such instance shall be considered by the Compliance Commissioner as provided in § 388.4 (a). If an answer has been filed and no oral hearing has been demanded, the same shall be deemed waived, and the Compliance Commissioner shall proceed to consider the case upon all the pleadings and evidence available and shall provide for the making of the record in such manner as he deems appropriate. If an answer has been duly filed and an oral hearing has been demanded, the Compliance Commissioner shall set the case for such hearing, and due notice thereof shall be given to the respondent or his attorney. A respondent is not entitled to notice of hearing unless he has answered, raised issues to be determined as provided in § 388.5 and has made demand for hearing. If neither the respondent nor anyone on his behalf shall attend a hearing which has been set after due notice given, the hearing shall nevertheless proceed in his absence, and such absence shall not affect the validity of the hearing or any proceedings or action thereafter.

(b) Hearings shall be conducted by the Compliance Commissioner in a fair and impartial manner. The rules of evidence prevailing in courts of law shall not apply, but all evidentiary material relevant and material to the inquiry shall be received and given appropriate weight.

(c) Because the Export Administration Act of 1969 is concerned with national security and foreign policy, relevant and material evidentiary materials bearing on the enforcement of the Act, whether classified or not, must be considered by those making decisions in proceedings under the Export Control Regulations. Diligent effort shall be made, however, to declassify such classified materials or to secure unclassified summaries of or extracts from such classified materials, when not contrary to any statute or security regulation. Whenever an unclassified summary or extract of classified evidentiary materials shall be offered, the Compliance Commissioner shall compare it with the related classified materials. If he finds that the summary or extract is supported by the classified materials and omits only so much as remains classified, he may, subject to the right of the respondent to object on grounds of relevancy and materiality, admit the unclassified summary or extract as part of the open

record, to the extent he deems said summary or extract relevant and material. Thereafter, the respondent may submit evidence in explanation or contradiction thereof. In no case shall the respondent or his attorney be entitled to inspect the classified materials.

(d) The Compliance Commissioner may administer oaths and affirmations. Respondent may be represented by counsel but need not be. The proceeding shall be taken by a reporter, transcribed, and filed with the Compliance Commissioner. Respondents shall have an opportunity to examine the transcript and to obtain a copy upon payment of proper costs.

§ 388.8 Proceedings before and report of Compliance Commissioner.

(a) In any situation for which the regulations in this part make no provision, the Compliance Commissioner may, in his discretion, conform the proceedings before him to the Federal Rules of Civil Procedure.

(b) The Compliance Commissioner shall consider the record and shall prepare a written report which shall include findings of fact, including a finding whether or not a violation has occurred, and recommendations. The report, transcript, and exhibits shall be transmitted to the Director, Office of Export Control, Bureau of International Commerce. § 388.9 Disposition of proceeding.

If the Compliance Commissioner finds that the evidence is not sufficient to justify the conclusion that a violation has been committed, the Director, Office of Export Control, shall enter an order dismissing the charges. If the Compliance Commissioner finds that a violation has been committed, his recommendation shall be advisory only, and the Director, Office of Export Control, shall review the record, consider the report of the Compliance Commissioner, and determine the disposition of the case. He may then issue an order denying the respondent's export privileges, as provided in § 388.1, or take such other action as he deems appropriate. Any order issued shall be effective for such period of time and shall contain such additional terms and conditions as may be deemed appropriate and prescribed therein. A copy of the order together with a copy of the Compliance Commissioner's report shall be served upon the respondent, in the same manner as pro

The Investigations Division of the Office of Export Control, and the respondent, after transmission of a charging letter, may, by agreement, submit to the Compliance Commissioner a proposal for the issuance of a consent order. The Compliance Commissioner shall review the facts of the case and the proposal and, for this purpose, may conduct informal conferences with the parties and may require the informal presentation before him of the evidence in the case. If he does not approve the proposal, he shall so notify the respondent or his attorney and the Investigations Division, and the case shall proceed to hearing. If he approves the proposal, he shall report the facts of the case with his recommendations to the Director, Office of Export Control. The Director, Office of Export Control, may reject the proposal, in which event the case will proceed to hearing, or he may accept the proposal and issue an appropriate order.

§ 388.11 Temporary denials.

(a) Denial within charging letter. A charging letter from and after the date of its issuance may deny to any respondent the privilege of participating directly or indirectly in any manner or capacity in any transaction involving commodities or technical data in whole or in part exported or to be exported from the United States to any foreign destination pursuant to any validated export license. The charging letter may also suspend or revoke and require the return for cancellation of outstanding validated licenses, but shall not otherwise deny export privileges to the respondent. Such latter privileges, however, may be denied as provided in paragraph (b) of this section.

(b) Temporary denial orders-(1) Grounds for issuance. Any person who is under investigation, or against whom administrative or judicial proceedings are pending, for violation of any law or regulation relating to export control, may be summarily denied export privileges, as set forth in § 388.1, without prior notice or opportunity for hearing, where and to the extent such denial of export privileges is found reasonably necessary to protect the public interest pending final disposition of the investi

gation or proceedings. Such a temporary denial order shall be issued only for such limited time, ordinarily not exceeding 30 days, as may be required to complete the investigation or the proceedings, but may, on a showing of need for additional time, be extended in the same manner as originally issued.

(2) Procedure for issuance. An application for a temporary denial order shall be made by the Investigations Division, Office of Export Control, to the Compliance Commissioner and shall include a brief recital of the facts and a statement of the grounds for the application and the nature of the order sought. The Compliance Commissioner shall review the application and may require informal presentation of evidence before him. If he does not approve the application, he shall so notify the Investigations Divisions by memorandum, and no further action shall be taken upon it. If he approves it in whole or in part, he shall send his recommendation, together with the application and accompanying documents, to the Director, Office of Export Control, who may issue such temporary denial order as he shall deem appropriate. A copy of the order shall be sent to the respondent in the same manner as provided in § 388.3 (b) for service upon him of a charging letter.

(c) Motions to vacate or modify—(1) Motion to vacate. The respondent may at any time move to vacate or modify any temporary denial of export privileges contained in any charging letter or order. Any such motion shall be filed with the Compliance Commissioner and an oral hearing thereon, if requested, shall be held before the Compliance Commissioner at the earliest convenient date. The Compliance Commissioner shall consider the evidence presented and shall submit his report and recommendations thereon to the Director, Office of Export Control. The latter may issue such order disposing of the motion as he deems appropriate, and a true copy thereof shall be sent promptly to the respondent or his attorney.

(2) Continuation and extension. In any case where no motion is made pursuant to subparagraph (1) of this paragraph to vacate or modify a temporary denial, or where, if such motion is made, substantial evidence is not presented to support the granting thereof in whole or in part, such denial or any modification thereof may be continued and ex

tended to and including completion of the proceedings.

(d) Deferment of action on license applications otherwise prohibited. Except for the particular application or license which is itself the basis of any investigation or proceeding, and except pursuant to paragraph (a) of this section, no export license application filed by any person shall be returned without action, held without action, or rejected, solely because such person is under investigation, or that proceedings against him are pending, otherwise than in accordance with the terms of a temporary denial order issued under paragraph (b) of this section.

The Compliance Commissioner may, upon written request, grant a rehearing or reopen a proceeding at any time for the purpose of hearing any relevant and material evidence which was not known or which was unobtainable at the time of the original hearing. The request for rehearing or reopening shall contain 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 original hearing. The Compliance Commissioner shall give prompt notice of the time and place of any further hearing, if one is held, and shall conduct such hearing and submit his report and recommendations thereon to the Director, Office of Export Control for final action in the same manner as provided for the original proceeding as described in § 388.9.

§ 388.13 Appeals.

(a) Grounds and conditions for appeal (1) Grounds shall be specified. The respondent may appeal from a denial of export privileges, from a denial of privileges of practice, or from the imposition of a civil penalty, upon the ground (i) that the findings of violation are not supported by any substantial evidence, (ii) that prejudicial error of law was committed, or (iii) that the provisions of the order are arbitrary, capricious, or an abuse of discretion. The appeal must specify upon which of these grounds the appeal is based and must indicate from which provisions of the order the appeal is taken.

(2) Previous motion for relief. An appeal from a denial upon default, a temporary denial, or an indefinite denial will not be entertained unless and until

the respondent has moved unsuccessfully for relief as provided in § 388.4(b), § 388.11(c), or § 388.15 as the case may be.

(b) Filing of appeals. An appeal must be in writing and shall be filed with, and addressed to, the Appeals Board, U.S. Department of Commerce, Washington, D.C. 20230. An appeal from a final order denying export privileges shall be filed within 10 days after receipt of a copy of the order. The provisions of Part 389 of the Export Control Regulations in this subchapter shall govern the procedure and disposition of appeals, except as otherwise provided in this Part 388.

(c) Matters considered on appeal. A hearing before the Appeals Board shall not constitute a trial de novo, but the appeal shall be considered upon the basis of the record, consisting of the charging letter, the transcript of the hearing before the Compliance Commissioner, the report of the Compliance Commissioner, the order of the Director, Office of Export Control, and any other relevant documents involved in the proceedings before the Compliance Commissioner. If the respondent has requested and been denied a rehearing or reopening on the basis of new evidence, the Appeals Board may direct that such rehearing or reopening be granted if it finds that such new evidence is relevant and material to the issues and was not known or was not available to the respondent at the time of the original hearing. The Appeals Board shall not consider facts or arguments affecting the merits of the policy embodied in rules or regulations alleged to have been violated.

(d) Effect of appeal. The taking of an appeal shall not stay the operation of any order. The decision of the Appeals Board shall be final and shall be transmitted promptly to the respondent or his attorney. § 388.14

Proceedings confidential.

Compliance proceedings shall be confidential, excepting any orders issued therein. Reports of the Compliance Commissioner and copies of transcripts of hearings shall be available only to parties to the proceedings and, to the extent of their own testimony as contained in transcripts, to witnesses therein. Any such matters may, however, be made available to any government agency having a proper interest therein.

§ 388.15

Failure to comply with interrogatories or requests to produce evidence-indefinite denial.

(a) Whenever the Office of Export Control finds it impracticable, during the course of an investigation or other proceeding or action, to subpoena a person, or his books, records, other writings, or other tangible things bearing upon the matter being investigated, the Office of Export Control may serve upon such person interrogatories, requests for admissions of facts, requests for the production of books, records, and other writings, or requests to produce or make available other tangible things for inspection, including commodities or technical data exported from the United States, as therein specifically set forth. If such person, within 20 days after service thereof, fails or refuses to furnish responsive answers to such interrogatories or requests for admissions, fails to produce the requested books, records and other writings, or fails to produce or make available for inspection other tangible things requested, including commodities or technical data exported from the United States, which are in his possession, custody or control, without good cause being shown, an order may be issued without prior notice, as provided in § 388.1, denying export privileges to such person. This order shall remain in effect until such person shall respond to the interrogatories or requests or shall give adequate reasons for his failure or refusal to so respond. Such interrogatories or requests may be served in the same manner as provided in § 388.3(b) for service of a charging letter.

(b) The procedure regarding applications for indefinite denial orders and motions to vacate or modify such orders shall conform substantially to that provided for temporary denial orders by § 388.11 (b) (2) and (c).

§ 388.16 Orders containing probationary periods.

(a) Revocation of probationary periods. An order denying export privileges to any person may provide a probationary period during which such denial order is held in abeyance for all or part of the denial period provided by the order, subject to conditions set forth therein. With or without notice to any person to be affected thereby, the Director, Investigations Division, Office of Export Control, may apply to the Compliance Commissioner for an order

revoking such probation period upon a charge that the conditions of such probation have been breached. The facts in support of such application shall be presented to the Compliance Commissioner who shall report thereon, and make a recommendation as to the action to be taken, to the Director, Office of Export Control. The Director, Office of Export Control shall then determine whether the conditions have been breached and issue such order as he may decide is appropriate.

(b) Hearing—(1). Objections upon notice. Any person affected by a notice that an application is being made to revoke a probationary period may, within the time specified in the notice, file with the Compliance Commissioner any objections he may have to the application.

(2) Objections to order without notice. Any person affected by an order revoking a probationary period without notice may request that such order be set aside by filing with the Compliance Commissioner his objections thereto. Such request will not stay the effective date of the order of revocation.

(3) Requirements for filing objection. Objections shall be filed in writing and in duplicate with the Compliance Commissioner. All denials and admissions, as well as the facts of any mitigating circumstances, which the person affected intends to present shall be set forth in or attached to the letter of objection. All contentions must be supported by evidence. A request for an oral hearing may be made at the time of filing such objections.

(4) Determination. The application and any objections thereto shall be referred to the Compliance Commissioner and, if an oral hearing is requested, he shall conduct such hearing at the earliest convenient date. Thereafter he shall report the facts and make a recommendation to the Director of the Office of Export Control, who shall then determine whether the application should be granted or denied. After the Director's determination following either an application on notice for revocation or an application to set aside a revocation, a copy of the order and of the Compliance Commissioner's report shall be sent to any person affected thereby.

(c) Effect of revocation on other actions. The revocation of a probationary period shall not preclude any other action concerning a violation upon which such revocation is based.

§ 388.17 Extension of time.

A respondent may, on good cause being shown, apply to the Compliance Commissioner for additional time within which to prepare and submit his answer to the charging letter or do any other act required by this Part 388.

§ 388.18 Publication of orders.

All orders denying export privileges and all decisions of the Appeals Board in appeals under § 388,13 shall be published in the FEDERAL REGISTER as soon as practicable after issuance; except that such orders and decisions need not be published where they provide for the imposition of a civil penalty alone or as an alternative to the denial of export privileges and where such civil penalty has been paid before the denial of export privileges becomes effective. Copies of all orders and decisions that are not published in the FEDERAL REGISTER are available for public inspection at the Office of the Director, Office of Export Control. Supplement No. 1-Table of Denial and Probation Orders Currently in Effect

(a) Contents. This table lists orders issued by the Office of Export Control that currently deny export privileges and/or place persons or firms on probation. Orders are published in full in the FEDERAL REGISTER, as cited in the column entitled, "Federal Register Citation."

(1) Related parties. Some of the individuals and firms whose names appear in the column entitled "Name and Address" were not found to have violated any law or regulation, but they have been made subject to denial or probation orders pursuant to § 388.1(b). In such cases, an appropriate note appears in the column entitled "Export Privileges Affected."

(2) Probation periods. The basic order denies export privileges to the party or parties named. In some cases, denial of privileges is a combination of immediately effective denial and probation. In other cases, the entire order may be a conditional probation. Probation is always conditioned upon compliance with the law and regulations during the period of probation and it may be revoked summarily in the event of failure to comply. In the column of this table entitled "Expiration Date," the termination date of the period of actual denial appears, and in the event the order contains a probation period, that fact and its expiration date are shown enclosed in parentheses. During the probation period a party is entitled to all export privileges.

(3) Denial Orders-Temporary and Indefinite. The rules provide for temporary and

indefinite orders. The table shows the expiration date of temporary orders in the "Expiration Dates" column as either a specific date, or "Until Further Notice." An indefinite denial order is issued under § 388.15 because of failure to answer interrogatories or produce evidence. The order remains in effect until there is proper response or adequate reasons are given for failure to do so. The expiration date is shown as "Indefinite."

(4) Denial Order for "duration" of export controls. Whenever the word "Duration" is shown in the "Expiration Dates" column of the table it means that a denial order has been issued denying export privileges for the duration of export controls; that is, as long as the Export Administration Act of 1969, or successor legislation that provides for carryover, is in effect.

(5) Proceedings confidential. Proceedings in compliance cases, except for orders which have been published, are confidential.

(6) Publication of orders. New or amended denial and probation orders are published in the FEDERAL REGISTER as they are issued, and their issuance announced in Export Control Bulletins.

The table of Denial and Probation Orders is revised and brought up to date semiannually by adding new or amended orders and deleting orders which have expired. An addendum to the table is published in the Export Control Regulations with the list of orders maintained on a current basis between the semiannual revisions of the table.

(b) Effect of Denial Orders. Section 387.10of the Export Control Regulations makes it unlawful, without prior specific authorization from the Office of Export Control, for any person:

(1) To apply for, obtain, or use any license, Shipper's Export Declaration, bill of lading, or other export control document relating to an export or reexport of commodities or technical data by, to, or for any person subject to a denial order;

(2). To order, buy, receive, use, sell, deliver, store, dispose of, forward, transport, finance, or otherwise service or participate in, any export from the United States or reexport of any commodity or technical data exported or to be exported from the United States, whereby such person denied export privileges may obtain any benefit therefrom or have any interest therein, directly or indirectly.

A denial order applies not only to the persons or firms named in the order, but also to agents and employees and any other person or firm who may be related to them by ownership, control, position of responsibility or other connection in the conduct of trade or related services. Accordingly, if it is known or suspected that a person or firm is related to a party denied export privileges, even though that person or firm is not listed in the denial order, no export transaction may be consummated with or for such person until approval is received from the Office of Export Control.