PART 766—ADMINISTRATIVE ENFORCEMENT PROCEEDINGS Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; et seq.; Source: 61 FR 12907, Mar. 25, 1996, unless otherwise noted. § 766.1 Scope. In this part, references to the EAR are references to 15 CFR chapter VII, subchapter C. This part describes the procedures for imposing administrative sanctions for violations of the Export Administration Act of 1979, as amended (the EAA), the Export Administration Regulations (EAR), or any order, license or authorization issued thereunder. Parts 760 and 764 of the EAR specify those actions that constitute violations, and part 764 describes the sanctions that apply. In addition to describing the procedures for imposing sanctions, this part describes the procedures for imposing temporary denial orders to prevent imminent violations of the EAA, the EAR, or any order, license or authorization issued thereunder. This part also describes the procedures for taking the discretionary protective administrative action of denying the export privileges of persons who have been convicted of violating any of the statutes, including the EAA, listed in section 11(h) of the EAA. Nothing in this part shall be construed as applying to or limiting other administrative or enforcement action relating to the EAA or the EAR, including the exercise of any investigative authorities conferred by the EAA. This part does not confer any procedural rights or impose any requirements based on the Administrative Procedure Act for proceedings charging violations under the EAA, except as expressly provided for in this part. § 766.2 Definitions. As used in this part, the following definitions apply: Administrative law judge. Assistant Secretary. Bureau of Industry and Security (BIS). Final decision. Initial decision. Party. Recommended decision. Respondent. Under Secretary. [61 FR 12907, Mar. 25, 1996, as amended at 67 FR 20631, Apr. 26, 2002; 70 FR 8250, Feb. 18, 2005] § 766.3 Institution of administrative enforcement proceedings. (a) Charging letters. (b) Notice of issuance of charging letter instituting administrative enforcement proceeding. (1) By sending a copy by registered or certified mail or by express mail or commercial courier or delivery service addressed to the respondent at the respondent's last known address; (2) By leaving a copy with the respondent or with an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process for the respondent; or (3) By leaving a copy with a person of suitable age and discretion who resides at the respondent's last known dwelling. (4) Delivery of a copy of the charging letter, if made in the manner described in paragraph (b)(2) or (3) of this section, shall be evidenced by a certificate of service signed by the person making such service, stating the method of service and the identity of the person with whom the charging letter was left. The certificate of service shall be filed with the administrative law judge. (c) The date of service of notice of the issuance of a charging letter instituting an administrative enforcement proceeding, or service of notice of the issuance of a supplement or amendment to a charging letter, is the date of its delivery, or of its attempted delivery, by any means described in paragraph (b)(1) of this section. [61 FR 12907, Mar. 25, 1996, as amended at 69 FR 7870, Feb. 20, 2004; 72 FR 39005, July 17, 2007; 78 FR 48606, Aug. 9, 2013] § 766.4 Representation. A respondent individual may appear and participate in person, a corporation by a duly authorized officer or employee, and a partnership by a partner. If a respondent is represented by counsel, counsel shall be a member in good standing of the bar of any State, Commonwealth or Territory of the United States, or of the District of Columbia, or be licensed to practice law in the country in which counsel resides if not the United States. A respondent personally, or through counsel or other representative, shall file a notice of appearance with the administrative law judge. BIS will be represented by the Office of Chief Counsel for Industry and Security, U.S. Department of Commerce. [61 FR 12907, Mar. 25, 1996, as amended at 67 FR 45633, July 10, 2002] § 766.5 Filing and service of papers other than charging letter. (a) Filing. (b) Service. (c) Date. (d) Certificate of service. (e) Computing period of time. [61 FR 12907, Mar. 25, 1996, as amended at 67 FR 45633, July 10, 2002; 70 FR 8250, Feb. 18, 2005] § 766.6 Answer and demand for hearing. (a) When to answer. (b) Contents of answer. (c) Demand for hearing. (d) English language required. § 766.7 Default. (a) General. (b) Petition to set aside default Procedure. (2) Time limits. § 766.8 Summary decision. At any time after a proceeding has been initiated, a party may move for a summary decision disposing of some or all of the issues. The administrative law judge may render an initial or recommended decision and issue or recommend an order if the entire record shows, as to the issue(s) under consideration: (a) That there is no genuine issue as to any material fact; and (b) That the moving party is entitled to a summary decision as a matter of law. § 766.9 Discovery. (a) General. (b) Interrogatories and requests for admission or production of documents. (c) Depositions. (d) Enforcement. § 766.10 Subpoenas. (a) Issuance. (b) Service. (c) Timing. § 766.11 Matter protected against disclosure. (a) Protective measures. (b) Arrangements for access. § 766.12 Prehearing conference. (a) The administrative law judge, on the judge's own motion or on request of a party, may direct the parties to participate in a prehearing conference, either in person or by telephone, to consider: (1) Simplification of issues; (2) The necessity or desirability of amendments to pleadings; (3) Obtaining stipulations of fact and of documents to avoid unnecessary proof; or (4) Such other matters as may expedite the disposition of the proceedings. (b) The administrative law judge may order the conference proceedings to be recorded electronically or taken by a reporter, transcribed and filed with the judge. (c) If a prehearing conference is impracticable, the administrative law judge may direct the parties to correspond with the judge to achieve the purposes of such a conference. (d) The administrative law judge will prepare a summary of any actions agreed on or taken pursuant to this section. The summary will include any written stipulations or agreements made by the parties. § 766.13 Hearings. (a) Scheduling. (b) Hearing procedure. (c) Testimony and record. (d) Failure to appear. § 766.14 Interlocutory review of rulings. (a) At the request of a party, or on the judge's own initiative, the administrative law judge may certify to the Under Secretary for review a ruling that does not finally dispose of a proceeding, if the administrative law judge determines that immediate review may hasten or facilitate the final disposition of the matter. (b) Upon certification to the Under Secretary of the interlocutory ruling for review, the parties will have 10 days to file and serve briefs stating their positions, and five days to file and serve replies, following which the Under Secretary will decide the matter promptly. § 766.15 Proceeding without a hearing. If the parties have waived a hearing, the case will be decided on the record by the administrative law judge. Proceeding without a hearing does not relieve the parties from the necessity of proving the facts supporting their charges or defenses. Affidavits or declarations, depositions, admissions, answers to interrogatories and stipulations may supplement other documentary evidence in the record. The administrative law judge will give each party reasonable opportunity to file rebuttal evidence. § 766.16 Procedural stipulations; extension of time. (a) Procedural stipulations. (b) Extension of time. (2) The administrative law judge may, on the judge's own initiative or upon application by any party, either before or after the expiration of any applicable time limitation, extend the time within which to file and serve an answer to a charging letter or do any other act required by this part. § 766.17 Decision of the administrative law judge. (a) Predecisional matters. (1) Exceptions to any ruling by the judge or to the admissibility of evidence proffered at the hearing; (2) Proposed findings of fact and conclusions of law; (3) Supporting legal arguments for the exceptions and proposed findings and conclusions submitted; and (4) A proposed order. (b) Decision and order. (1) Initial decision. (2) Recommended decision. (c) Suspension of sanctions. (d) Time for decision. § 766.18 Settlement. (a) Cases may be settled before service of a charging letter. (b) Cases may also be settled after service of a charging letter. (2) If the case is pending before the Under Secretary under § 766.21 or § 766.22 of this part, the parties may submit a settlement proposal to the Under Secretary for approval and signature. If the Under Secretary approves the proposal, he/she will issue an appropriate order. If the Under Secretary does not approve the proposal, the case will proceed to final decision in accordance with § 766.21 or § 766.22 of this part, as appropriate. (c) Any order disposing of a case by settlement may suspend the administrative sanction imposed, in whole or in part, on such terms of probation or other conditions as the signing official may specify. Any such suspension may be modified or revoked by the signing official, in accordance with the procedures set forth in § 766.17(c) of this part. (d) Any respondent who agrees to an order imposing any administrative sanction does so solely for the purpose of resolving the claims in the administrative enforcement proceeding brought under this part. This reflects the fact that BIS has neither the authority nor the responsibility for instituting, conducting, settling, or otherwise disposing of criminal proceedings. That authority and responsibility are vested in the Attorney General and the Department of Justice. (e) Cases that are settled may not be reopened or appealed. (f) Supplements nos. 1 and 2 to this part describe how BIS typically exercises its discretion regarding the terms under which it is willing to settle particular cases. [61 FR 12907, Mar. 25, 1996, as amended at 69 FR 7870, Feb. 20, 2004; 72 FR 39006, July 17, 2007] § 766.19 Reopening. The respondent may petition the administrative law judge within one year of the date of the final decision, except where the decision arises from a default judgment or from a settlement, to reopen an administrative enforcement proceeding to receive any relevant and material evidence which was unknown or unobtainable at the time the proceeding was held. The petition must include a summary of such evidence, the reasons why it is deemed relevant and material, and the reasons why it could not have been presented at the time the proceedings were held. The administrative law judge will grant or deny the petition after providing other parties reasonable opportunity to comment. If the proceeding is reopened, the administrative law judge may make such arrangements as the judge deems appropriate for receiving the new evidence and completing the record. The administrative law judge will then issue a new initial or recommended decision and order, and the case will proceed to final decision and order in accordance with § 766.21 or § 766.22 of this part, as appropriate. § 766.20 Record for decision and availability of documents. (a) General. (b) Restricted access. (c) Availability of documents Scope. Federal Register. (ii) For proceedings started before October 12, 1979, the public availability of the record for decision will be governed by the applicable regulations in effect when the proceedings were begun. (2) Timing Antiboycott cases. (ii) Other cases. [61 FR 12907, Mar. 25, 1996, as amended at 87 FR 34153, June 6, 2022] § 766.21 Appeals. (a) Grounds. (1) That a necessary finding of fact is omitted, erroneous or unsupported by substantial evidence of record; (2) That a necessary legal conclusion or finding is contrary to law; (3) That prejudicial procedural error occurred, or (4) That the decision or the extent of sanctions is arbitrary, capricious or an abuse of discretion. The appeal must specify the grounds on which the appeal is based and the provisions of the order from which the appeal is taken. (b) Filing of appeal. (c) Effect of appeal. (d) Appeal procedure. (e) Decisions. § 766.22 Review by Under Secretary. (a) Recommended decision. (b) Submissions by parties. (c) Final decision. (d) Delivery. [61 FR 12907, Mar. 25, 1996, as amended at 75 FR 33683, June 15, 2010] § 766.23 Related persons. (a) General. (b) Procedures. ex parte (c) Appeals. (1) A person named as related to the respondent in an order issued pursuant to § 766.25 may file an appeal with the Under Secretary for Industry and Security pursuant to part 756 of the EAR. (2) A person named as related to the respondent in an order issued pursuant to other provisions of this part may file an appeal with the administrative law judge. (i) If the order made applicable to the related person is for a violation related to part 760 of the EAR, the related person may file an appeal with the administrative law judge. The related person may appeal the initial decision and order of the administrative law judge to the Under Secretary in accordance with the procedures set forth in § 766.21. (ii) If the order made applicable to the related person is issued pursuant to § 766.24 of this part to prevent an imminent violation, the recommended decision and order of the administrative law judge shall be reviewed by the Under Secretary in accordance with the procedures set forth in § 766.24(e) of this part. (iii) If the order made applicable to the related person is for a violation of the EAR not related to part 760 of the EAR and not issued pursuant to § 766.24 of this part, the recommended decision and order of the administrative law judge shall be reviewed by the Under Secretary in accordance with the procedures set forth in § 766.22 of this part. [61 FR 12907, Mar. 25, 1996, as amended at 71 FR 27605, May 12, 2006] § 766.24 Temporary denials. (a) General. ex parte (b) Issuance. (2) The temporary denial order shall define the imminent violation and state why it was issued without a hearing. Because all denial orders are public, the description of the imminent violation and the reasons for proceeding on an ex parte (3) A violation may be “imminent” either in time or in degree of likelihood. To establish grounds for the temporary denial order, BIS may show either that a violation is about to occur, or that the general circumstances of the matter under investigation or case under criminal or administrative charges demonstrate a likelihood of future violations. To indicate the likelihood of future violations, BIS may show that the violation under investigation or charges is significant, deliberate, covert and/or likely to occur again, rather than technical or negligent, and that it is appropriate to give notice to companies in the United States and abroad to cease dealing with the person in U.S.-origin items in order to reduce the likelihood that a person under investigation or charges continues to export or acquire abroad such items, risking subsequent disposition contrary to export control requirements. Lack of information establishing the precise time a violation may occur does not preclude a finding that a violation is imminent, so long as there is sufficient reason to believe the likelihood of a violation. (4) The temporary denial order will be issued for a period not exceeding 180 days. (5) Notice of the issuance of a temporary denial order on an ex parte (c) Related persons. (d) Renewal. (2) Non-resident respondents. (3) Hearing. (ii) Any person designated as a related person may not oppose the issuance or renewal of the temporary denial order, but may file an appeal in accordance with § 766.23(c) of this part. (iii) If no written opposition to BIS's renewal request is received within the specified time, the Assistant Secretary may issue the order renewing the temporary denial order without a hearing. (4) A temporary denial order may be renewed more than once. (e) Appeals Filing. (ii) The filing of an appeal shall stay neither the effectiveness of the temporary denial order nor any application for renewal, nor will it operate to bar the Assistant Secretary's consideration of any renewal application. (2) Grounds. (3) Appeal procedure. (4) Recommended decision. (5) Final decision. (f) Delivery. Federal Register [61 FR 12907, Mar. 25, 1996, as amended at 71 FR 14099, Mar. 21, 2006; 71 FR 27606, May 12, 2006; 75 FR 33683, June 15, 2010; 88 FR 59793, Aug. 30, 2023] § 766.25 Administrative action denying export privileges. (a) General. (b) Procedure. (c) Criteria. (d) Duration. (e) Effect. (f) Publication. Federal Register (g) Appeal. (h) Applicability to related person. [61 FR 12907, Mar. 25, 1996, as amended at 65 FR 14863, Mar. 20, 2000; 67 FR 54953, Aug. 27, 2002; 85 FR 73418, Nov. 18, 2020] Supplement No. 1 to Part 766—Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases Introduction This supplement describes how the Office of Export Enforcement (OEE) at the Bureau of Industry and Security (BIS) responds to apparent violations of the Export Administration Regulations (EAR) and, specifically, how OEE makes penalty determinations in the settlement of civil administrative enforcement cases under part 764 of the EAR. This guidance does not apply to enforcement cases for violations under part 760 of the EAR—Restrictive Trade Practices or Boycotts. Supplement no. 2 to part 766 continues to apply to civil administrative enforcement cases involving part 760 violations. Because many administrative enforcement cases are resolved through settlement, the process of settling such cases is integral to the enforcement program. OEE carefully considers each settlement offer in light of the facts and circumstances of the case, relevant precedent, and OEE's objective to achieve in each case an appropriate penalty and deterrent effect. In settlement negotiations, OEE encourages parties to provide, and will give serious consideration to, information and evidence that parties believe are relevant to the application of this guidance to their cases, to whether a violation has in fact occurred, or to whether they have an affirmative defense to potential charges. This guidance does not confer any right or impose any obligation regarding what penalties OEE may seek in litigating a case or what posture OEE may take toward settling a case. Parties do not have a right to a settlement offer or particular settlement terms from OEE, regardless of settlement positions OEE has taken in other cases. I. Definitions Note: Apparent Violation Transaction value Voluntary self-disclosure II. Types of Responses to Apparent Violations OEE, among other responsibilities, investigates apparent violations of the EAR, or any order, license or authorization issued thereunder. When it appears that such a violation may have occurred, OEE investigations may lead to no action, a warning letter or an administrative enforcement proceeding. A violation may also be referred to the Department of Justice for criminal prosecution. The type of enforcement action initiated by OEE will depend primarily on the nature of the violation. Depending on the facts and circumstances of a particular case, an OEE investigation may lead to one or more of the following actions: A. No Action. B. Warning Letter. C. Administrative enforcement case. See See D. Non-Monetary Penalty. E. Civil Monetary Penalty. F. Criminal Referral. G. Other Administrative Sanctions or Actions. License Revision, Suspension or Revocation. Denial of Export Privileges. e.g., Exclusion from practice. Training and Audit Requirements. H. Suspension or Deferral. See III. Factors Affecting Administrative Sanctions Many apparent violations are isolated occurrences, the result of a good-faith misinterpretation, or involve no more than simple negligence or carelessness. In such instances, absent the presence of aggravating factors, the matter frequently may be addressed with a no action determination letter or, if deemed necessary, a warning letter. In other cases, where the imposition of an administrative penalty is deemed appropriate, OEE will consider some or all of the following Factors in determining the appropriate sanctions in administrative cases, including the appropriate amount of a civil monetary penalty where such a penalty is sought and is imposed as part of a settlement agreement and order. These factors describe circumstances that, in OEE's experience, are commonly relevant to penalty determinations in settled cases. Factors that are considered exclusively aggravating, such as willfulness, or exclusively mitigating, such as situations where remedial measures were taken, are set forth paragraphs II(A) through (D) and (G) through (I). This guidance also identifies General Factors—which can be either mitigating or aggravating—such as the presence or absence of an internal compliance program at the time the apparent violations occurred. Other relevant Factors may also be considered at OEE's discretion. While some violations of the EAR have a degree of knowledge or intent as an element of the offense, OEE may regard a violation of any provision of the EAR as knowing or willful if the facts and circumstances of the case support that conclusion. For example, evidence that a corporate entity had knowledge at a senior management level may mean that a higher penalty may be appropriate. OEE will also consider, in accordance with supplement no. 3 to part 732 of the EAR (15 CFR part 732), the presence of any red flags that should have alerted the Respondent that a violation was likely to occur. The aggravating factors identified in the Guidelines do not alter or amend § 764.2(e) or the definition of “knowledge” in § 772.1, or other provisions of parts 764 and 772 of the EAR (15 CFR parts 764 and 772). If the violations are of such a nature and extent that a monetary fine alone represents an insufficient penalty, a denial or exclusion order may also be imposed to prevent future violations of the EAR. Aggravating Factors A. Willful or Reckless Violation of Law. 1. Willfulness. 2. Recklessness/gross negligence. 3. Concealment. 4. Pattern of Conduct. 5. Prior Notice. 6. Management Involvement. B. Awareness of Conduct at Issue: The Respondent's awareness of the conduct giving rise to the apparent violation. 1. Actual Knowledge. 2. Reason to Know. 3. Management Involvement. C. Harm to Regulatory Program Objectives: The actual or potential harm to regulatory program objectives caused by the conduct giving rise to the apparent violation. 1. Implications for U.S. National Security: The impact that the apparent violation had or could potentially have on the national security of the United States. 2. Implications for U.S. Foreign Policy: The effect that the apparent violation had or could potentially have on U.S. foreign policy objectives. D. Failure to disclose a significant apparent violation. General Factors E. Individual Characteristics: The particular circumstances and characteristics of a Respondent. 1. Commercial Sophistication: The commercial sophistication and experience of the Respondent. 2. Size and Sophistication of Operations: The size of a Respondent's business operations, where such information is available and relevant. 3. Volume and Value of Transactions: The total volume and value of transactions undertaken by the Respondent on an annual basis, with attention given to the volume and value of the apparent violations as compared with the total volume and value of all transactions. 4. Regulatory History: The Respondent's regulatory history, including OEE's issuance of prior penalties, warning letters, or other administrative actions (including settlements). 5. Other illegal conduct in connection with the export. 6. Criminal Convictions. Note: F. Compliance Program: The existence, nature and adequacy of a Respondent's risk-based BIS compliance program at the time of the apparent violation. http://www.bis.gov/. Mitigating Factors G. Remedial Response. 1. The steps taken by the Respondent upon learning of the apparent violation. Did the Respondent immediately stop the conduct at issue? Did the Respondent undertake to file a VSD? 2. In the case of an entity, the processes followed to resolve issues related to the apparent violation. Did the Respondent discover necessary information to ascertain the causes and extent of the apparent violation, fully and expeditiously? Was senior management fully informed? If so, when? 3. In the case of an entity, whether it adopted new and more effective internal controls and procedures to prevent the occurrence of similar apparent violations. If the entity did not have a BIS compliance program in place at the time of the apparent violation, did it implement one upon discovery of the apparent violation? If it did have a BIS compliance program, did it take appropriate steps to enhance the program to prevent the recurrence of similar violations? Did the entity provide the individual(s) and/or managers responsible for the apparent violation with additional training, and/or take other appropriate action, to ensure that similar violations do not occur in the future? 4. Where applicable, whether the Respondent undertook a thorough review to identify other apparent violations. H. Exceptional Cooperation with OEE: The nature and extent of the Respondent's cooperation with OEE, beyond those actions set forth in Factor F. 1. Did the Respondent provide OEE with all relevant information regarding the apparent violation at issue in a timely, comprehensive and responsive manner (whether or not voluntarily self-disclosed), including, if applicable, overseas records? 2. Did the Respondent research and disclose to OEE relevant information regarding any other apparent violations caused by the same course of conduct? 3. Did the Respondent provide substantial assistance in another OEE investigation of another person who may have violated the EAR? 4. Has the Respondent previously made substantial voluntary efforts to provide information (such as providing tips that led to enforcement actions against other parties) to Federal law enforcement authorities in support of the enforcement of U.S. export control regulations? Has the Respondent previously disclosed information regarding the conduct of others that led to enforcement action by OEE? 5. Did the Respondent enter into a statute of limitations tolling agreement, if requested by OEE (particularly in situations where the apparent violations were not immediately disclosed or discovered by OEE, in particularly complex cases, and in cases in which the Respondent has requested and received additional time to respond to a request for information from OEE)? If so, the Respondent's entering into a tolling agreement may be deemed a mitigating factor. Note: I. License Was Likely To Be Approved. i.e., Other Relevant Factors Considered on a Case-by-Case Basis J. Related Violations. K. Multiple Unrelated Violations. L. Other Enforcement Action. M. Future Compliance/Deterrence Effect. N. Other Factors That OEE Deems Relevant. IV. Civil Penalties A. Determining What Sanctions Are Appropriate in a Settlement OEE will review the facts and circumstances surrounding an apparent violation and apply the Factors Affecting Administrative Sanctions in section III of this supplement in determining the appropriate sanction or sanctions in an administrative case, including the appropriate amount of a civil monetary penalty where such a penalty is sought and imposed. Penalties for settlements reached after the initiation of litigation will usually be higher than those described by these guidelines. B. Amount of Civil Penalty 1. Determining Whether a Case is Egregious. A case will be considered an “egregious case” where the analysis of the applicable factors, with a focus on Factors A, B, and C, indicates that the case represents a particularly serious violation of the law calling for a strong enforcement response. 2. Monetary Penalties in Egregious Cases and Non-Egregious Cases. a. Base Category Calculation and Voluntary Self-Disclosures. i. In a non-egregious case, if the apparent violation is disclosed through a voluntary self-disclosure, the base penalty amount shall be up to one-half of the transaction value. ii. In a non-egregious case, if the apparent violation comes to OEE's attention by means other than a voluntary self-disclosure, the base penalty amount shall be up to the transaction value. iii. In an egregious case, if the apparent violation is disclosed through a voluntary self-disclosure, the base penalty amount shall be an amount up to one-half of the statutory maximum penalty applicable to the violation. iv. In an egregious case, if the apparent violation comes to OEE's attention by means other than a voluntary self-disclosure, the base penalty amount shall be an amount up to the statutory maximum penalty applicable to the violation. v. The applicable statutory maximum civil penalty per violation of the Export Control Reform Act (ECRA) of 2018 is a fine defined in ECRA and adjusted in accordance with U.S. law, e.g., The following matrix represents the base penalty amount of the civil monetary penalty for each category of violation: Base Penalty Matrix Voluntary self-disclosure? Egregious case? NO YES YES (1) Up to One-Half of the Transaction Value (3) Up to One-Half of the Applicable Statutory Maximum. NO (2) Up to the Transaction Value (4) Up to the Applicable Statutory Maximum. b. Adjustment for Applicable Relevant Factors. C. Settlement Procedures The procedures relating to the settlement of administrative enforcement cases are set forth in § 766.18 of the EAR. [89 FR 75485, Sept. 16, 2024] Supplement No. 2 to Part 766—Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases Involving Antiboycott Matters (a) Introduction Scope. (2) Policy Regarding Settlement. (3) Limitation. (b) Responding to Violations. (1) Issuing a warning letter. (i) BIS may issue warning letters where: (A) The investigation commenced as a result of a voluntary self-disclosure satisfying the requirements of § 764.8 of the EAR; or (B) The party has not previously committed violations of the antiboycott provisions. (ii) BIS may also consider the category of violation as discussed in paragraph (d)(2) of this supplement in determining whether to issue a warning letter or initiate an enforcement proceeding. A violation covered by Category C (failure to report or late reporting of receipt of boycott requests) might warrant a warning letter rather than initiation of an enforcement proceeding. (iii) BIS will not issue a warning letter if it concludes, based on available information, that a violation did not occur. (iv) BIS may reopen its investigation of a matter should it receive additional evidence or if it appears that information previously provided to BIS during the course of its investigation was incorrect. (2) Pursuing an administrative enforcement case. (i) Charging letters may be issued when there is reason to believe that a violation has occurred. Cases may be settled before or after the issuance of a charging letter. See § 766.18 of this part. (ii) Although not required to do so by law, BIS may send a proposed charging letter to a party to inform the party of the violations that BIS has reason to believe occurred and how BIS expects that those violations would be charged. Issuance of the proposed charging letter provides an opportunity for the party and BIS to consider settlement of the case prior to the initiation of formal enforcement proceedings. (3) Referring for criminal prosecution. (c) Types of administrative sanctions. (1) A monetary penalty may be assessed for each violation as provided in § 764.3(a)(1) of the EAR; Note to paragraph ( c The maximum penalty is subject to adjustments under the Federal Civil Penalties Adjustment Act of 1990 (28 U.S.C. 2461, note (2000)), which are codified at 15 CFR 6.4. For violations that occurred before March 9, 2006, the maximum monetary penalty per violation is $11,000. For violations occurring on or after March 9, 2006, the maximum monetary penalty per violation is $50,000. (2) An order denying a party's export privileges under the EAR may be issued, under § 764.3(a)(2) of the EAR; or (3) Exclusion from practice under § 764.3(a)(3) of the EAR. (d) How BIS determines what sanctions are appropriate in a settlement General Factors. (i) Degree of seriousness. (ii) Category of violations. In connection with its activities described in paragraph (a)(1) of this supplement, BIS recognizes three categories of violations under the antiboycott provisions of the EAR. (See §§ 760.2, 760.4 and 760.5 of the EAR for examples of each type of violation other than recordkeeping). These categories reflect the relative seriousness of a violation, with Category A violations typically warranting the most stringent penalties, including up to the maximum monetary penalty, a denial order and/or an exclusion order. Through providing these categories in this penalty guidelines notice, BIS hopes to give parties a general sense of how it views the seriousness of various violations. This guidance, however, does not confer any right or impose any obligation as to what penalties BIS may impose based on its review of the specific facts of a case. (A) The Category A violations and the sections of the EAR that set forth their elements are: ( 1 ( 2 ( 3 ( 4 ( 5 (B) The Category B violations and the sections of the EAR that set forth their elements are: ( 1 ( 2 ( 3 ( 4 ( 5 (C) The Category C violation and the section of the EAR that sets forth its elements is: Failing to report timely receipt of boycott requests—§ 760.5. (iii) Violations arising out of related transactions. (A) First scenario. (B) Second scenario. (C) Third scenario. (iv) Multiple violations from unrelated transactions. (v) Timing of settlement. (vi) Related criminal or civil violations. (vii) Familiarity with the Antiboycott Provisions. (2) Specific mitigating and aggravating factors. (i) Specific mitigating factors. (A) Voluntary self-disclosure. (B) Effective compliance program. ( 1 General policy or program pertaining to Antiboycott Provisions. ( 2 Compliance with reporting and recordkeeping requirements. (C) Limited business with or in boycotted or boycotting countries. (D) History of compliance with the Antiboycott Provisions of the EAR. ( 1 ( i ( ii ( iii ( iv ( 2 (E) Exceptional cooperation with the investigation. (F) Clarity of request to furnish prohibited information or take prohibited action. (G) Violations arising out of a party's “passive” refusal to do business in connection with an agreement. (H) Isolated occurrence of violation. (ii) Specific Aggravating Factors. (A) Concealment or obstruction. (B) Serious disregard for compliance responsibilities. (C) History of compliance with the Antiboycott Provisions. ( 1 ( i ( ii ( iii ( iv ( 2 ( 3 (D) Familiarity with the type of transaction at issue in the violation. (E) Prior history of business with or in boycotted countries or boycotting countries. (F) Long duration or high frequency of violations. (G) Clarity of request to furnish prohibited information or take prohibited action. (H) Violation relating to specific information concerning an individual entity or individual. (I) Violations relating to “active” conduct concerning an agreement to refuse to do business. (e) Determination of Scope of Denial or Exclusion Order. (f) How BIS Makes Suspension and Deferral Decisions Civil Penalties. (2) Denial of Export Privileges and Exclusion from Practice. [72 FR 39006, July 17, 2007, as amended at 87 FR 60892, Oct. 7, 2022]