The Office1 may, in its discretion, initiate investigations relating to compliance by any person 2 with the Foreign Direct Investments Program (hereinafter referred to as the Program) as embodied in E.O. 11387 and Part 1000 of this chapter, any rule, regulation, or order thereunder, term or condition of any authorization or exemption issued thereunder, any decree of court relating thereto, or any other agency action thereunder.

§ 1020.112 Investigative policy.

The Office encourages voluntary cooperation with its investigations. Where the circumstances appear so to require,

1 As used in Parts 1020-1050 of this chapter, the "Office" means the Office of Foreign Direct Investments, U.S. Department of Commerce.

2 As used in Parts 1020-1050 of the chapter, "person" means any individual, corporation, partnership, business venture, trust, or Єstate.

however, the Office may invoke compulsory process as authorized by law. § 1020.113 By whom conducted.

Investigations will be conducted by representatives of the Office duly designated and authorized for the purpose. Such representatives are authorized, among other things, to administer oaths and receive affirmations in any matter under investigation by the Office.

§ 1020.114 Notification of purpose.

Any person under investigation who is compelled or requested to furnish information or documentary evidence shall be advised with respect to the general purpose for which such information or evidence is sought.

(a) The Office may issue orders requiring any person or persons named therein:

(1) To appear before a designated representative at a designated time and place to testify, produce documentary evidence, and/or produce other information relating to any transaction involving foreign direct investment; and/or

(2) To file (whether on a continuing basis, at stated intervals, upon the occurrence of specified acts or omissions, or otherwise) reports or answers in writing to specified questions, relating to any matter that is or has been under investigation or inquiry, or is likely to lead to the production of information relating to any such matter.

(b) Any person required to submit any report, whether under this section or under § 1000.602 (b) of this chapter, shall preserve, or cause to be preserved, for at least 3 years after the date of filing of such report all working papers, irrespective of by whom prepared, used in the preparation of such report; all exhibits, all schedules, and all attachments to such papers; and all books and all records related to such report or to such other papers, that were prepared in the ordinary course of business.

§ 1020.122 Authority to initiate investigations and to issue or modify agency process.

The Director of the Compliance Division is hereby delegated, without power of redelegation, the authority to initiate investigations under § 1020.111 and to issue orders under § 1020.121 and, for good

cause shown, to limit, quash, modify, or withdraw such orders or to extend the time prescribed therein for compliance. § 1020.123 Motions relating to agency

process.

Any motion to limit, quash, modify, or withdraw any order issued under § 1020.121 or to extend the time prescribed for compliance must be filed with the Office (to the attention of the person issuing said order) within seven (7) days after service of such order, or, if the return date is less than seven (7) days after service of the order, within such other time prior to the return date as may be designated in such order. Any allegation of undue burden must be accompanied by an affidavit setting forth with particularity the supporting facts. § 1020.124 Review; finality.

(a) Upon denial of a motion made under § 1020.123, the moving party may appeal to the decision officer pursuant to the procedure set out in § 1030.514 of this chapter. The determination of the decision officer shall constitute final agency action.

(b) The Director of the Compliance Division may extend the return date specified in an order issued pursuant to § 1020.121 by up to twenty (20) days later than the date of denial of relief under paragraph (a) of this section where:

(1) Such relief is requested by motion under § 1020.123 for the purpose of seeking judicial review of the order without first committing a willful violation thereof, and

(2) The public interest in effective enforcement and administration of the Program will not be compromised thereby.

§ 1020.131

Investigative hearings.

(a) The Office may conduct investigative hearings in the course of any investigation or inquiry relating to the administration or enforcement of the Program, as described in § 1020.111, including inquiries initiated for the purpose of determining whether to institute a proceeding under Part 1030 of this chapter.

(b) Investigative hearings shall be nonadjudicative proceedings, presided over by a representative of the Office (hereinafter referred to as the "presiding official") designated in the order issued pursuant to § 1020.121.

(c) Investigative hearings shall be stenographically recorded unless the presiding official, in his discretion upon the request of a witness, otherwise orders.

(d) Unless otherwise ordered by the Director of the Office, investigative hearings shall not be public.

§ 1020.132 Rights of witnesses in investigations.

Any person compelled or requested to submit information to the Office, or to testify in an investigative hearing, shall be entitled to be accompanied, represented, and advised by counsel or another person who has entered an appearance under § 1050.101 of this chapter (referred to hereafter in this section as "counsel") as follows:

(a) Counsel for a witness may advise his client, in confidence, and upon the initiative of either himself or the witness, with respect to any question asked of his client. If it appears that counsel is prompting the witness under color of this paragraph, the presiding official will so note and take appropriate action in respect thereto under paragraph (f) of this section. If, upon advice of counsel, the witness refuses to answer a question, counsel may briefly state that he has advised his client not to answer the question and the legal grounds for such refusal.

(b) Where it is claimed that the testimony or other evidence sought is outside the scope of the investigation, or that the witness is privileged to refuse to to answer a question or to produce other evidence, counsel for the witness may object and briefly and precisely state the grounds therefor.

(c) Cumulative objections are unnecessary. Repetition of the grounds for any objection will not be allowed. At the request of counsel and/or when directed by the presiding official, any objections will be treated as continuing objections and preserved throughout the further course of the hearings as to any related line of inquiry.

(d) Any motion challenging the Office's authority to conduct the investigation or the sufficiency or legality of the order to testify or produce documents or other information must have been addressed to the Office prior to the hearing (see § 1020.123). Additional copies of such motions may be filed with the presiding official as part of the record of the investigation and may be incorporated

by reference into counsel's statements or objections, but no arguments in support thereof will be allowed at the hearing.

(e) After the presiding official and/or counsel for the Compliance Division have completed the examination of a witness, counsel for the witness may request the presiding official to permit the witness to clarify any of his answers in order that they may not remain equivocal or incomplete. The granting or denial of such request shall be within the sole discretion of the presiding official, and any grant may be withdrawn if counsel attempts to lead the witness or suggest

66-032-72-29

When the Office has reason to believe that any person subject to the jurisdiction of the Office (referred to hereinafter in this part as a "party") has violated any requirement of the Program, the Office may initiate enforcement action. Sections 5(b) (3) and 17 (as amended) of the Act of October 6, 1917 (50 U.S.C. App. 5(b) (3) 17), permit either criminal or civil sanctions, and Part 1030 of this chapter provides for formal administrative proceedings. Ordinarily, in the absence of willful violation or flagrant disregard of Program requirements, the Office will utilize one of the settlement procedures described in this part when such resolution is deemed to be in the public interest. § 1025.211

ment.

Informal, voluntary settle

(a) Policy. In determining whether to afford a party the opportunity for informal, voluntary settlement, the Office will consider the following:

(1) Whether the party acted in good faith;

(2) Whether the alleged noncompliance was unintentional or unforeseeable and whether the party took steps to avoid the alleged noncompliance;

(3) Whether the party cooperated with the office in ascertaining the facts and did not attempt to conceal or falsify information;

(4) The nature of the alleged noncompliance;

(5) The prior conduct of the party with respect to Program requirements; and

(6) Other relevant factors, including whether the Office believes that the party's assurances of future compliance with the Program will be adequate to ensure such compliance.

(b) Investigation. In addition to any investigation the Office may conduct into the substantive nature of the noncompliance, the Office may conduct an independent inquiry regarding any or all of the items enumerated in paragraph (a) of this section.

(c) Conference policy. It is the policy of the Office to give any party the opportunity to discuss with the staff, on an informal basis, the possible settlement of any compliance investigation involving such party. Ordinarily, any request for such discussion should be directed, in the first instance, to the staff member responsible for conducting the investigation.

(d) Form. (1) Disposition of a matter by an informal settlement will be in the form of an exchange of agreed-upon letters passing between the party and the Office. The letter from the Office will be signed by the Director of the Office.

(2) The letter from the party to the Office will set forth the pertinent circumstances relating to and constituting the alleged noncompliance, the steps taken to undo, correct, and prevent its recurrence and other matters agreed upon by the party and Office. The letter from the Office to the party will state the intention of the Office, based on the representations in the party's letter, to close the matter; however, the Office will expressly reserve the power to reopen the matter should the public interest so require.

§ 1025.311

Consent agreement policy and procedures.

(a) Preliminary Notice. If the Office, in its discretion, determines that informal, voluntary settlement is inappropriate, it will, where time, the nature of the matter involved, and the public interest permit, notify the party (i) of its intention to institute a formal proceeding against the party and (ii) that the party will be afforded an opportunity to confer with the Office staff and to submit an appropriate consent agreement proposal for consideration by the Office. Such notice may be in the form specified in § 1030.211 of this chapter or, in the discretion of the Office, in such other form sufficient to apprise the party of the nature of the alleged noncompliance. The party may appear personally or he may be represented by a person who has entered an appearance under § 1050.101 of this chapter.

(b) Conditions. The Office will consider each such case individually, on the basis of all relevant facts and circumstances, including any mitigating or extenuating factors. Depending upon the circumstances of the case, administrative settlement of compliance matters

by a consent agreement may entail one or more of the remedies set forth in § 1030.472 of this chapter.

(c) Form of agreement. (1) Every consent agreement tendered by a party shall contain ar appropriate form of order or judgment to be entered, an admission of all jurisdictional facts, and express waivers of further procedural steps, of any requirement of findings, and of rights to seek any form of judicial or appellate review or otherwise to challenge or contest the content, validity, or finality of the order. In addition, such proposed agreement may contain a statement that the signing thereof is for settlement purposes only and does not constitute an admission by the party that the law has been violated.

(2) The Office will determine whether the public interest would be better served by an agreement providing for an administrative consent order or a judicial consent judgment. Among the factors that the Office will ordinarily consider in making such determination are: (i) The nature and gravity of the alleged noncompliance, (ii) the prior conduct of the party with respect to Program requirements and (iii) the likelihood that subsequent enforcement proceedings against the party will be necessary.

Submission by the parties of proposed findings, conclusions, and order.

1030.471 Hearing examiner's findings, conclusions, recommended decision and proposed order.

1030.472 Form of proposed order.

Subpart E-Decision and Review

1030.510 Decision officer: designation and disqualification. Objections. Decision.

1030.511 1030.513

1030.514 Appeals from orders under Part 1020 of this chapter.

1030.515 Petition for reconsideration.

AUTHORITY: The provisions of this Part 1030 issued pursuant to sec. 5 of the Act of Oct. 6, 1917, 40 Stat. 415, as amended, 12 U.S.C. 95a; E.O. 11387, Jan. 1, 1968, 33 F.R. 47; Department Organization Order 25-3A (formerly Department Order 184-A), Jan. 1, 1968, 33 F.R. 54.

SOURCE: The provisions of this Part 1030 appear at 36 F.R. 5587, Mar. 25, 1971, unless otherwise noted.

Subpart A-General Policies and Procedures; Scope of Rules

The Office may institute a formal administrative proceeding when, on the basis of facts known to the Office, there is reason to believe that any person (hereinafter referred to as "respondent") has violated any requirement of the Program. Such proceedings may include, but are not limited to, allegations that the respondent has failed to comply with or is in violation, willfully or otherwise, of any such agency action; or that the respondent has made a transaction with intent to evade any requirement of the Program. Such proceedings shall be conducted in accordance with procedures that will assure due process of law to any party who may be adversely affected because of the determination therein.

§ 1030.112 Scope of the rules in this part.

(a) The rules in this part govern procedure in formal administrative proceedings described in § 1030.111.

(b) Except as specifically provided, the rules in this part do not govern any other proceedings, such as negotiations for the entry of consent orders, investigative hearings pursuant to § 1020.131 of this chapter, applications for specific authorizations or exemptions, or promulgation of substantive rules and regulations, general bulletins, interpretative opinions, or other rule making procedures.

Subpart B-Notice; Answer; Other Pleadings

A formal administrative proceeding is commenced by the issuance and service of a notice, signed by the Director of the Office, containing the following:

(a) A clear and concise statement of facts sufficient to inform the respondent with reasonable definiteness of the type of acts or practices alleged to constitute a violation;

(b) Designation of specific requirements of the Program actions alleged to have been violated;

(c) A statement that the notice has been issued upon representations of the Director of the Compliance Division as summarized in the notice, and that respondent will have the opportunity to controvert the same;

(d) The substance of §§ 1030.212 and 1030.213;

(e) Specification of the time and place for hearing, such time to be at least twenty (20) days after service of the notice unless it is found and so stated in the notice that the public interest requires a shorter period;

(f) Identification of the person who will preside over the hearing and/or prehearing matters (hereinafter referred to as the "hearing examiner") and of the representative or representatives of the Compliance Division designated to prosecute the matter;

(g) A form of order which the Office has reason to believe should issue if the facts are found to be as alleged in the notice; and

(h) Recital of the legal authority and jurisdiction for institution of the proceeding.