of Administrative Law Judge.
501.737 Adjustments of time, postponements and adjournments.
501.738 Disqualification and withdrawal of Administrative Law Judge.
501.739 Record in proceedings before Administrative Law Judge;
retention of documents; copies.
501.740 Decision of Administrative Law Judge.
501.741 Review of decision or ruling.
501.742 Secretary's designee's consideration of decisions by
Administrative Law Judge.
501.743 Briefs filed with the Secretary's designee.
501.744 Record before the Secretary's designee.
501.745 Orders and decisions: signature, date and public
availability.
501.746 Referral to United States Department of Justice;
administrative collection measures.
501.747 Procedures on remand of decisions.

Sec.  501.700  Applicability.

    This subpart is applicable only to those parts of chapter V
promulgated pursuant to the TWEA, which include parts 500, 505, and
515.

Sec.  501.701  Penalties.

    (a) Attention is directed to section 16 of the 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 Government.
    (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. Note: The current $55,000 civil
penalty cap may be adjusted for inflation pursuant to the Federal Civil
Penalties Inflation Adjustment Act of 1990.
    (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.  501.702  Definitions.

    (a) Chief Counsel means the Chief Counsel (Foreign Assets Control),
Office of the General Counsel, Department of the Treasury.
    (b) Day means calendar day. In computing any period of time
prescribed in or allowed by this subpart, the day of the act, event, or
default from which the designated period of time begins to run shall
not be included. The last day of the period so computed shall be
included unless it is a Saturday, Sunday, or Federal legal holiday, in
which event the period runs until the end of the next day that is not a
Saturday, Sunday, or Federal legal holiday. Intermediate Saturdays,
Sundays, and Federal legal holidays shall be excluded from the
computation when the period of time prescribed or allowed is seven days
or less, not including any additional time allowed for service by mail.
If on the day a filing is to be made, weather or other conditions have
caused the designated filing location to close, the filing deadline
shall be extended to the end of the next day that the filing location
is not closed and that is not a Saturday, a Sunday, or a Federal legal
holiday. If service is made by mail, three days shall be added to the
prescribed period for response.
    (c) Department means the Department of the Treasury.
    (d) Director means the Director of the Office of Foreign Assets
Control, Department of the Treasury.
    (e) Ex Parte Communication means any material oral or written
communication not on the public record concerning the merits of a
proceeding with respect to which reasonable prior notice to all parties
is not given, on any material matter or proceeding covered by these
rules, that takes place between: A party to the proceeding, a party's
counsel, or any other interested

[[Page 53643]]

individual; and the Administrative Law Judge or Secretary's designee
handling that proceeding. A request to learn the status of a proceeding
does not constitute an ex parte communication; and settlement inquiries
and discussions do not constitute ex parte communications.
    (f) General Counsel means the General Counsel of the U.S.
Department of the Treasury.
    (g) Order of Settlement means a written order issued by the
Director terminating a civil penalty action. An Order of Settlement
does not constitute an agency decision that any violation took place.
    (h) Order Instituting Proceedings means a written order issued by
the Director to initiate a civil penalty hearing.
    (i) Prepenalty Notice means a written notification from the
Director informing a respondent of the alleged violation(s) and the
respondent's right to respond.
    (j) Penalty Notice means a written notification from the Director
informing a respondent that the Director has made a finding of
violation and, absent a request for a hearing, will impose a civil
monetary penalty.
    (k) Proceeding means any agency process initiated by an ``Order
Instituting Proceedings,'' or by the filing of a petition for review of
an Administrative Law Judge's decision or ruling.
    (l) Respondent means any individual alleged by the Director to have
violated a TWEA-based sanctions regulation.
    (m) Secretary's designee means a U.S. Treasury Department official
delegated responsibility by the Secretary of the Treasury to consider
petitions for review of Administrative Law Judge decisions made in
civil penalty hearings conducted pursuant to this subpart.
    (n) Secretary means the Secretary of the Treasury.

Sec.  501.703  Overview of civil penalty process and construction of
rules.

    (a) The administrative process for enforcing TWEA sanctions
programs proceeds as follows:
    (1) The Director of the Office of Foreign Assets Control will
notify a suspected violator (hereinafter ``respondent'') of an alleged
violation by issuing a ``Prepenalty Notice.'' The Prepenalty Notice
shall describe the alleged violation(s) and include a proposed civil
penalty amount.
    (2) The respondent will have 60 days from the date the Prepenalty
Notice is served to make a written presentation either defending
against the alleged violation or admitting the violation. A respondent
who admits a violation may offer information as to why a monetary
penalty should not be imposed or why, if imposed, the monetary penalty
should be in a lesser amount than proposed.
    (3) Absent a settlement agreement or a finding that no violation
occurred, the Director of the Office of Foreign Assets Control will
issue a ``Penalty Notice.'' The respondent will have 30 days from the
date of service to either pay the penalty or request a hearing.
    (4) If the respondent requests a hearing, the Director of the
Office of Foreign Assets Control will have two options:
    (i) The Director may issue an ``Order Instituting Proceedings'' and
refer the matter to an Administrative Law Judge for a hearing and
decision; or
    (ii) The Director may determine to discontinue the penalty action
based on information presented by the respondent.
    (5) Absent review by a Secretary's designee, the decision of the
Administrative Law Judge will become the final decision of the
Department without further proceedings.
    (6) If review is taken by a Secretary's designee, the Secretary's
designee reaches the final decision of the Department.
    (7) A respondent may seek judicial review of the final decision of
the Department.
    (b) Construction of rules. The rules contained in this subpart
shall be construed and administered to promote the just, speedy, and
inexpensive determination of every action. To the extent there is a
conflict between the rules contained in this subpart and a procedural
requirement contained in any statute, the requirement in the statute
shall control.

Sec.  501.704.  Appearance and practice.

    No person shall be represented before the Director in any civil
penalty matter, or an Administrative Law Judge or the Secretary's
designee in a civil penalty hearing, under this subpart except as
provided in this section.
    (a) Representing oneself. In any proceeding, an individual may
appear on his or her own behalf.
    (b) Representative. Upon written notice to the Director,
    (1) A respondent may be represented by a personal representative.
If a respondent wishes to be represented by counsel, such counsel must
be an attorney at law admitted to practice before the Supreme Court of
the United States, the highest court of any State, commonwealth,
possession, or territory of the United States, or the District of
Columbia;
    (2) a duly authorized member of a partnership may represent the
partnership; and
    (3) a bona fide officer, director, or employee of a corporation,
trust or association may represent the corporation, trust or
association.
    (c) Director representation. The Director shall be represented by
members of the Office of Chief Counsel or any other counsel
specifically assigned by the General Counsel.
    (d) Conflicts of interest--(1) Conflict of interest in
representation. No individual shall appear as representative for a
respondent in a proceeding conducted pursuant to this subpart if it
reasonably appears that such representation may be materially limited
by that representative's responsibilities to a third person, or by that
representative's own interests.
    (2) Corrective measures. An 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.

Sec.  501.705  Service and filing.

    (a) Service of Prepenalty Notice, Penalty Notice, Acknowledgment of
Hearing Request and Order Instituting Proceedings. The Director shall
cause any Prepenalty Notice, Penalty Notice, Acknowledgment of Hearing
Request, Order Instituting Proceedings, and other related orders and
decisions, or any amendments or supplements thereto, to be served upon
the respondent.
    (1) Service on individuals. Service shall be complete:
    (i) Upon the date of mailing by first class (regular) mail to the
respondent at the respondent's last known address, or to a
representative authorized to receive service, including qualified
representatives noticed to the Director pursuant to Sec.  501.704.
Absent satisfactory evidence in the administrative record to the
contrary, the Director may presume that the date of mailing is the date
stamped on the first page of the notice or order. The respondent may
rebut the presumption that a notice or order was mailed on the stamped
mailing date only by presenting evidence of the postmark date on the
envelope in which the notice or order was mailed;
    (ii) Upon personal service on the respondent; or leaving a copy at
the respondent's place of business with a clerk or other person in
charge thereof; or leaving a copy at the respondent's

[[Page 53644]]

dwelling house or usual place of abode with a person at least 18 years
of age then residing therein; or with any other representative
authorized by appointment or by law to accept or receive service for
the respondent, including representatives noticed to the Director
pursuant to Sec.  501.704; 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
notice or order was left; or
    (iii) 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
(a)(1)(i) and (ii) of this section inappropriate or ineffective for
service upon the nonresident respondent.
    (2) Service on corporations and other entities. Service is complete
upon delivering a copy of the notice or order to a partner, bona fide
officer, director, managing or general agent, or any other agent
authorized by appointment or by law to receive such notice, by any
method specified in paragraph (a)(1) of this section.
    (b) Service of responses to Prepenalty Notice, Penalty Notice, and
requests for a hearing. A respondent shall serve a response to a
Prepenalty Notice and any request for a hearing on the Director through
the Chief of Civil Penalties, Office of Foreign Assets Control, U.S.
Treasury Department, 1500 Pennsylvania Avenue, NW., Washington DC
20220, with the envelope prominently marked ``Urgent: Part 501
Action.'' Service shall be complete upon the date of mailing, as
evidenced by the post-mark date on the envelope, by first class
(regular) mail.
    (c) Service or filing of papers in connection with any hearing by
an Administrative Law Judge or review by the Secretary's designee. (1)
Service on the Director and/or each respondent. (i) Each paper,
including each notice of appearance, written motion, brief, petition
for review, statement in opposition to petition for review, or other
written communication, shall be served upon the Director and/or each
respondent in the proceeding in accordance with paragraph (a) of this
section; provided, however, that no service shall be required in the
case of documents that are the subject of a motion seeking a protective
order to limit or prevent disclosure to another party.
    (ii) Service upon the Director shall be made through the Chief
Counsel (Foreign Assets Control), U.S. Treasury Department, 1500
Pennsylvania Avenue, NW., Washington, DC 20220, with the envelope
prominently marked ``Urgent: Part 501 Proceeding.''
    (iii) Service may be made:
    (A) As provided in paragraph (a) of this section;
    (B) By mailing the papers through the U.S. Postal Service by
Express Mail; or
    (C) By transmitting the papers by facsimile machine where the
following conditions are met:
    (1) The persons serving each other by facsimile transmission have
agreed to do so in a writing, signed by each party, which specifies
such terms as they deem necessary with respect to facsimile machine
telephone numbers to be used, hours of facsimile machine operation, the
provision of non-facsimile original or copy, and any other such
matters; and
    (2) Receipt of each document served by facsimile is confirmed by a
manually signed receipt delivered by facsimile machine or other means
agreed to by the parties.
    (iv) Service by U.S. Postal Service Express Mail is complete upon
delivery as evidenced by the sender's receipt. Service by facsimile is
complete upon confirmation of transmission by delivery of a manually
signed receipt.
    (2) Filing with the Administrative Law Judge. Unless otherwise
provided, all briefs, motions, objections, applications or other
filings made during a proceeding before an Administrative Law Judge,
and all requests for review by the Secretary's designee, shall be filed
with the Administrative Law Judge.
    (3) Filing with the Secretary's designee. And all briefs, motions,
objections, applications or other filings made during a proceeding
before the Secretary's designee shall be filed with the Secretary's
designee.
    (4) Certificate of service. Papers filed with an Administrative Law
Judge or Secretary's designee shall be accompanied by a certificate
stating the name of each person served, the date of service, the method
of service and the mailing address or facsimile telephone number to
which service was made, if not made in person. If the method of service
to any person is different from the method of service to any other
person, the certificate shall state why a different means of service
was used.
    (5) Form of briefs. All briefs containing more than 10 pages shall,
to the extent applicable, include a table of contents, an alphabetized
table of cases, a table of statutes, and a table of other authorities
cited, with references to the pages of the brief wherein they are
cited.
    (6) Specifications. All original documents shall be filed with the
Administrative Law Judge or Secretary's designee, as appropriate.
Papers filed in connection with any proceeding shall:
    (i) Be on one grade of unglazed white paper measuring 8.5 x 11
inches, except that, to the extent that the reduction of larger
documents would render them illegible, such documents may be filed on
larger paper;
    (ii) Be typewritten or printed in either 10- or 12-point typeface
or otherwise reproduced by a process that produces permanent and
plainly legible copies;
    (iii) Include at the head of the paper, or on a title page, the
title of the proceeding, the name(s) of each respondent, the subject of
the particular paper or pleading, and the file number assigned to the
proceeding;
    (iv) Be formatted with all margins at least 1 inch wide;
    (v) Be double-spaced, with single-spaced footnotes and single-
spaced indented quotations; and
    (vi) Be stapled, clipped or otherwise fastened in the upper left
corner.
    (7) Signature requirement and effect. All papers must be dated and
signed by a member of the Office of Chief Counsel, or other counsel
assigned by the General Counsel to represent the Director, or a
respondent or respondent's representative, as appropriate. If a filing
is signed by a respondent's representative it shall state that
representative's mailing address and telephone number. A respondent who
represents himself or herself shall sign his or her individual name and
state his or her address and telephone number on every filing. A
witness deposition shall be signed by the witness.
    (i) Effect of signature. The signature shall constitute a
certification that:
    (A) The person signing the filing has read the filing;
    (B) To the best of his or her knowledge, information, and belief,
formed after reasonable inquiry, the filing is well grounded in fact
and is warranted by existing law or a good faith argument for the
extension, modification, or reversal of existing law; and
    (C) The filing is not made for any improper purpose, such as to
harass or to cause unnecessary delay or needless increase in the cost
of adjudication.
    (ii) If a filing is not signed, the Administrative Law Judge (or
the

[[Page 53645]]

Secretary's designee) shall strike the filing, unless it is signed
promptly after the omission is called to the attention of the person
making the filing.
    (d) Service of written orders or decisions issued by the
Administrative Law Judge or Secretary's designee. Written orders or
decisions issued by the Administrative Law Judge or the Secretary's
designee shall be served promptly on each respondent and the Director
pursuant to any method of service authorized under paragraph (a) of
this section. Service of such orders or decisions shall be made by the
Administrative Law Judge or the Secretary's designee, as appropriate.

Sec.  501.706  Prepenalty Notice; issuance by Director.

    (a) When required. If the Director has reason to believe there has
occurred a violation of any provision of parts 500 or 515 of this
chapter 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 pursuant to parts 500
or 515 of this chapter or otherwise under the Trading With the Enemy
Act, and the Director determines that further civil proceedings are
warranted, the Director shall issue a Prepenalty Notice. The Prepenalty
Notice may be issued whether or not another agency has taken any action
with respect to the matter.
    (b) Contents of notice.
    (1) Facts of violation. The Prepenalty Notice shall describe the
alleged violation, specify the laws and regulations allegedly violated,
and state the amount of the proposed monetary penalty.
    (2) Right to respond. The Prepenalty Notice shall inform the
respondent of respondent's right to make a written presentation within
the time prescribed in Sec.  501.707 as to why the respondent believes
there should be no finding of a violation or why, if the respondent
admits the violation, a monetary penalty should not be imposed or why,
if imposed, the monetary penalty should be in a lesser amount than
proposed. The Prepenalty Notice shall also inform the respondent that:
    (i) The act of submitting a written response by the respondent is a
factor that may result in a lower penalty absent any aggravating
factors; and
    (ii) If the respondent fails to respond to the Prepenalty Notice
within the applicable 60-day period set forth in Sec.  501.707, the
Director may proceed with the issuance of a Penalty Notice.
    (3) Right to request a hearing. The Prepenalty Notice shall inform
the respondent of respondent's right, if a subsequent Penalty Notice is
issued, to request an administrative hearing. The Director will not
consider any request for an administrative hearing until a Penalty
Notice has been issued.

Sec.  501.707  Response to Prepenalty Notice.

    (a) Deadline for response.
    (1) The respondent shall have 60 days after the date of service of
the Prepenalty Notice pursuant to Sec.  501.705(a) to respond thereto.
The response, signed and dated, shall be served as provided in Sec.
501.705(b).
    (2) In response to a written request by the respondent, the
Director may, at his or her discretion for the purpose of conducting
settlement negotiations or for other valid reasons, grant additional
time for a respondent to submit a response to the Prepenalty Notice.
    (3) The failure to submit a response within the time period set
forth in this paragraph (a), including any additional time granted by
the Director, shall be deemed to be a waiver of the right to respond to
the Prepenalty Notice.
    (b) Form and contents of response.
    (1) In general. The response need not be in any particular form,
but must be typewritten and contain the heading ``Response to
Prepenalty Notice'' and the Office of Foreign Assets Control
identification number shown near the top of the Prepenalty Notice. It
should be responsive to the allegations contained therein and set forth
the nature of the respondent's admission of the violation, or defenses
and claims for mitigation, if any.
    (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 constitute a denial. Any allegation
not specifically addressed in the response shall be deemed admitted.
    (ii) The response must 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 the respondent wishes to
assert must be included in the response.
    (iii) The response must accurately state (for each respondent, if
applicable) the respondent's full name and address for future service,
together with a current telephone and, if applicable, facsimile machine
number. If respondent is represented, the representative's full name
and address, together with telephone and facsimile numbers, may be
provided instead of service information for the respondent. The
respondent or respondent's representative of record is responsible for
providing timely written notice to the Director of any subsequent
changes in the information provided.
    (iv) Financial disclosure statement requirement. Any respondent who
asserts financial hardship or an inability to pay a penalty shall
include with the response a financial disclosure statement setting
forth in detail the basis for asserting the financial hardship or
inability to pay a penalty, subject to 18 U.S.C. 1001.
    (2) Settlement. In addition, or as an alternative, to a written
response to a Prepenalty Notice, the respondent or respondent's
representative may seek settlement of the alleged violation(s). See
Sec.  501.710. In the event of settlement prior to the issuance of a
Penalty Notice, the claim proposed in the Prepenalty Notice will be
withdrawn and the respondent will not be required to make a written
response to the Prepenalty Notice. In the event no settlement is
reached, a written response to the Prepenalty Notice is required
pursuant to paragraph (c) of this section.

Sec.  501.708  Director's finding of no penalty warranted.

    If after considering any written response to the Prepenalty Notice
submitted pursuant to Sec.  501.707 and any other relevant facts, the
Director determines that there was no violation or that the violation
does not warrant the imposition of a civil monetary penalty, the
Director promptly shall notify the respondent in writing of that
determination and that no civil monetary penalty pursuant to this
subpart will be imposed.

Sec.  501.709  Penalty notice.

    (a) If, after considering any written response to the Prepenalty
Notice, and any other relevant facts, the Director determines that
there was a violation by the respondent and that a monetary penalty is
warranted, the Director promptly shall issue a Penalty Notice informing
the respondent that, absent a timely request for an administrative
hearing, the Director will impose the civil monetary penalty described
in the Penalty Notice. The Penalty Notice shall inform the respondent:
    (1) Of the respondent's right to submit a written request for an
administrative hearing not later than 30 days after the date of service
of the Penalty Notice;
    (2) That in the absence of a timely request for a hearing, the
issuance of the Penalty Notice constitutes final agency action;
    (3) That, absent a timely request for a hearing, payment (or
arrangement with the Financial Management Service of the Department for
installment

[[Page 53646]]

payment) of the assessed penalty must be made not later than 30 days
after the date of service of the Penalty Notice; and
    (4) That absent a timely request for a hearing, the respondent must
furnish respondent's taxpayer identification number pursuant to 31
U.S.C. 7701 and that the Director intends to use such information for
the purposes of collecting and reporting on any delinquent penalty
amount in the event of a failure to pay the penalty imposed.

Sec.  501.710  Settlement.

    (a) Availability. Either the Director or any respondent may, at any
time during the administrative civil penalty process described in this
subpart, propose an offer of settlement. The amount accepted in
settlement may be less than the civil penalty that might be imposed in
the event of a formal determination of violation. Upon mutual agreement
by the Director and a respondent on the terms of a settlement, the
Director shall issue an Order of Settlement.
    (b) Procedure.
    (1) Prior to issuance of Penalty Notice. Any offer of settlement
made by a respondent prior to the issuance of a Penalty Notice shall be
submitted, in writing, to the Chief of Civil Penalties, Office of
Foreign Assets Control, U.S. Department of the Treasury, 1500
Pennsylvania Avenue, NW., Washington, DC 20220.
    (2) After issuance of Penalty Notice. Any offer of settlement made
by a respondent after issuance of a Penalty Notice shall state that it
is made pursuant to this section; shall recite or incorporate as a part
of the offer the provisions of paragraphs (b)(5)(ii) and (b)(6) of this
section; shall be signed by the respondent making the offer, and not
only by his or her representative; and shall be submitted to the Chief
Counsel.
    (3) Extensions of time. The submission of any settlement offer does
not provide a basis for adjourning or otherwise delaying all or any
portion of the administrative civil penalty process.
    (i) Prior to issuance of Order Instituting Proceedings. Any
respondent (or potential respondent in the case of a pending Prepenalty
Notice) may request, in writing, that the Director withhold issuance of
any such notice, or grant an extension of time to respond to a any such
Notice, for a period not to exceed 60 days for the exclusive purpose of
effecting settlement. The Director may grant any such request, in
writing, under terms and conditions within his or her discretion.
    (ii) After issuance of Order Instituting Proceedings. Upon mutual
agreement of the Director and a respondent, the Administrative Law
Judge may grant an extension of time, for a period not to exceed 60
days, for the exclusive purpose of effecting settlement.
    (4) Views of Administrative Law Judge. Where an Administrative Law
Judge is assigned to a proceeding, the Director or the respondent may
request that the Administrative Law Judge express his or her views
regarding the appropriateness of the offer of settlement. A request for
the Administrative Law Judge to express his or her views on an offer of
settlement or otherwise to participate in a settlement conference
constitutes a waiver by the party making the request of any right to
claim bias or prejudgment by the Administrative Law Judge based on the
views expressed.
    (5) Waivers.
    (i) By submitting an offer of settlement, a respondent making the
offer waives, subject to acceptance of the offer:
    (A) All hearings pursuant to section 16 of the Trading with the
Enemy Act (50 U.S.C. App. 16);
    (B) The filing of proposed findings of fact and conclusions of law;
    (C) Proceedings before, and a decision by, an Administrative Law
Judge;
    (D) All post-hearing procedures; and
    (E) Judicial review by any court.
    (ii) By submitting an offer of settlement the respondent further
waives:
    (A) Such provisions of this subpart or other requirements of law as
may be construed to prevent any member of the Director's staff, or
members of the Office of Chief Counsel or other counsel assigned by the
General Counsel, from participating in or advising the Director as to
any order, opinion, finding of fact, or conclusion of law to be entered
pursuant to the offer; and
    (B) Any right to claim bias or prejudgment by the Director based on
the consideration of or discussions concerning settlement of all or any
part of the proceeding.
    (6) If the Director rejects the offer of settlement, the respondent
shall be so notified in writing and the offer of settlement shall be
deemed withdrawn. The rejected offer shall not constitute a part of the
record in any proceeding against the respondent making the offer,
provided, however, that rejection of an offer of settlement does not
affect the continued validity of waivers pursuant to paragraph (b)(5)
of this section with respect to any discussions concerning the rejected
offer of settlement.
    (7) No settlement offer or proposal, or any subsequent negotiation
or resolution, is admissible as evidence in any administrative
proceeding initiated by the Director.

Sec.  501.711  Hearing request.

    (a) Deadline for request. A request for an agency hearing shall be
served on the Director not later than 30 days after the date of service
of the Penalty Notice. See Sec.  501.705(b). A respondent may not
reserve the right to request a hearing after expiration of the 30
calendar day period. A request for a hearing that is not made as
required by this paragraph shall constitute a waiver of the
respondent's right to a hearing.
    (b) Form and contents of request. The request need not be in any
particular form, but must be typewritten and contain the heading
``Request for Agency Hearing''. The request must include the Office of
Foreign Assets Control identification number shown near the top of the
Penalty Notice. It should be responsive to the determination contained
in the Penalty Notice and set forth the nature of the respondent's
defenses or claims for mitigation, if any.
    (1) The request must admit or deny specifically each separate
determination of violation made in the Penalty Notice. If the
respondent is without knowledge as to a determination, the request
shall so state, and such statement shall constitute a denial. Any
determination not specifically addressed in the response shall be
deemed admitted.
    (2) The request must 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 the respondent wishes to
assert must be included in the request.
    (3) The request must accurately state, for each respondent (if
applicable), the respondent's full name and address for future service,
together with current telephone and, if applicable, a facsimile machine
number. If respondent is represented, the representative's full name
and address, together with telephone and facsimile numbers, may be
provided in lieu of service information for the respondent. The
respondent or respondent's representative is responsible for providing
timely written notice to the Director of any subsequent changes in the
information provided.
    (c) Signature requirement. The respondent or, if represented, the
respondent's representative, must sign the hearing request.

Sec.  501.712  Acknowledgment of hearing request.

    No later than 60 days after service of any hearing request, the
Director shall

[[Page 53647]]

acknowledge receipt and inform a respondent, in writing, whether an
Order Instituting Proceedings shall be issued.

Sec.  501.713  Order Instituting Proceedings.

    If a respondent makes a timely request for a hearing, the Director
shall determine, at his or her option, whether to dismiss the
violation(s) set forth in the Penalty Notice or to issue an Order
Instituting Proceedings to initiate the hearing process. The Order
shall be served on the respondent(s) as provided in Sec.
501.705(c)(1). The Director may, in his or her discretion, withdraw an
Order Instituting Proceedings at any time prior to the issuance of a
decision by the Administrative Law Judge.
    (a) Content of Order. The Order Instituting Proceedings shall:
    (1) Be prepared by the Office of the Chief Counsel or other counsel
assigned by the General Counsel and based on information provided by
the Director;
    (2) State the legal authority under which the hearing is to be
held;
    (3) Contain a short and plain statement of the alleged violation(s)
to be considered and determined (including the matters of fact and law
asserted) in such detail as will permit a specific response thereto;
    (4) State the amount of the penalty sought in the proceeding; and
    (5) Be signed by the Director.
    (b) Combining penalty actions. The Director may combine claims
contained in two or more Penalty Notices involving the same respondent,
and for which hearings have been requested, into a single Order
Instituting Proceedings.
    (c) Amendment to Order Instituting Proceedings. Upon motion by the
Director, the Administrative Law Judge may, at any time prior to
issuance of a decision, permit the Director to amend an Order
Instituting Proceedings to include new matters of fact or law that are
within the scope of the original Order Instituting Proceedings.

Sec.  501.714  Answer to Order Instituting Proceedings.

    (a) When required. Not later than 45 days after service of the
Order Instituting Proceedings, the respondent shall file, with the
Administrative Law Judge and the Office of Chief Counsel, an answer to
each of the allegations contained therein. If the Order Instituting
Proceedings is amended, the Administrative Law Judge may require that
an amended answer be filed and, if such an answer is required, shall
specify a date for the filing thereof.
    (b) Contents; effect of failure to deny. Unless otherwise directed
by the Administrative Law Judge, an answer shall specifically admit,
deny, or state that the respondent does not have, and is unable to
obtain, sufficient information to admit or deny each allegation in the
Order Instituting Proceedings. When a respondent intends to deny only a
part of an allegation, the respondent shall specify so much of it as is
true and shall deny only the remainder. A statement of lack of
information shall have the effect of a denial. A defense of res
judicata, statute of limitations or any other matter constituting an
affirmative defense shall be asserted in the answer. Any allegation not
specifically addressed in the answer shall be deemed admitted.
    (c) Motion for more definite statement. A respondent may file with
an answer a motion for a more definite statement of specified matters
of fact or law to be considered or determined. Such motion shall state
the respects in which, and the reasons why, each such matter of fact or
law should be required to be made more definite. If the motion is
granted, the order granting such motion shall set the periods for
filing such a statement and any answer thereto.
    (d) Amendments. A respondent may amend its answer at any time by
written consent of the Director or with permission of the
Administrative Law Judge. Permission shall be freely granted when
justice so requires.
    (e) Failure to file answer: default. If a respondent fails to file
an answer required by this subpart within the time prescribed, such
respondent may be deemed in default pursuant to Sec.  501.716(a). A
party may make a motion to set aside a default pursuant to Sec.
501.726(e).

Sec.  501.715  Notice of Hearing.

    (a) If the Director issues an Order Instituting Proceedings, the
respondent shall receive not less than 45 days notice of the time and
place of the hearing.
    (b) Time and place of hearing. All hearings shall be held in the
Washington, DC metropolitan area unless, based on extraordinary
reasons, otherwise mutually agreed by the respondent and the Director.
The time for any hearing shall be fixed with due regard for the public
interest and the convenience and necessity of the parties or their
representatives. Requests to change the time of a hearing may be
submitted to the Administrative Law Judge, who may modify the hearing
date(s) and/or time(s) and place. All requests for a change in the date
and time and/or place of a hearing must be received by the
Administrative Law Judge and served upon the parties no later than 15
days before the scheduled hearing date.
    (c) Failure to appear at hearings: default. Any respondent named in
an order instituting proceedings as a person against whom findings may
be made or penalties imposed who fails to appear (in person or through
a representative) at a hearing of which he or she has been duly
notified may be deemed to be in default pursuant to Sec.  501.716(a).
Without further proceedings or notice to the respondent, the
Administrative Law Judge may enter a finding that the right to a
hearing was waived, and the Penalty Notice shall constitute final
agency action as provided in Sec.  501.709(a)(2). A respondent may make
a motion to set aside a default pursuant to Sec.  501.726(e).

Sec.  501.716  Default.

    (a) A party to a proceeding may be deemed to be in default and the
Administrative Law Judge (or the Secretary's designee during review
proceedings) may determine the proceeding against that party upon
consideration of the record if that party fails:
    (1) To appear, in person or through a representative, at any
hearing or conference of which the party has been notified;
    (2) To answer, to respond to a dispositive motion within the time
provided, or otherwise to prosecute or defend the proceeding; or
    (3) To cure a deficient filing within the time specified by the
Administrative Law Judge (or the Secretary's designee) pursuant to
Sec.  501.729(b).
    (b) In deciding whether to determine the proceedings against a
party deemed to be in default, the Administrative Law Judge shall
consider the record of the proceedings (including the Order Instituting
Proceedings) and shall construe contested matters of fact and law
against the party deemed to be in default.
    (c) For information and procedures pertaining to a motion to set
aside a default, see Sec.  501.726(e).

Sec.  501.717  Consolidation of proceedings.

    By order of the Administrative Law Judge, proceedings involving
common questions of law and fact may be consolidated for hearing of any
or all the matters at issue in such proceedings. The Administrative Law
Judge may make such orders concerning the conduct of such proceedings
as he or she deems appropriate to avoid unnecessary cost or delay.
Consolidation shall not prejudice any rights under this subpart and
shall not

[[Page 53648]]

affect the right of any party to raise issues that could have been
raised if consolidation had not occurred.

Sec.  501.718  Conduct and order of hearings.

    All hearings shall be conducted in a fair, impartial, expeditious
and orderly manner. 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. The Director shall present his or her case-in-chief first. The
Director 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.

Sec.  501.719  Ex parte communications.

    (a) Prohibition.
    (1) From the time the Director issues an Order Instituting
Proceedings until the date of final decision, no party, interested
person, or representative thereof shall knowingly make or cause to be

made an ex parte communication.
    (2) Except to the extent required for the disposition of ex parte
communication matters as authorized by law, the Secretary's designee
and the Administrative Law Judge presiding over any proceeding may not:
    (i) consult a person or party on an issue, unless on notice and
opportunity for all parties to participate; or
    (ii) be responsible to or subject to the supervision, direction of,
or evaluation by, an employee engaged in the performance of
investigative or prosecutorial functions for the Department.
    (b) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by the Administrative Law Judge or the
Secretary's designee, the Administrative Law Judge or the Secretary's
designee, as appropriate, shall cause all of 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. A party may, not later than 10 days after the
date of service, file a response thereto and may recommend that the
person making the prohibited communication be sanctioned pursuant to
paragraph (c) of this section.
    (c) Sanctions. Any party to the proceeding, a party's
representative, or any other interested 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 or the Secretary's designee, as appropriate, for good cause
shown, including, but not limited to, exclusion from the hearing and an
adverse ruling on the issue that is the subject of the prohibited
communication.

Sec.  501.720  Separation of functions.

    Any officer or employee engaged in the performance of investigative
or prosecutorial functions for the Department in a proceeding as
defined in Sec.  501.702 may not, in that proceeding or one that is
factually related, participate or advise in the decision pursuant to
Section 557 of the Administrative Procedure Act, 5 U.S.C. 557, except
as a witness or counsel in the proceeding.

Sec.  501.721  Hearings to be public.

    All hearings, except hearings on applications for confidential
treatment filed pursuant to Sec.  501.725(b), shall be public unless
otherwise ordered by the Administrative Law Judge or the Secretary's
designee, as appropriate, on his or her own motion or the motion of a
party.

Sec.  501.722  Prehearing conferences.

    (a) Purposes of conferences. The purposes of prehearing conferences
include, but are not limited to:
    (1) Expediting the disposition of the proceeding;
    (2) Establishing early and continuing control of the proceeding by
the Administrative Law Judge; and
    (3) Improving the quality of the hearing through more thorough
preparation.
    (b) Procedure. On his or her own motion or at the request of a
party, the Administrative Law Judge may direct a representative or any
party to attend one or more prehearing conferences. Such conferences
may be held with or without the Administrative Law Judge present as the
Administrative Law Judge deems appropriate. Where such a conference is
held outside the presence of the Administrative Law Judge, the
Administrative Law Judge shall be advised promptly by the parties of
any agreements reached. Such conferences also may be held with one or
more persons participating by telephone or other remote means.
    (c) Subjects to be discussed. At a prehearing conference
consideration may be given and action taken with respect to the
following:
    (1) Simplification and clarification of the issues;
    (2) Exchange of witness and exhibit lists and copies of exhibits;
    (3) Admissions of fact and stipulations concerning the contents,
authenticity, or admissibility into evidence of documents;
    (4) Matters of which official notice may be taken;
    (5) The schedule for exchanging prehearing motions or briefs, if
any;
    (6) The method of service for papers;
    (7) Summary disposition of any or all issues;
    (8) Settlement of any or all issues;
    (9) Determination of hearing dates (when the Administrative Law
Judge is present);
    (10) Amendments to the Order Instituting Proceedings or answers
thereto;
    (11) Production of documents as set forth in Sec.  501.723, and
prehearing production of documents in response to subpoenas duces tecum
as set forth in Sec.  501.728; and
    (12) Such other matters as may aid in the orderly and expeditious
disposition of the proceeding.
    (d) Timing of conferences. Unless the Administrative Law Judge
orders otherwise, an initial prehearing conference shall be held not
later than 14 days after service of an answer. A final conference, if
any, should be held as close to the start of the hearing as reasonable
under the circumstances.
    (e) Prehearing orders. At or following the conclusion of any
conference held pursuant to this rule, the Administrative Law Judge
shall enter written rulings or orders that recite the agreement(s)
reached and any procedural determinations made by the Administrative
Law Judge.
    (f) Failure to appear: default. A respondent who fails to appear,
in person or through a representative, at a prehearing conference of
which he or she has been duly notified may be deemed in default
pursuant to Sec.  501.716(a). A respondent may make a motion to set
aside a default pursuant to Sec.  501.726(e).

Sec.  501.723  Prehearing disclosures; methods to discover additional
matter.

    (a) Initial disclosures. (1) Except to the extent otherwise
stipulated or directed by order of the Administrative Law Judge, a
party shall, without awaiting a discovery request, provide to the
opposing party:
    (i) The name and, if known, the address and telephone number of
each individual likely to have discoverable information that the
disclosing party may use to support its claims or defenses, unless
solely for impeachment of a witness appearing in person or by
deposition, identifying the subjects of the information; and
    (ii) A copy, or a description by category and location, of all
documents,

[[Page 53649]]

data compilations, and tangible things that are in the possession,
custody, or control of the party and that the disclosing party may use
to support its claims or defenses, unless solely for impeachment of a
witness appearing in person or by deposition;
    (2) The disclosures described in paragraph (a)(1)(i) of this
section shall be made not later than 30 days after the issuance of an
Order Instituting Proceedings, unless a different time is set by
stipulation or by order of the Administrative Law Judge.
    (b) Prehearing disclosures.
    (1) In addition to the disclosures required by paragraph (a) of
this section, a party must provide to the opposing party, and promptly
file with the Administrative Law Judge, the following information
regarding the evidence that it may present at hearing for any purpose
other than solely for impeachment of a witness appearing in person or
by deposition:
    (i) An outline or narrative summary of its case or defense (the
Order Instituting Proceedings will usually satisfy this requirement for
the Director and the answer thereto will usually satisfy this
requirement for the respondent);
    (ii) The legal theories upon which it will rely;
    (iii) Copies and a list of documents or exhibits that it intends to
introduce at the hearing; and
    (iv) A list identifying each witness who will testify on its
behalf, including the witness's name, occupation, address, phone
number, and a brief summary of the expected testimony.
    (2) Unless otherwise directed by the Administrative Law Judge, the
disclosures required by paragraph (b)(1) of this section shall be made
not later than 30 days before the date of the hearing.
    (c) Disclosure of expert testimony. A party who intends to call an
expert witness shall submit, in addition to the information required by
paragraph (b)(1)(iv) of this section, a statement of the expert's
qualifications, a list of other proceedings in which the expert has
given expert testimony, and a list of publications authored or co-
authored by the expert.
    (d) Form of disclosures. Unless the Administrative Law Judge orders
otherwise, all disclosures under paragraphs (a) through (c) of this
section shall be made in writing, signed, and served as provided in
Sec.  501.705.
    (e) Methods to discover additional matter. Parties may obtain
discovery by one or more of the following methods: Depositions of
witnesses upon oral examination or written questions; written
interrogatories to another party; 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 Department
of the Treasury or at the location where the Federal employee to be
deposed performs his or her duties, whichever the Federal employee's
supervisor or the Office of Chief Counsel shall deem appropriate. All
depositions shall be held at a date and time agreed by the Office of
Chief Counsel and the respondent or respondent's representative, and
for an agreed length of time.
    (f) Discovery scope and limits. Unless otherwise limited by order
of the Administrative Law Judge in accordance with paragraph (f)(2) of
this section, the scope of discovery is as follows:
    (1) In general. The availability of information and documents
through discovery is subject to the assertion of privileges available
to the parties and witnesses. Privileges available to the Director and
the Department include exemptions afforded 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). Parties may obtain discovery regarding any matter, not
privileged, that is relevant to the merits of the pending action,
including the existence, description, nature, custody, condition, and
location of any books, documents, or other tangible things and the
identity and location of any persons having knowledge of any
discoverable matter. For good cause, the Administrative Law Judge may
order discovery of any matter relevant to the subject matter involved
in the proceeding. Relevant information need not be admissible at the
hearing if the discovery appears reasonably calculated to lead to the
discovery of admissible evidence.
    (2) Limitations. The Administrative Law Judge may issue any order
that justice requires to ensure that discovery requests are not
unreasonable, oppressive, excessive in scope or unduly burdensome,
including an order to show cause why a particular discovery request is
justified upon motion of the objecting party. The frequency or extent
of use of the discovery methods otherwise permitted under this section
may be limited by the Administrative Law Judge if he or she determines
that:
    (i) The discovery sought is unreasonably cumulative or duplicative,
or is obtainable from some other source that is more convenient, less
burdensome, or less expensive;
    (ii) The party seeking discovery has had ample opportunity by
discovery in the action to obtain the information sought; or
    (iii) The burden or expense of the proposed discovery outweighs its
likely benefit, taking into account the needs of the hearing, the
importance of the issues at stake, and the importance of the proposed
discovery in resolving the issues.

    (3) Interrogatories. Respondent's interrogatories shall be served
upon the Office of the Chief Counsel not later than 30 days after
issuance of the Order Instituting Proceedings. The Director's
interrogatories shall be served by the later of 30 days after the
receipt of service of respondent's interrogatories or 40 days after
issuance of the Order Instituting Proceedings if no interrogatories are
filed by respondent. Parties shall respond to interrogatories not later
than 30 days after 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. The limitation on the number of questions in an interrogatory
may be waived by the Administrative Law Judge.
    (4) Privileged matter. Privileged documents are not discoverable.
Privileges include, but are not limited to, 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) or the Freedom
of Information Act (5 U.S.C. 552(b)(1) through (9)).
    (g) Updating discovery. A party who has made an initial disclosure
under paragraph (a) of this section or responded to a request for
discovery with a disclosure or response is under a duty to supplement
or correct the disclosure or response to include information thereafter
acquired whenever:
    (1) The party learns that in some material respect the information
disclosed is incomplete or incorrect, if the additional or corrective
information has not otherwise been made known to

[[Page 53650]]

the other party during the discovery process or in writing; or
    (2) Ordered by the Administrative Law Judge. The Administrative Law
Judge may impose sanctions for failure to supplement or correct
discovery.
    (h) Time limits. All discovery, including all responses to
discovery requests, shall be completed not later than 20 days prior to
the date scheduled for the commencement of the hearing, unless the
Administrative Law Judge finds on the record that good cause exists to
grant additional time to complete discovery.
    (i) Effect of failure to comply. No witness may testify and no
document or exhibit may be introduced at the hearing if such witness,
document, or exhibit is not listed in the prehearing submissions
pursuant to paragraphs (b) and (c) of this section, except for good
cause shown.

Sec.  501.724  Documents that may be withheld.

    (a) Notwithstanding Sec.  501.723(f), the Director or respondent
may withhold a document if:
    (1) The document is privileged;
    (2) The document would disclose the identity of a confidential
source; or
    (3) The Administrative Law Judge grants leave to withhold a
document or category of documents as not relevant to the subject matter
of the proceeding or otherwise, for good cause shown.
    (b) Nothing in paragraph (a) of this section authorizes the
Director to withhold documents that contain material exculpatory
evidence.
    (c) Withheld document list. The Director and respondent shall
provide the Administrative Law Judge, for review, a list of documents
withheld pursuant to paragraphs (a)(1)-(3) of this section. The
Administrative Law Judge shall determine whether any such document
should be made available for inspection and copying.

Sec.  501.725  Confidential treatment of information in certain
filings.

    (a) Filing document under seal.
    (1) The Director may file any document or any part of a document
under seal and/or seek a protective order concerning any document 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, as amended by Executive Order 13292, or other Executive orders
concerning disclosure of information, Department regulations, or the
Privacy Act, or information exempt from release under the Freedom of
Information Act. The Administrative Law Judge shall allow placement of
any such document under seal and/or grant a protective order upon a
showing that the disclosure would be inconsistent with any such statute
or Executive order, or that the harm resulting from disclosure would
outweigh the benefits of disclosure.
    (2) A respondent may file any document or any part of a document
under seal and/or seek a protective order to limit such document from
disclosure to other parties or to the public. The Administrative Law
Judge shall allow placement of any document under seal and/or grant a
protective order upon a showing that the harm resulting from disclosure
would outweigh the benefits of disclosure.
    (3) The Administrative Law Judge shall safeguard the security and
integrity of any documents under seal or protective order and shall
take all appropriate steps to preserve the confidentiality of such
documents or any parts thereof, including closing a hearing or portions
of a hearing to the public. Release of any information under seal or to
the extent inconsistent with a protective order, in any form or manner,
is subject to the sanctions and the exercise of the authorities as are
provided with respect to ex parte communications under Sec.  501.719.
    (4) If the Administrative Law Judge denies placement of any
document under seal or under protective order, any party, and any
person whose document or material is at issue, may obtain interlocutory
review by the Secretary's designee. In such cases the Administrative
Law Judge shall not release or expose any of the records or documents
in question to the public or to any person for a period of 20 days from
the date of the Administrative Law Judge's ruling, in order to permit a
party the opportunity either to withdraw the records and documents or
obtain interlocutory review by the Secretary's designee and an order
that the records be placed under seal or a protective order.
    (5) 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
submitting parties, except when it may be necessary to retain a record
until any judicial process is completed.
    (6)(i) Written notice of each request for release of documents or
materials under seal or subject to a protective order shall be given to
the parties at least 20 days prior to any permitted release or prior to
any access not specifically authorized under a protective order. A copy
of each request for information, including the name, address, and
telephone number of the requester, shall be provided to the parties.
    (ii) Each request for access to protected material shall include
the names, addresses, and telephone numbers of all persons on whose
behalf the requester seeks access to protected information. The
Administrative Law Judge may impose sanctions as provided under Sec.
501.729 for failure to provide this information.
    (b) Application. An application for a protective order or to place
under seal shall be filed with the Administrative Law Judge. The
application shall be accompanied by a sealed copy of the materials as
to which confidential treatment is sought.
    (1) Procedure for supplying additional information. The person
making the application may be required to furnish in writing additional
information with respect to the grounds for objection to public
disclosure. Failure to supply the information so requested within 14
days from the date of receipt of a notice of the information required
shall be deemed a waiver of the objection to public disclosure of that
portion of the information to which the additional information relates,
unless the Administrative Law Judge shall otherwise order for good
cause shown at or before the expiration of such 14-day period.
    (2) Confidentiality of materials pending final decision. Pending
the determination of the application for confidential treatment,
transcripts, non-final orders including an initial decision, if any,
and other materials in connection with the application shall be placed
under seal; shall be for the confidential use only of the
Administrative Law Judge, the Secretary's designee, the applicant, the
Director, and any other respondent and representative; and shall be
made available to the public only in accordance with orders of the
Administrative Law Judge or the Secretary's designee.
    (3) Public availability of orders. Any final order of the
Administrative Law Judge or the Secretary's designee denying or
sustaining an application for confidential treatment shall be made
public. Any prior findings or opinions relating to an application for
confidential treatment under this section shall be made public at such
time as the material as to which

[[Page 53651]]

confidentiality was requested is made public.

Sec.  501.726  Motions.

    (a) Generally. Unless made during a hearing or conference, a motion
shall be in writing, shall state with particularity the grounds
therefor, shall set forth the relief or order sought, and shall be
accompanied by a written brief of the points and authorities relied
upon. Motions by a respondent must be filed with the Administrative Law
Judge and served upon the Director through the Office of Chief Counsel
and with any other party respondent or respondent's representative,
unless otherwise directed by the Administrative Law Judge. Motions by
the Director must be filed with the Administrative Law Judge and served
upon each party respondent or respondent's representative. All written
motions must be served in accordance with, and otherwise meet the
requirements of, Sec.  501.705. The Administrative Law Judge may order
that an oral motion be submitted in writing. No oral argument shall be
heard on any motion unless the Administrative Law Judge otherwise
directs.
    (b) Opposing and reply briefs. Except as provided in Sec.
501.741(e), briefs in opposition to a motion shall be filed not later
than 15 days after service of the motion. Reply briefs shall be filed
not later than 3 days after service of the opposition. The failure of a
party to oppose a written motion or an oral motion made on the record
shall be deemed a waiver of objection by that party to the entry of an
order substantially in the form of any proposed order accompanying the
motion.
    (c) Dilatory motions. Frivolous, dilatory, or repetitive motions
are prohibited. The filing of such motions may form the basis for
sanctions.
    (d) Length limitation. Except as otherwise ordered by the
Administrative Law Judge, a brief in support of, or in opposition to, a
motion shall not exceed 15 pages, exclusive of pages containing any
table of contents, table of authorities, or addendum.
    (e) A motion to set aside a default shall be made within a
reasonable time as determined by the Administrative Law Judge, state
the reasons for the failure to appear or defend, and, if applicable,
specify the nature of the proposed defense in the proceeding. In order
to prevent injustice and on such conditions as may be appropriate, the
Administrative Law Judge, at any time prior to the filing of his or her
decision, or the Secretary's designee, at any time during the review
process, may for good cause shown set aside a default.

Sec.  501.727  Motion for summary disposition.

    (a) At any time after a respondent's answer has been filed, the
respondent or the Director may make a motion for summary disposition of
any or all allegations contained in the Order Instituting Proceedings.
If the Director has not completed presentation of his or her case-in-
chief, a motion for summary disposition shall be made only with
permission of the Administrative Law Judge. The facts of the pleadings
of the party against whom the motion is made shall be taken as true,
except as modified by stipulations or admissions made by that party, by
uncontested affidavits, or by facts officially noticed pursuant to
Sec.  501.732(b).
    (b) Decision on motion. The Administrative Law Judge may promptly
decide the motion for summary disposition or may defer decision on the
motion. The Administrative Law Judge shall issue an order granting a
motion for summary disposition if the record shows there is no genuine
issue with regard to any material fact and the party making the motion
is entitled to a summary disposition as a matter of law.
    (c) 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.

Sec.  501.728  Subpoenas.

    (a) Availability; procedure. In connection with any hearing before
an Administrative Law Judge, either the respondent or the Director may
request the issuance of subpoenas requiring the attendance and
testimony of witnesses at the designated time and place of hearing, and
subpoenas requiring the production of documentary or other tangible
evidence returnable at a designated time and place. Unless made on the
record at a hearing, requests for issuance of a subpoena shall be made
in writing and served on each party pursuant to Sec.  501.705.
    (b) Standards for issuance. If it appears to the Administrative Law
Judge that a subpoena sought may be unreasonable, oppressive, excessive
in scope, or unduly burdensome, he or she may, in his or her
discretion, as a condition precedent to the issuance of the subpoena,
require the person seeking the subpoena to show the general relevance
and reasonable scope of the testimony or other evidence sought. If
after consideration of all the circumstances, the Administrative Law
Judge determines that the subpoena or any of its terms is unreasonable,
oppressive, excessive in scope, or unduly burdensome, he or she may
refuse to issue the subpoena, or issue a modified subpoena as fairness
requires. In making the foregoing determination, the Administrative Law
Judge may inquire of the other participants whether they will stipulate
to the facts sought to be proved.
    (c) Service. Service of a subpoena shall be made pursuant to the
provisions of Sec.  501.705.
    (d) Application to quash or modify.
    (1) Procedure. Any person to whom a subpoena is directed or who is
an owner, creator or the subject of the documents or materials that are
to be produced pursuant to a subpoena may, prior to the time specified
therein for compliance, but not later than 15 days after the date of
service of such subpoena, request that the subpoena be quashed or
modified. Such request shall be made by application filed with the
Administrative Law Judge and served on all parties pursuant to Sec.
501.705. The party on whose behalf the subpoena was issued may, not
later than 5 days after service of the application, file an opposition
to the application.
    (2) Standards governing application to quash or modify. If the
Administrative Law Judge determines that compliance with the subpoena
would be unreasonable, oppressive or unduly burdensome, the
Administrative Law Judge may quash or modify the subpoena, or may order
return of the subpoena only upon specified conditions. These conditions
may include, but are not limited to, a requirement that the party on
whose behalf the subpoena was issued shall make reasonable compensation
to the person to whom the subpoena was addressed for the cost of
copying or

[[Page 53652]]

transporting evidence to the place for return of the subpoena.
    (e) Witness fees and mileage. Witnesses summoned to appear at a
proceeding shall be paid the same fees and mileage that are paid to
witnesses in the courts of the United States, and witnesses whose
depositions are taken and the persons taking the same shall severally
be entitled to the same fees as are paid for like services in the
courts of the United States. Witness fees and mileage shall be paid by
the party at whose instance the witnesses appear.

Sec.  501.729  Sanctions.

    (a) Contemptuous conduct.
    (1) Subject to exclusion or suspension. Contemptuous conduct by any
person before an Administrative Law Judge or the Secretary's designee
during any proceeding, including any conference, shall be grounds for
the Administrative Law Judge or the Secretary's designee to:
    (i) Exclude that person from such hearing or conference, or any
portion thereof; and/or
    (ii) If a representative, summarily suspend that person from
representing others in the proceeding in which such conduct occurred
for the duration, or any portion, of the proceeding.
    (2) Adjournment. Upon motion by a party represented by a
representative subject to an order of exclusion or suspension, an
adjournment shall be granted to allow the retention of a new
representative. In determining the length of an adjournment, the
Administrative Law Judge or the Secretary's designee shall consider, in
addition to the factors set forth in Sec.  501.737, the availability of
another representative for the party or, if the representative was a
counsel, of other members of a suspended counsel's firm.
    (b) Deficient filings; leave to cure deficiencies. The
Administrative Law Judge, or the Secretary's designee in the case of a
request for review, may in his or her discretion, reject, in whole or
in part, any filing that fails to comply with any requirements of this
subpart or of any order issued in the proceeding in which the filing
was made. Any such filings shall not be part of the record. The
Administrative Law Judge or the Secretary's designee may direct a party
to cure any deficiencies and to resubmit the filing within a fixed time
period.
    (c) Failure to make required filing or to cure deficient filing.
The Administrative Law Judge (or the Secretary's designee during review
proceedings) may enter a default pursuant to Sec.  501.716, dismiss the
case, decide the particular matter at issue against that person, or
prohibit the introduction of evidence or exclude testimony concerning
that matter if a person fails:
    (1) To make a filing required under this subpart; or
    (2) To cure a deficient filing within the time specified by the
Administrative Law Judge or the Secretary's designee pursuant to
paragraph (b) of this section.
    (d) Failure to make required filing or to cure deficient filing in
the case of a request for review. The Secretary's designee, in any case
of a request for review, may decide the issue against that person, or
prohibit the introduction of evidence or exclude testimony concerning
that matter if a person fails:
    (1) To make a filing required under this subpart; or
    (2) To cure a deficient filing within the time specified by the
Secretary's designee pursuant to paragraph (b) of this section.

Sec.  501.730  Depositions upon oral examination.

    (a) Procedure. Any party desiring to take the testimony of a
witness by deposition shall make a written motion setting forth the
reasons why such deposition should be taken including the specific
reasons why the party believes the witness may be unable to attend or
testify at the hearing; the name and address of the prospective
witness; the matters concerning which the prospective witness is
expected to be questioned; and the proposed time and place for the
taking of the deposition.
    (b) Required finding when ordering a deposition. In the discretion
of the Administrative Law Judge, an order for deposition may be issued
upon a finding that the prospective witness will likely give testimony
material to the proceeding, that it is likely the prospective witness
will be unable to attend or testify at the hearing because of age,
sickness, infirmity, imprisonment or other disability, and that the
taking of a deposition will serve the interests of justice.
    (c) Contents of order. An order for deposition shall designate by
name a deposition officer. The designated officer may be the
Administrative Law Judge or any other person authorized to administer
oaths by the laws of the United States or of the place where the
deposition is to be held. An order for deposition also shall state:
    (1) The name of the witness whose deposition is to be taken;
    (2) The scope of the testimony to be taken;
    (3) The time and place of the deposition;
    (4) The manner of recording, preserving and filing the deposition;
and
    (5) The number of copies, if any, of the deposition and exhibits to
be filed upon completion of the deposition.
    (d) Procedure at depositions. A witness whose testimony is taken by
deposition shall swear or affirm before any questions are put to him or
her. Examination and cross-examination of witnesses may proceed as
permitted at a hearing. A witness being deposed may have counsel or a
representative present during the deposition.
    (e) Objections to questions or evidence. Objections to questions or
evidence shall be in short form, stating the grounds of objection
relied upon. Objections to questions or evidence shall be noted by the
deposition officer upon the deposition, but a deposition officer (other
than an Administrative Law Judge) shall not have the power to decide on
the competency, materiality or relevance of evidence. Failure to object
to questions or evidence before the deposition officer shall not be
deemed a waiver unless the ground of the objection is one that might
have been obviated or removed if presented at that time.
    (f) Filing of depositions. The questions asked and all answers or
objections shall be recorded or transcribed verbatim, and a transcript
shall be prepared by the deposition officer, or under his or her
direction. The transcript shall be subscribed by the witness and
certified by the deposition officer. The original deposition transcript
and exhibits shall be filed with the Administrative Law Judge. A copy
of the deposition transcript and exhibits shall be served on the
opposing party or parties. The cost of the transcript (including
copies) shall be paid by the party requesting the deposition.

Sec.  501.731  Depositions upon written questions.

    (a) Availability. Depositions may be taken and submitted on written
questions upon motion of any party. The motion shall include the
information specified in Sec.  501.730(a). A decision on the motion
shall be governed by Sec.  501.730(b).
    (b) Procedure. Written questions shall be filed with the motion.
Not later than 10 days after service of the motion and written
questions, any party may file objections to such written questions and
any party may file cross-questions. When a deposition is taken pursuant
to this section no persons other than the witness, representative or
counsel to the witness, the deposition officer, and, if the deposition
officer does not act as reporter, a reporter, shall be present at the
examination of the witness. No party

[[Page 53653]]

shall be present or represented unless otherwise permitted by order.
The deposition officer shall propound the questions and cross-questions
to the witness in the order submitted.
    (c) Additional requirements. The order for deposition, filing of
the deposition, form of the deposition and use of the deposition in the
record shall be governed by paragraphs (b) through (g) of Sec.
501.730, except that no cross-examination shall be made.

Sec.  501.732  Evidence.

    The applicable evidentiary standard for proceedings under this
subpart is proof by a preponderance of reliable, probative, and
substantial evidence. The Administrative Law Judge shall admit any
relevant and material oral, documentary, or demonstrative evidence. The
Federal Rules of Evidence do not apply, by their own force, to
proceedings under this subpart, but shall be employed as general
guidelines. The fact that evidence submitted by a party is hearsay goes
only to the weight of the evidence and does not affect its
admissibility.
    (a) Objections and offers of proof.
    (1) Objections. Objections to the admission or exclusion of
evidence must be made on the record and shall be in short form, stating
the grounds relied upon. Exceptions to any ruling thereon by the
Administrative Law Judge need not be noted at the time of the ruling.
Such exceptions will be deemed waived on review by the Secretary's
designee, however, unless raised:
    (i) Pursuant to interlocutory review in accordance with Sec.
501.741;
    (ii) In a proposed finding or conclusion filed pursuant to Sec.
501.738; or
    (iii) In a petition for the Secretary's designee's review of an
Administrative Law Judge's decision filed in accordance with Sec.
501.741.
    (2) Offers of proof. Whenever evidence is excluded from the record,
the party offering such evidence may make an offer of proof, which
shall be included in the record. Excluded material shall be retained
pursuant to Sec.  501.739(b).
    (b) Official notice. An Administrative Law Judge or Secretary's
designee may take official notice of any material fact that might be
judicially noticed by a district court of the United States, any matter
in the public official records of the Secretary, or any matter that is
particularly within the knowledge of the Department as an expert body.
If official notice is requested or taken of a material fact not
appearing in the evidence in the record, a party, upon timely request
to the Administrative Law Judge, shall be afforded an opportunity to
establish the contrary.
    (c) Stipulations. The parties may, by stipulation, at any stage of
the proceeding agree upon any pertinent fact in the proceeding. A
stipulation may be received in evidence and, when accepted by the
Administrative Law Judge, shall be binding on the parties to the
stipulation.
    (d) Presentation under oath or affirmation. A witness at a hearing
for the purpose of taking evidence shall testify under oath or
affirmation.
    (e) Presentation, rebuttal and cross-examination. A party is
entitled to present its case or defense by oral or documentary
evidence, to submit rebuttal evidence, and to conduct such cross-
examination as, in the discretion of the Administrative Law Judge, may
be required for a full and true disclosure of the facts.

Sec.  501.733  Evidence: confidential information, protective orders.

    (a) Procedure. In any proceeding as defined in Sec.  501.702, a
respondent; the Director; any person who is the owner, subject or
creator of a document subject to subpoena or which may be introduced as
evidence; or any witness who testifies at a hearing may file a motion
requesting a protective order to limit from disclosure to other parties
or to the public documents or testimony containing confidential
information. The motion should include a general summary or extract of
the documents without revealing confidential details. If a person seeks
a protective order against disclosure to other parties as well as the
public, copies of the documents shall not be served on other parties.
Unless the documents are unavailable, the person shall file for
inspection by the Administrative Law Judge a sealed copy of the
documents as to which the order is sought.
    (b) Basis for issuance. Documents and testimony introduced in a
public hearing are presumed to be public. A motion for a protective
order shall be granted only upon a finding that the harm resulting from
disclosure would outweigh the benefits of disclosure.
    (c) Requests for additional information supporting confidentiality.
A person seeking a protective order under paragraph (a) of this section
may be required to furnish in writing additional information with
respect to the grounds for confidentiality. Failure to supply the
information so requested not later than 5 days from the date of receipt
by the person of a notice of the information required shall be deemed a
waiver of the objection to public disclosure of that portion of the
documents to which the additional information relates, unless the
Administrative Law Judge shall otherwise order for good cause shown at
or before the expiration of such 5-day period.
    (d) Confidentiality of documents pending decision. Pending a
determination of a motion under this section, the documents as to which
confidential treatment is sought and any other documents that would
reveal the confidential information in those documents shall be
maintained under seal and shall be disclosed only in accordance with
orders of the Administrative Law Judge. Any order issued in connection
with a motion under this section shall be made public unless the order
would disclose information as to which a protective order has been
granted, in which case that portion of the order that would reveal the
protected information shall not be made public.

Sec.  501.734  Introducing prior sworn statements of witnesses into the
record.

    (a) At a hearing, any person wishing to introduce a prior, sworn
statement of a witness who is not a party to the proceeding, that is
otherwise admissible in the proceeding, may make a motion setting forth
the reasons therefor. If only part of a statement is offered in
evidence, the Administrative Law Judge may require that all relevant
portions of the statement be introduced. If all of a statement is
offered in evidence, the Administrative Law Judge may require that
portions not relevant to the proceeding be excluded. A motion to
introduce a prior sworn statement may be granted if:
    (1) The witness is dead;
    (2) The witness is out of the United States, unless it appears that
the absence of the witness was procured by the party offering the prior
sworn statement;
    (3) The witness is unable to attend or testify because of age,
sickness, infirmity, imprisonment or other disability;
    (4) The party offering the prior sworn statement has been unable to
procure the attendance of the witness by subpoena; or,
    (5) In the discretion of the Administrative Law Judge, it would be
desirable, in the interests of justice, to allow the prior sworn
statement to be used. In making this determination, due regard shall be
given to the presumption that witnesses will testify orally in an open
hearing. If the parties have stipulated to accept a prior sworn
statement in lieu of live testimony, consideration shall also be given
to the

[[Page 53654]]

convenience of the parties in avoiding unnecessary expense.

Sec.  501.735  Proposed findings, conclusions and supporting briefs.

    (a) Opportunity to file. Before a decision is issued by the
Administrative Law Judge, each party shall have an opportunity,
reasonable in light of all the circumstances, to file in writing
proposed findings and conclusions.
    (b) Procedure. Proposed findings of fact must be supported by
citations to specific portions of the record. If successive filings are
directed, the proposed findings and conclusions of the party assigned
to file first shall be set forth in serially numbered paragraphs, and
any counter statement of proposed findings and conclusions shall, in
addition to any other matter presented, indicate those paragraphs of
the proposals already filed as to which there is no dispute. A reply
brief may be filed by the party assigned to file first, or, where
simultaneous filings are directed, reply briefs may be filed by each
party, within the period prescribed therefor by the Administrative Law
Judge. No further briefs may be filed except with permission of the
Administrative Law Judge.
    (c) Time for filing. In any proceeding in which a decision is to be
issued:
    (1) At the close of each hearing, the Administrative Law Judge
shall, by order, after consultation with the parties, prescribe the
period within which proposed findings and conclusions and supporting
briefs are to be filed. The party directed to file first shall make its
initial filing not later than 30 days after the end of the hearing
unless the Administrative Law Judge, for good cause shown, permits a
different period and sets forth in the order the reasons why the
different period is necessary.
    (2) The total period within which all such proposed findings and
conclusions and supporting briefs and any counter statements of
proposed findings and conclusions and reply briefs are to be filed
shall be no longer than 90 days after the close of the hearing unless
the Administrative Law Judge, for good cause shown, permits a different
period and sets forth in an order the reasons why the different period
is necessary.

Sec.  501.736  Authority of Administrative Law Judge.

    The Administrative Law Judge shall have authority to do all things
necessary and appropriate to discharge his or her duties. No provision
of these rules shall be construed to limit the powers of the
Administrative Law Judge provided by the Administrative Procedure Act,
5 U.S.C. 556, 557. The powers of the Administrative Law Judge include,
but are not limited to:
    (a) Administering oaths and affirmations;
    (b) Issuing subpoenas authorized by law and revoking, quashing, or
modifying any such subpoena;
    (c) Receiving relevant evidence and ruling upon the admission of
evidence and offers of proof;
    (d) Regulating the course of a proceeding and the conduct of the
parties and their representatives;
    (e) Holding prehearing and other conferences as set forth in Sec.
501.726 and requiring the attendance at any such conference of at least
one representative of each party who has authority to negotiate
concerning the resolution of issues in controversy;
    (f) Subject to any limitations set forth elsewhere in this subpart,
considering and ruling on all procedural and other motions;
    (g) Upon notice to all parties, reopening any hearing prior to the
issuance of a decision;
    (h) Requiring production of records or any information relevant to
any act or transaction subject to a hearing under this subpart, and
imposing 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;
    (i) Establishing time, place, and manner limitations on the
attendance of the public and the media for any hearing; and
    (j) Setting fees and expenses for witnesses, including expert
witnesses.

Sec.  501.737  Adjustments of time, postponements and adjournments.

    (a) Availability. Except as otherwise provided by law, the
Administrative Law Judge or the Secretary's designee, as appropriate,
at any time prior to the filing of his or her decision, may, for good
cause and in the interest of justice, modify any time limit prescribed
by this subpart and may, consistent with paragraph (b) of this section,
postpone or adjourn any hearing.
    (b) Limitations on postponements, adjournments and adjustments. A
hearing shall begin at the time and place ordered, provided that,
within the limits provided, the Administrative Law Judge or the
Secretary's designee, as appropriate, may for good cause shown postpone
the commencement of the hearing or adjourn a convened hearing for a
reasonable period of time.
    (1) Additional considerations. In considering a motion for
postponement of the start of a hearing, adjournment once a hearing has
begun, or extensions of time for filing papers, the Administrative Law
Judge or the Secretary's designee, as appropriate, shall consider, in
addition to any other factors:
    (i) The length of the proceeding to date;
    (ii) The number of postponements, adjournments or extensions
already granted;
    (iii) The stage of the proceedings at the time of the request; and
    (iv) Any other matter as justice may require.
    (2) Time limit. Postponements, adjournments or extensions of time
for filing papers shall not exceed 21 days unless the Administrative
Law Judge or the Secretary's designee, as appropriate, states on the
record or sets forth in a written order the reasons why a longer period
of time is necessary.

Sec.  501.738  Disqualification and withdrawal of Administrative Law
Judge.

    (a) Notice of disqualification. If at any time an Administrative
Law Judge or Secretary's designee believes himself or herself to be
disqualified from considering a matter, the Administrative Law Judge or
Secretary's designee, as appropriate, shall issue a notice stating that
he or she is withdrawing from the matter and setting forth the reasons
therefor.
    (b) Motion for Withdrawal. Any party who has a reasonable, good
faith basis to believe an Administrative Law Judge or Secretary's
designee has a personal bias, or is otherwise disqualified from hearing
a case, may make a motion to the Administrative Law Judge or
Secretary's designee, as appropriate, that the Administrative Law Judge
or Secretary's designee withdraw. The motion shall be accompanied by a
statement subject to 18 U.S.C. 1001 setting forth in detail the facts
alleged to constitute grounds for disqualification. If the
Administrative Law Judge or Secretary's designee finds himself or
herself qualified, he or she shall so rule and shall continue to
preside over the proceeding.

Sec.  501.739  Record in proceedings before Administrative Law Judge;
retention of documents; copies.

    (a) Recordation. Unless otherwise ordered by the Administrative Law
Judge, all hearings shall be recorded and a written transcript thereof
shall be prepared.
    (1) Availability of a transcript. Transcripts of hearings shall be
available for purchase.
    (2) Transcript correction. Prior to the filing of post-hearing
briefs or proposed findings and conclusions, or within

[[Page 53655]]

such earlier time as directed by the Administrative Law Judge, a party
or witness may make a motion to correct the transcript. Proposed
corrections of the transcript may be submitted to the Administrative
Law Judge by stipulation pursuant to Sec.  501.732(c), or by motion.
Upon notice to all parties to the proceeding, the Administrative Law
Judge may, by order, specify corrections to the transcript.
    (b) Contents of the record. The record of each hearing shall
consist of:
    (1) The Order Instituting Proceedings, Answer to Order Instituting
Proceedings, Notice of Hearing and any amendments thereto;
    (2) Each application, motion, submission or other paper, and any
amendments, motions, objections, and exceptions to or regarding them;
    (3) Each stipulation, transcript of testimony, interrogatory,
deposition, and document or other item admitted into evidence;
    (4) With respect to a request to disqualify an Administrative Law
Judge or to allow the Administrative Law Judge's withdrawal under Sec.
501.738, each affidavit or transcript of testimony taken and the
decision made in connection with the request;
    (5) All proposed findings and conclusions;
    (6) Each written order issued by the Administrative Law Judge; and
    (7) Any other document or item accepted into the record by the
Administrative Law Judge.
    (c) Retention of documents not admitted. Any document offered as
evidence but excluded, and any document marked for identification but
not offered as an exhibit, shall not be part of the record. The
Administrative Law Judge shall retain any such document until the later
of the date the proceeding becomes final, or the date any judicial
review of the final proceeding is no longer available.
    (d) Substitution of copies. A true copy of a document may be
substituted for any document in the record or any document retained
pursuant to paragraph (c) of this section.

Sec.  501.740  Decision of Administrative Law Judge.

    The Administrative Law Judge shall prepare a decision that
constitutes his or her final disposition of the proceedings.
    (a) Content. (1) The Administrative Law Judge shall determine
whether or not the respondent has violated any provision of parts 500
and 515 of this chapter or the provisions of any license, ruling,
regulation, order, direction or instruction issued by or under the
authority of the Secretary pursuant to part 500 or 515 of this chapter
or otherwise under the Trading with the Enemy Act.
    (2) The Administrative Law Judge's decision shall include findings
and conclusions, and the reasons or basis therefor, as to all the
material issues of fact, law or discretion presented on the record.
    (3) (i) Upon a finding of violation, the Administrative Law Judge
shall award an appropriate monetary civil penalty in an amount
consistent with the Penalty Guidelines published by the Director.
    (ii) Notwithstanding paragraph (a)(3)(i) of this section, the
Administrative Law Judge:
    (A) Shall provide an opportunity for a respondent to assert his or
her inability to pay a penalty, or financial hardship, by filing with
the Administrative Law Judge a financial disclosure statement subject
to 18 U.S.C. 1001 that sets forth in detail the basis for the financial
hardship or the inability to pay; and
    (B) Shall consider any such filing in determining the appropriate
monetary civil penalty.
    (b) Administrative Law Judge's decision.
    (1) Service. The Administrative Law Judge shall serve his or her
decision on the respondent and on the Director through the Office of
Chief Counsel, and shall file a copy of the decision with the
Secretary's designee.
    (2) Filing of report with the Secretary's designee. If the
respondent or Director files a petition for review pursuant to Sec.
501.741, or upon a request from the Secretary's designee, the
Administrative Law Judge shall file his or her report with the
Secretary's designee not later than 20 days after service of his or her
decision on the parties. The report shall consist of the record,
including the Administrative Law Judge's decision, and any petition
from the respondent or the Director seeking review.
    (3) Correction of errors. Until the Administrative Law Judge's
report has been directed for review by the Secretary's designee or, in
the absence of a direction for review, until the decision has become a
final order, the Administrative Law Judge may correct clerical errors
and errors arising through oversight or inadvertence in decisions,
orders, or other parts of the record.
    (c) Administrative Law Judge's decision final unless review
directed. Unless the Secretary's designee determines to review a
decision in accordance with Sec.  501.741(a)(1), the decision of the
Administrative Law Judge shall become the final decision of the
Department.
    (d) Penalty awarded. The Director is charged with implementing all
final decisions of the Department and, upon a finding of violation and/
or award of a civil monetary penalty, shall carry out the necessary
steps to close the action.

Sec.  501.741  Review of decision or ruling.

    (a) Availability. (1)(i) Review of the decision of the
Administrative Law Judge by the Secretary's designee is not a right.
The Secretary's designee may, in his or her discretion, review the
decision of the Administrative Law Judge on the petition of either the
respondent or the Director, or upon his or her own motion. The
Secretary's designee shall determine whether to review a decision:
    (A) If a petition for review has been filed by the respondent or
the Director, not later than 30 days after that date the Administrative
Law Judge filed his or her report with the Secretary's designee
pursuant to paragraph (b)(2) of this section; or
    (B) If no petition for review has been filed by the respondent or
the Director, not later than 40 days after the date the Administrative
Law Judge filed his or her decision with the Secretary's designee
pursuant to paragraph (b)(1) of this section.
    (ii) In determining whether to review a decision upon petition of
the respondent or the Director, the Secretary's designee shall consider
whether the petition for review makes a reasonable showing that:
    (A) a prejudicial error was committed in the conduct of the
proceeding; or
    (B) the decision embodies:
    (1) a finding or conclusion of material fact that is clearly
erroneous;
    (2) a conclusion of law that is erroneous; or
    (3) an exercise of discretion or decision of law or policy that is
important and that the Secretary's designee should review.
    (2) Interlocutory review of ruling. The Secretary's designee shall
review any ruling of an Administrative Law Judge involving privileged
or confidential material that is the subject of a petition for review.
See Sec.  501.725.
    (b) Filing. Either the respondent or the Director, when adversely
affected or aggrieved by the decision or ruling of the Administrative
Law Judge, may seek review by the Secretary's designee by filing a
petition for review. Any petition for review shall be filed with the
Administrative Law Judge within 10 days after service of the
Administrative Law Judge's decision or the issuance of a ruling
involving privileged or confidential material.

[[Page 53656]]

    (c) Contents. The petition shall state why the Secretary's designee
should review the Administrative Law Judge's decision or ruling,
including: Whether the Administrative Law Judge's decision or ruling
raises an important question of law, policy or discretion; whether
review by the Secretary's designee will resolve a question about which
the Department's Administrative Law Judges have rendered differing
opinions; whether the Administrative Law Judge's decision or ruling is
contrary to law or Department precedent; whether a finding of material
fact is not supported by a preponderance of the evidence; or whether a
prejudicial error of procedure or an abuse of discretion was committed.
A petition should concisely state the portions of the decision or
ruling for which review is sought. A petition shall not incorporate by
reference a brief or legal memorandum.
    (d) When filing effective. A petition for review is filed when
received by the Administrative Law Judge.
    (e) Statements in opposition to petition. Not later than 8 days
after the filing of a petition for review, either the respondent or the
Director may file a statement in opposition to a petition. A statement
in opposition to a petition for review shall be filed in the manner
specified in this section for filing of petitions for review.
Statements in opposition shall concisely state why the Administrative
Law Judge's decision or ruling should not be reviewed with respect to
each portion of the petition to which it is addressed.
    (f) Number of copies. An original and three copies of a petition or
a statement in opposition to a petition shall be filed with the
Administrative Law Judge.
    (g) Prerequisite to judicial review. Pursuant to section 704 of the
Administrative Procedure Act, 5 U.S.C. 704, a petition for review by
the Secretary's designee of an Administrative Law Judge decision or
ruling is a prerequisite to the seeking of judicial review of a final
order entered pursuant to such decision or ruling.

Sec.  501.742  Secretary's designee's consideration of decisions by
Administrative Law Judges.

    (a) Scope of review. The Secretary's designee may affirm, reverse,
modify, set aside or remand for further proceedings, in whole or in
part, a decision or ruling by an Administrative Law Judge and may make
any findings or conclusions that in his or her judgment are proper and
on the basis of the record and such additional evidence as the
Secretary's designee may receive in his or her discretion.
    (b) Summary affirmance. The Secretary's designee may summarily
affirm an Administrative Law Judge's decision or ruling based upon the
petition for review and any response thereto, without further briefing,
if he or she finds that no issue raised in the petition for review
warrants further consideration.

Sec.  501.743  Briefs filed with the Secretary's designee.

    (a) Briefing schedule order. If review of a determination is
mandated by judicial order or whenever the Secretary's designee reviews
a decision or ruling, the Secretary's designee shall, unless such
review results in summary affirmance pursuant to Sec.  501.742(b),
issue a briefing schedule order directing the parties to file opening
briefs and specifying particular issues, if any, as to which briefing
should be limited or directed. Unless otherwise provided, opening
briefs shall be filed not later than 40 days after the date of the
briefing schedule order. Opposition briefs shall be filed not later
than 30 days after the date opening briefs are due. Reply briefs shall
be filed not later than 14 days after the date opposition briefs are
due. No briefs in addition to those specified in the briefing schedule
order may be filed without permission of the Secretary's designee. The
briefing schedule order shall be issued not later than 21 days after
the later of:
    (1) The last day permitted for filing a brief in opposition to a
petition for review pursuant to Sec.  501.741(e); or
    (2) Receipt by the Secretary's designee of the mandate of a court
with respect to a judicial remand.
    (b) Contents of briefs. Briefs shall be confined to the particular
matters at issue. Each exception to the findings or conclusions being
reviewed shall be stated succinctly. Exceptions shall be supported by
citation to the relevant portions of the record, including references
to the specific pages relied upon, and by concise argument including
citation of such statutes, decisions and other authorities as may be
relevant. If the exception relates to the admission or exclusion of
evidence, the substance of the evidence admitted or excluded shall be
set forth in the brief, in an appendix thereto, or by citation to the
record. If the exception relates to interlocutory review, there is no
requirement to reference pages of the transcript. Reply briefs shall be
confined to matters in opposition briefs of other parties.
    (c) Length limitation. Opening and opposition briefs shall not
exceed 30 pages and reply briefs shall not exceed 20 pages, exclusive
of pages containing the table of contents, table of authorities, and
any addendum, except with permission of the Secretary's designee.

Sec.  501.744  Record before the Secretary's designee.

    The Secretary's designee shall determine each matter on the basis
of the record and such additional evidence as the Secretary's designee
may receive in his or her discretion. In any case of interlocutory
review, the Administrative Law Judge shall direct that a transcript of
the relevant proceedings be prepared and forwarded to the Secretary's
designee.
    (a) Contents of the record. In proceedings for final decision
before the Secretary's designee the record shall consist of:
    (1) All items that are part of the record in accordance with Sec.
501.739;
    (2) Any petitions for review, cross-petitions or oppositions;
    (3) All briefs, motions, submissions and other papers filed on
appeal or review; and
    (4) Any other material of which the Secretary's designee may take
administrative notice.
    (b) Review of documents not admitted. Any document offered in
evidence but excluded by the Administrative Law Judge and any document
marked for identification but not offered as an exhibit shall not be
considered a part of the record before the Secretary's designee on
review but shall be transmitted to the Secretary's designee if he or
she so requests. In the event that the Secretary's designee does not
request the document, the Administrative Law Judge shall retain the
document not admitted into the record until the later of:
    (1) The date upon which the Secretary's designee's order becomes
final; or
    (2) The conclusion of any judicial review of that order.

Sec.  501.745  Orders and decisions: signature, date and public

availability.

    (a) Signature required. All orders and decisions of the
Administrative Law Judge or Secretary's designee shall be signed.
    (b) Date of entry of orders. The date of entry of an order by the
Administrative Law Judge or Secretary's designee shall be the date the
order is signed. Such date shall be reflected in the caption of the
order, or if there is no caption, in the order itself.
    (c) Public availability of orders. (1) In general, any final order
of the Department shall be made public. Any supporting findings or
opinions relating

[[Page 53657]]

to a final order shall be made public at such time as the final order
is made public.
    (2) Exception. Any final order of the Administrative Law Judge or
Secretary's designee pertaining to an application for confidential
treatment shall only be available to the public in accordance with
Sec.  501.725(b)(3).

Sec.  501.746  Referral to United States Department of Justice;
administrative collection measures.

    In the event that the respondent does not pay any 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.

Sec.  501.747  Procedures on remand of decisions.

    Either an Administrative Law Judge or a Secretary's designee, as
appropriate, shall reconsider any Department decision on judicial
remand to the Department. The rules of practice contained in this
subpart shall apply to all proceedings held on judicial remand.

PART 505--REGULATIONS PROHIBITING TRANSACTIONS INVOLVING THE
SHIPMENT OF CERTAIN MERCHANDISE BETWEEN FOREIGN COUNTRIES

0
1. The authority for part 505 continues to read:

    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.

0
2. Section 505.30 is amended by adding the following sentences at the
end of the section:

Sec.  505.30  Licenses

    * * * For provisions relating to licensing procedures, see part
501, subpart E, of this chapter. Licensing actions taken pursuant to
part 501 of this chapter with respect to the prohibitions contained in
this part are considered actions taken pursuant to this part.

Sec.  505.50  [Amended]

0
3. Section 505.50 is amended by revising the reference ``subpart G of
part 500'' to read ``part 501, subpart D,''.

Sec.  505.60  [Amended]

0
4. Section 505.60 is amended by revising the reference ``Sec.  500.802
and subpart D of part 501'' to read ``part 501, subpart E,''.

PART 515--CUBAN ASSETS CONTROL REGULATIONS

0
1. The authority for part 515 continues to read:

    Authority: 18 U.S.C. 2332d; 22 U.S.C. 2370(a), 6001-6010; 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); Pub. L. 106-387, 114 Stat. 1549; E.O. 9193, 7
FR 5205, 3 CFR, 1938-1943 Comp., p. 1147; 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.

0
2. Section 515.501 is added to Subpart E to read as follows:

Sec.  515.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart G--Penalties

0
3. Section 515.701 is revised to read as follows:

Sec.  515.701  Penalties.

    For provisions relating to penalties, see part 501, subpart D, of
this chapter.

Sec. Sec.  515.702-515.718  [Removed]

0
4. Sections 515.702--515.718 are removed from subpart G.

Subpart H--Procedures

Sec.  515.801  [Amended]

0
5. Section 515.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 535--IRANIAN ASSETS CONTROL REGULATIONS

0
1. The authority for Part 535 continues to read:

    Authority: 18 U.S.C. 2332d; 28 U.S.C. 2461; 31 U.S.C. 321(b); 50
U.S.C. 1701-1706; E.O. 12170, 44 FR 65729, 3 CFR 1979 Comp., p. 457;
E.O. 12205, 45 FR 24099, 3 CFR 1980 Comp., p. 248; E.O. 12211, 45 FR
26685, 3 CFR 1980 Comp., p. 253; E.O. 12276, 46 FR 7913, 3 CFR 1981
Comp., p. 104; E.O. 12279, 46 FR 7919, 3 CFR 1981 Comp., p. 109;
E.O. 12280, 46 FR 7921, 3 CFR 1981 Comp., p. 110; E.O. 12281, 46 FR
7923, 3 CFR 1981 Comp., p. 110; E.O. 12282, 46 FR 7925, 3 CFR 1981
Comp., p. 113; E.O. 12283, 46 FR 7927, 3 CFR 1981 Comp., p. 114; and
E.O. 12294, 46 FR 14111, 3 CFR 1981 Comp., p. 139.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 535.501 is added to Subpart E to read as follows:

Sec.  535.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  535.801  [Amended]

0
3. Section 515.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 536--NARCOTICS TRAFFICKING SANCTIONS REGULATIONS

0
1. The authority for part 536 is revised to read:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1641,
1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note);
E.O. 12978, 60 FR 54579, 3 CFR, 1995 Comp., p. 415; E.O. 13224, 66
FR 49079, 3 CFR, 2001 Comp., p. 786; E.O. 13286, 68 FR 10619, March
5, 2003.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 536.100 is added to subpart E to read as follows:

Sec.  536.100  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  536.801  [Amended]

0
3. Section 536.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 537--BURMESE SANCTIONS REGULATIONS

0
1. The authority for part 537 is revised to read:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651,
1701-1706; sec 570, Pub. L. 104-208, 110 stat. 3009-166; Pub. L.
108-61; E.O. 13047, 61 FR 28301, 3 CFR, Comp., p. 202; E.O. 13310,
68 FR 44853, July 28, 2003.

[[Page 53658]]

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 537.501 is revised to read as follows:

Sec.  537.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

0
3. Section 537.801 is revised to read as follows:

Sec.  537.801  Procedures.

    For license application procedures and procedures relating to
amendments, modifications, or revocations of licenses; administrative
decisions; rulemaking; and requests for documents pursuant to the
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see
part 501, subpart E, of this chapter.

PART 538--SUDANESE SANCTIONS REGULATIONS

0
1. The authority for part 538 continues to read as follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 18 U.S.C. 2339B,
2332d; 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 106-387, 114 Stat.
1549; E.O. 13067, 62 FR 59989, 3 CFR, 1997 Comp., p. 230.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 538.500 is added to subpart E to read as follows:

Sec.  538.500  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  538.801  [Amended]

0
3. Section 538.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 539--WEAPONS OF MASS DESTRUCTION TRADE CONTROL REGULATIONS

0
1. The authority for part 539 continues to read as follows:

    Authority: 3 U.S.C. 301; 22 U.S.C. 2751-2799aa-2; 31 U.S.C.
321(b); 50 U.S.C. 1601-1651, 1701-1706; E.O. 12938, 59 FR 59099, 3
CFR, 1994 Comp., p. 950; E.O. 13094, 63 FR 40803, 3 CFR, 1998 Comp.,
p. 200.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

Sec.  539.501  [Amended]

0
2. Section 539.501 is amended by revising the reference ``subpart D''
to read ``subpart E''.

Subpart H--Procedures

Sec.  539.801  [Amended]

    3. Section 539.801 is amended by revising the reference ``subpart
D'' to read ``subpart E''.

PART 540--HIGHLY ENRICHED URANIUM (HEU) AGREEMENT ASSETS CONTROL
REGULATIONS

0
1. The authority for part 540 continues to read as follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651,
1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note);
E.O. 13159, 65 FR 39279, 3 CFR, Comp., p. 277.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

    2. Section 540.500 is added to subpart E to read as follows:

Sec.  540.500  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  540.801  [Amended]

0
3. Section 540.801 is amended by revising the reference ``subpart D''
to read ``subpart E''.

PART 545--TALIBAN (AFGHANISTAN) SANCTIONS REGULATIONS

0
1. The authority for part 545 continues to read as follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651,
1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note);
E.O. 13129, 64 FR 36759, 3 CFR, 1999 Comp., p. 200.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 545.500 is added to subpart E to read as follows:

Sec.  545.500  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  545.801  [Amended]

0
3. Section 545.801 is amended by revising the reference ``subpart D''
to read ``subpart E''.

PART 550--LIBYAN SANCTIONS REGULATIONS

0
1. The authority for part 550 continues to read as follows:

    Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C. 287c,
2349aa-8 and 2349aa-9; 31 U.S.C. 321(b0; 49 U.S.C. 40106(b); 50
U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28
U.S.C. 2461 note); Pub. L. 106-387, 114 Stat. 1549; E.O. 12543, 51
FR 875, 3 CFR, 1986 Comp., p. 181; E.O. 12544, 51 FR 1235, 3 CFR,
1986 Comp., p. 183; E.O. 12801, 57 FR 14319, 3 CFR, 1992 Comp., p.
294.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 550.500 is added to subpart E to read as follows:

Sec.  550.500  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  550.801  [Amended]

0
3. Section 550.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 560--IRANIAN TRANSACTIONS REGULATIONS

0
1. The authority for part 560 continues to read as follows:

    Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C.
2349aa-9; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; Pub. L.
101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 106-387, 114
Stat. 1549; E.O. 12613, 52 FR 41940, 3 CFR, 1987 Comp., p. 256; E.O.
12957, 60 FR 14615, 3 CFR, 1995 Comp., p. 332; E.O. 12959, 60 FR
24757, 3 CFR, 1995 Comp., p. 356; E.O. 13059, 62 FR 44531, 3 CFR,
1997 Comp., p. 217.

[[Page 53659]]

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 560.500 is added directly under the heading of subpart E to
read as follows:

Sec.  560.500  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  560.801  [Amended]

0
3. Section 560.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 575--IRAQI SANCTIONS REGULATIONS

0
1. The authority for part 575 is revised to read as follows:

    Authority: 3 U.S.C. 301; 18 U.S.C. 2332d; 22 U.S.C. 287c; Pub.
L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 31 U.S.C. 321(b);
50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-513, 104 Stat. 2047-2055
(50 U.S.C. 1701 note); E.O. 12722, 55 FR 31803, 3 CFR, 1990 Comp.,
p. 294; E.O. 12724, 55 FR 33089, 3 CFR, 1990 Comp., p. 297; E.O.
12817, 57 FR 48433, 3 CFR, 1992 Comp., p. 317; E.O. 13290, 68 FR
14307, March 20, 2003.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 575.500 is added directly under the heading of subpart E to
read as follow:

Sec.  575.500  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  575.801  [Amended]

0
3. Section 575.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 585--FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND MONTENEGRO)
AND BOSNIAN SERB-CONTROLLED AREAS OF THE REPUBLIC OF BOSNIA AND
HERZEGOVINA SANCTIONS REGULATIONS

0
1. The authority for part 585 is revised to read as follows:

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 31 U.S.C. 321(b); 49
U.S.C. 40106; 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104
Stat. 890 (28 U.S.C. 2461 note); E.O. 12808, 57 FR 23299, 3 CFR,
1992 Comp., p. 305; E.O. 12810, 57 FR 24347, 3 CFR, 1992 Comp., p.
307; E.O. 12831, 58 FR 5253, 3 CFR, 1993 Comp., p. 576; E.O. 12846,
58 FR 25771, 3 CFR, 1993 Comp., p. 599; E.O. 12934, 59 FR 54117, 3
CFR, 1994 Comp., p. 930; E.O. 13304, 68 FR 32315, May 29, 2003.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 585.500 is added directly under the heading of subpart E to
read as follows:

Sec.  585.500  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  585.801  [Amended]

0
3. Section 585.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 586--FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA & MONTENEGRO)
KOSOVO SANCTIONS REGULATIONS

0
1. The authority for part 586 is revised to read as follows:

    Authority:  3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651,
1701-1706; E.O. 13088, 63 FR 32109, 3 CFR, 1998 Comp., p. 191; E.O.
13121, 64 FR 24021, 3 CFR, 1999 Comp., p. 176; E.O. 13192, 66 FR
7379, 3 CFR, 3 CFR, 2002 Comp., p. 733; E.O. 13304, 68 FR 32315, May
29, 2003.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

Sec.  586.501  [Amended]

0
2. Section 586.501 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

Subpart H--Procedures

Sec.  586.801  [Amended]

0
3. Section 586.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 587--FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND MONTENEGRO)
MILOSEVIC SANCTIONS REGULATIONS

0
1. The authority for part 587 is revised to read as follows:

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 31 U.S.C. 321(b); 50
U.S.C. 1601-1651, 1701-1706; E.O. 13088, 63 FR 32109, 3 CFR, 1998
Comp., p. 191; E.O. 13121, 64 FR 24021, 3 CFR, 1999 Comp., p. 176;
E.O. 13192, 66 FR 7379, 3 CFR, 2002 Comp., p. 733; E.O. 13304, 68 FR
32315, May 29, 2003.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

Sec.  587.501  [Amended]

0
2. Section 587.501 is amended by revising the reference ``subpart D''
to read ``subpart E,''.

Subpart H--Procedures

Sec.  587.801  [Amended]

0
3. Section 587.801 is amended by revising the reference ``subpart D''
to read ``subpart E''.

PART 588--WESTERN BALKANS STABILIZATION REGULATIONS

0
1. The authority for part 588 is revised to read as follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651,
1701-1706; E.O. 13219, 66 FR 34777, 3 CFR, 2002 Comp., p. 778; E.O.
13304, 68 FR 32315, May 29, 2003.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

Sec.  588.501  [Amended]

0
2. Section 588.501 is amended by revising the reference ``subpart D''
to read ``subpart E''.

Subpart H--Procedures

Sec.  588.801  [Amended]

0
3. Section 588.801 is amended by revising the reference ``subpart D''
to read ``subpart E''.

PART 590--ANGOLA (UNITA) SANCTIONS REGULATIONS

0
1. The authority for part 590 is revised to read:

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 31 U.S.C. 321(b); 50
U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28
U.S.C. 2461 note); E.O. 12865, 58 FR 51005, 3 CFR, 1993 Comp., p.
636; E.O. 13069, 62 FR 65989, 3 CFR, 1997 Comp., p. 232; E.O. 13098,
63 FR 44771, 3 CFR, 1998 Comp., p. 206; E.O. 13298, 69 FR 24857, May
6, 2003.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

Sec.  590.501  [Amended]

0
2. Section 590.501 is amended by revising the reference ``subpart D''
to read ``subpart E,''.

[[Page 53660]]

Subpart H--Procedures

Sec.  590.801  [Amended]

0
3. Section 590.801 is amended by revising the reference ``subpart D''
to read ``subpart E,''.

PART 591--ROUGH DIAMONDS (SIERRA LEONE & LIBERIA) SANCTIONS
REGULATIONS

0
1. The authority for part 591 is revised to read as follows:

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 31 U.S.C. 321(b); 50
U.S.C. 1601-1641, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28
U.S.C. 2461 note); E.O. 13194, 66 FR 7389, 3 CFR, 2001 Comp., p.741;
E.O. 13213, 66 FR 28829, 3 CFR, 2001 Comp., p.770; E.O. 13312, 68 FR
147, July 29, 2003.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

Sec.  591.501  [Amended]

0
2. Section 591.501 is amended by revising the reference ``subpart D''
to read ``subpart E''.

Subpart H--Procedures

Sec.  591.801  [Amended]

0
3. Section 591.801 is amended by revising the reference ``subpart D''
to read ``subpart E''.

PART 594--GLOBAL TERRORISM SANCTIONS REGULATIONS

0
1. The authority for part 594 is revised to read as follows:

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 31 U.S.C. 321(b); 50
U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28
U.S.C. 2461 note); E.O. 13224, 66 FR 49079, September 25, 2001; E.O.
13268, 67 FR 44751, July 3, 2002; 3 CFR, 2002 Comp., p. 240; E.O.
13284, 64 FR 4075, January 28, 2003.

Subpart E--Licenses, Authorizations and Statements of Licensing
Policy

0
2. Section 594.501 is revised to read as follows:

Sec.  594.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

0
3. Section 594.801 is revised to read as follows:

Sec.  594.801  Procedures.

    For license application procedures and procedures relating to
amendments, modifications, or revocations of licenses; administrative
decisions; rulemaking; and requests for documents pursuant to the
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see

part 501, subpart E, of this chapter.

PART 595--TERRORISM SANCTIONS REGULATIONS

0
1. The authority for part 595 continues to read as follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651,
1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note);
E.O. 12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 319; E.O. 13224, 66 FR
49079, September 25, 2001.

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 595.500 is added directly under the heading of subpart E to
read as follows:

Sec.  595.500  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  595.801  [Amended]

0
3. Section 595.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 596--TERRORISM LIST GOVERNMENTS SANCTIONS REGULATIONS

0
1. The authority for part 596 continues to read as follows:

    Authority: 18 U.S.C. 2332d; 31 U.S.C. 321(b).

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 596.500 is added directly under the heading of subpart E to
read as follows:

Sec.  596.500  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  596.801  [Amended]

0
3. Section 596.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 597--FOREIGN TERRORIST ORGANIZATION SANCTIONS REGULATIONS

0
1. The authority for part 597 is revised to read:

    Authority: 31 U.S.C. 321(b); Pub. L. 101-410, 104 Stat. 890 (28
U.S.C. 2461 note); Pub. L. 104-132, 110 Stat. 1214, 1248-53 (8
U.S.C. 1189, 18 U.S.C. 2339B).

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
2. Section 597.500 is added directly under the heading of subpart E to
read as follow:

Sec.  597.500  Licensing procedures.

    For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part.

Subpart H--Procedures

Sec.  597.801  [Amended]

0
3. Section 597.801 is amended by revising the reference ``subpart D of
part 501'' to read ``part 501, subpart E,''.

PART 598--FOREIGN NARCOTICS KINGPIN SANCTIONS REGULATIONS

Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy

0
1. The authority for part 598 continues to read:

    Authority: 3 U.S.C. 301; 21 U.S.C. 1901-1908; 31 U.S.C. 321(b);
Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note).

Sec.  598.501  [Amended]

0
2. Section 598.501 is amended by revising the reference ``subpart D''
to read ``subpart E,''.

Subpart H--Procedures

Sec.  598.801  [Amended]

0
3. Section 598.801 is amended by revising the reference ``subpart D''
to read ``subpart E''.

[[Page 53661]]

    Dated: August 29, 2003.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: August 29, 2003.
Juan Zarate,
Deputy Assistant Secretary (Terrorist Financing and Financial Crimes),
Department of the Treasury.
[FR Doc. 03-22968 Filed 9-5-03; 4:30 pm]

BILLING CODE 4810-25-P