(b) Each answer shall contain a specific admission, denial, or explanation of each fact alleged in the notice or, if the respondent is without knowledge thereof, a statement to that effect. Allegations of a notice not specifically answered pursuant to this paragraph shall be deemed to have been admitted.

(c) Each answer shall contain a concise statement of each defense or affirmative matter that respondent will present, including a concise statement of the facts upon which it is founded. No defense or affirmative matter of which the respondent was aware at the time of filing his answer but did not include therein may be added by way of amendment or supplemental pleading under §§ 1030.221-1030.223, unless the hearing examiner, in his discretion, is convinced that respondent's failure was justifiable and that the interests of justice require its later admission.

Failure of the respondent to file an answer within the time provided or to appear as ordered shall constitute a waiver of his right to appear and contest the allegations of the notice and shall authorize the Office, without further notice, to find the facts to be as alleged in the notice and to enter findings and an order thereon.

§ 1030.221 Amendments, by leave.

The hearing examiner may, in his discretion, in the interests of justice, to facilitate the determination of a controversy, and upon such terms as are just, allow amendments to the notice or answer at any time prior to the filing of his decision.

form to the evidence and the raising of such issues shall be allowed at any time. § 1030.223 Supplemental pleadings.

The hearing examiner may, in his discretion, in the interests of justice, to facilitate the determination of a controversy, and upon such terms as are just, allow service of a supplemental notice or answer setting forth transactions, occurrences, or events which occurred or were discovered since the date of the notice or answer sought to be supplemented and which are relevant to any of the issues involved in the proceeding. Subpart C-Prehearing Procedures; Motions; Discovery

§ 1030.311 Prehearing conferences.

(a) The hearing examiner may direct any or all parties to meet with him for a conference to consider any or all of the following:

(1) Simplification and clarification of the issues;

(2) Necessity or desirability of amendments to pleadings;

(3) Stipulations or admissions of fact and of the contents, authenticity, and admissibility of documents; and

(4) Such other matters as may aid in the orderly and expeditious disposition of the proceeding, including disclosure of documents or other physical exhibits which will be offered in evidence in the course of the proceeding and of the names of witnesses.

(b) Prehearing conferences shall not be public unless all parties so agree.

(c) The hearing examiner, at his discretion, may direct that the prehearing conference be stenographically reported.

(d) When, as a result of a prehearing conference, it appears to the hearing examiner that the orderly, fair, and expeditious disposition of the proceeding will be aided thereby, he shall enter upon the record an order reciting any and all actions taken as a result of the conference. Insofar as such order states the issues to be resolved in the proceeding or the facts or documents which have been admitted to or stipulated by the parties, such order shall take precedence over any prior pleading or portion of the proceeding.

§ 1030.321 Motions.

(a) While a proceeding is before a hearing examiner all motions must be

addressed to him. Copies of all written motions must be served upon each party.

(b) Motions should, if practicable, be in writing and shall state the particular order, ruling, or action desired and the grounds therefor. However, the hearing examiner may allow oral motions to be made before him, in appropriate cases, when each party affected or to be affected by such motion is present. Oral motions must be made upon the record.

(c) Within ten (10) days after service of any written motion, or within such longer or shorter time as may be fixed by the hearing examiner, the opposing party shall answer. Failure to answer shall constitute consent to the granting of the relief or sanction requested in the motion. The moving party will ordinarily have no right to reply.

(d) As a matter of discretion, the hearing examiner may waive the requirements of paragraphs (a) through (c) of this section as to motions for extensions of time and he may rule upon such motions ex parte.

(e) The hearing examiner shall rule, either in writing or upon the record, upon all motions presented to him. No formal opinion or findings are required on any motion.

§ 1030.326 Interlocutory appeals.

No interlocutory appeal to the decision officer (see § 1030.510) will be allowed from any decision of the hearing examiner unless the hearing examiner certifies that the ruling involves an important question of law that should be resolved at that time.

(a) The Federal Rules of Civil Procedure shall apply to discovery proceedings. There will be no fixed rule on priority of discovery.

(b) Discovery (including requests for admission) and compulsory process for discovery shall be available to the parties to a formal administrative proceeding under this part. Upon written motion pursuant to § 1030.321, the hearing examiner shall promptly rule upon any objection to discovery action initiated pursuant to this section. The hearing examiner shall also have the power to grant a protective order or relief to any party or third party subjected to discovery or compulsory process for discovery.

Subpart D-Hearings

§ 1030.411 Public hearings.

All hearings in formal administrative proceedings shall be public unless otherwise ordered by the hearing examiner. § 1030.412 Expedition of hearings.

Hearings shall proceed with all reasonable expedition, be held at one place, and continue without suspension until concluded, unless the hearing examiner otherwise. specifically provides The hearing examiner may, in the interests of justice, in order to assure full and fair presentation of the issues, and consistent with the public interest in the expeditious administration and enforcement of the Program, order brief intervals in any proceeding. In unusual and exceptional circumstances, for good cause stated on the record, he shall have the authority to order hearings at more than one place and to order brief intervals to permit discovery necessarily deferred during the prehearing procedures. § 1030.413 Rights of parties.

Every party shall have the right of representation by counsel, due notice, presentation of evidence, objection, cross-examination, motion argument, determination upon a record, and all other rights essential to a fair hearing. § 1030.414 Examination of witnesses.

An adverse party, or an officer, agent, or employee thereof, and any witness determined by the hearing examiner to be hostile, unwilling, or evasive, may be interrogated by leading questions. Any witness may be contradicted and impeached by any party, including the party calling him.

§ 1030.415 Admissibility of evidence.

Technical rules of evidence shall not apply in proceedings under this part. Relevant, material, and reliable evidence shall be admitted. Irrelevant, immaterial, unreliable, and unduly repetitious evidence shall be excluded. Immaterial or irrelevant parts of admissible documents shall be segregated and excluded so far as practicable.

§ 1030.416 Objections.

Objections to evidence shall be timely and shall briefly state the grounds relied upon but the transcript shall not include argument or debate thereon except as

ordered by the hearing examiner. The hearing examiner shall, when requested by a party, rule upon the record on any properly presented objection, or specifically defer such ruling. Any objection not ruled upon shall be deemed overruled. The substance of any overruled objection shall be deemed preserved without formal exception.

§ 1030.417 Burden of proof.

Counsel representing the Compliance Division shall have the burden of persuasion and the burden of going forward with evidence to show, prima facie, that respondent failed to comply with a requirement of the Program, but the proponent of any proposition shall be required to sustain the burden of persuasion and the burden of going forward with evidence with respect thereto.

§ 1030.418 Use of information obtained in investigations.

Any documents, papers, books, physical exhibits, or other materials or information obtained by the Office under any of its powers may be disclosed by counsel representing the Compliance Division when necessary in connection with formal administrative proceedings and may be offered in evidence by such counsel in any such proceeding.

§ 1030.421 Transcript.

Hearings shall be stenographically recorded and transcribed by a reporter under the supervision of the hearing examiner. The original transcript shall be a part of the record and the sole official transcript.

§ 1030.422 Record.

The record shall include the pleadings, all motions, all orders of the hearing examiner, the original transcript, all exhibits offered in evidence by any party, all proposed findings of fact, conclusions, and orders, and the recommended decision and proposed order of the hearing examiner. Except as provided under § 1030.451, the record shall be open to public inspection during business hours at the Department of Commerce, Office of Foreign Direct Investments, upon application therefor to the Clerk. § 1030.423 Excluded evidence.

When an objection to a question propounded to a witness is sustained, the examining attorney may make a specific offer on the record of what he expected to prove by the answer of the witness, or

the hearing examiner may, in his discretion, hear and record the evidence in full. Rejected exhibits, adequately marked for identification, and other rejected evidence shall be retained in the record and be available for consideration by any reviewing authority.

§ 1030.431 Hearing examiners.

(a) Hearings and prehearing matters in formal administrative proceedings shall be presided over by a hearing examiner appointed or designated pursuant to section 3105 or section 3344 of title 5, United States Code.

(b) The hearing examiner for prehearing matters may differ from the hearing examiner presiding over the hearing. A hearing examiner who opens the hearings under a particular notice shall, in the ordinary course, be the solc hearing examiner for such hearings, but, in the event of the death, illness, or other unavailability of a hearing examiner, or other extenuating and unusual circumstances, another hearing examiner may be appointed as provided in paragraph (a) of this section.

(c) In the event of the substitution of a new hearing examiner for the one originally designated, any motion predicated upon such substitution shall be made within five (5) days following notice of such substitution. § 1030.433

Powers and duties.

Hearing examiners shall conduct fair and impartial hearings, take all necessary action to avoid delay in the disposition of proceedings, and maintain order. They shall have all powers necessary and appropriate to that end, including, but not limited to, the following:

(a) To administer oaths and receive affirmations;

(b) To issue compulsory process;

(c) To take depositions or to order depositions or other discovery procedures as provided in § 1030.331;

(d) To rule upon offers of proof and receive evidence;

(e) To regulate the course of the hearings and the conduct of the parties and their counsel therein;

(f) To hold conferences for stipulations, simplification of issues, settlement, or any other proper purpose;

(g) To consider and rule upon, as justice may require, all procedural and other motions;

(h) To make findings of fact and conclusions of law and to issue recom

mended decisions and proposed orders and

(i) To take any action authorized by the rules in this part or in conformance with law.

§ 1030.434 Suspension of attorneys.

(a) The hearing examiner shall have the authority, for good cause stated on the record, to suspend or bar from participation in a particular proceeding any attorney who shall refuse to comply with his direction, or who shall be guilty of disorderly, dilatory, obstructive, or contumacious conduct in the course of such proceeding.

(b) Any attorney so suspended or barred may appeal to the decision officer. Appeals shall be in the form of a brief, not to exceed ten (10) pages in length and shall be filed within five (5) days after notice of the hearing examiner's action. Answer thereto may be filed within five (5) days after service of the appeal brief and may not exceed ten (10) pages. The decision of the decision officer shall constitute final agency action. The appeal shall not operate to suspend the hearing unless otherwise ordered by the decision officer. In the event the hearing is not suspended, the attorney may continue to participate therein pending disposition of the appeal.

§ 1030.451 In camera policy.

(a) Hearing examiners shall have the authority, for good cause stated on the record, to order any documents, or oral testimony, or other matter offered in evidence, whether admitted or rejected, to be placed in camera.

(b) Except as provided in paragraph (c) of this section, matter placed in camera is kept confidential and is not part of the public record. Only the respondent, his counsel, authorized personnel of the Office and court personnel concerned with judicial review shall have access to such matter. Where it is appropriate, in order to protect a trade secret or other confidential business information, the hearing examiner may enter other orders necessary and appropriate to protect such information from misuse.

(c) The power of the hearing examiner, the Office and reviewing courts to disclose in camera matter to the extent necessary for the proper disposition of a proceeding is specifically reserved.

§ 1030.461 Submission by the parties of proposed findings, conclusions, and order.

(a) Within such time after the close of the reception of the evidence as the hearing examiner may fix, each party to a proceeding under this part shall file with the hearing examiner for his consideration all proposed findings of fact, conclusions of law, and forms of order, together with briefs in support thereof. Answering briefs may be filed within a reasonable time thereafter, as fixed by the hearing examiner. The hearing examiner, in his discretion, may vary the sequence of filing documents following the close of reception of evidence.

(b) Such proposed findings, conclusions, and orders and any briefs or other papers shall be in writing, shall be served upon all parties, and shall contain adequate references to the record and authorities relied on. "Passim" references to the record may not be used.

(c) If a party fails to file a proposed finding as to any fact involved in the proceeding, or a proposed conclusion of law as to any legal question raised by the proceeding, he shall be deemed to have waived any objections or contentions with regard to that fact or that question of law.

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

(a) Within a reasonable time after receipt of all briefs and/or other papers pursuant to § 1030.461, the hearing examiner who presided, unless he shall become unavailable to the Office, shall make findings of fact and conclusions of law and issue a recommended decision and proposed order. The findings, conclusions, recommended decision and proposed order shall be served upon the parties and shall be included in the record.

(b) The findings of fact and conclusions of law shall be numbered and shall contain appropriate references to the record.

issue a proposed order taking into account, in fashioning said proposed order, the nature and circumstances of the violation as well as the importance of encouraging future good faith efforts to comply with the Program. Where appropriate (including, but not limited to, cases where the respondent's violation involves positive direct investment or the holding of liquid foreign balances under circumstances where such is prohibited or in excess of the amount generally and/or specifically authorized or failure to comply with conditions of specific authorizations, and/or willful failure to or delay in filing required reports) the proposed order may include in addition to any other appropriate remedies:

(1) Reduction during any year or years in the amount of positive direct investment and/or liquid foreign balances that would have been authorized to the respondent under Part 1000 of this chapter;

(2) A requirement that the respondent repatriate all or part of its share in the earnings of incorporated affiliated foreign nationals, which repatriation shall be disregarded for the purpose of measuring compliance with the provisions of Part 1000 of this chapter;

(3) A requirement that the respondent cause its affiliated foreign nationals to make transfers of capital to the respondent, which transfers shall be disregarded for the purpose of measuring compliance with the provisions of Part 1000 of this chapter;

(4) A requirement that the respondent repatriate available proceeds of long-term foreign borrowing, which proceeds may not be held thereafter in the form of foreign balances or other foreign property;

(5) A requirement that quarterly or other special reports be filed with the Office containing such information as may be appropriate.

Subpart E-Decision and Review

§ 1030.510 Decision officer: designation and disqualification.

(a) The Director of the Office shall be the decision officer unless he is unavailable by reason of disqualification or otherwise, in which case the Deputy Director of the Office shall be the decision officer.

(b) The decision officer shall withdraw from any case when he is disqualified by reason of personal relationship or interest or other just cause. If the deci

sion officer has not withdrawn from the case and respondent believes that grounds for disqualification exist, respondent shall submit, with its first brief submitted pursuant to § 1030.511, a motion supported by an affidavit or affidavits specifying such grounds with particularity. In such case, the decision officer shall himself rule upon the motion in writing and his decision shall become part of the record of the case.

(c) If both the Director and the Deputy Director of the Office are disqualified or otherwise unavailable, the Appeals Board for the Department of Commerce shall perform the functions of the decision officer under the rules contained in this subpart, and the decision and order of the Appeals Board shall constitute the final agency action.

(a) Any party in a proceeding under this part may file specific objections to the hearing examiner's findings of fact, conclusions of law, recommended decision and/or proposed order, provided that notice of intent to file such objections is filed with the Office within ten (10) days after service upon the parties of the hearing examiner's recommended decision and proposed order.

(b) Objections shall be in the form of a brief, not to exceed thirty (30) pages, filed no later than thirty (30) days after service of the hearing examiner's recommended decision and proposed order. Answering briefs, not to exceed thirty (30) pages, shall be filed not later than thirty (30) days after the closing date for submission of each objections. Reply briefs, not to exceed fifteen (15) pages, shall be filed not later than seven (7) days after the closing date for submission of answering briefs. Briefs, if typewritten, shall be double spaced.

(c) The briefs shall be made a part of the record and the entire record shall then be certified promptly to the decision officer.

(d) If no notice of intent to file objections to the hearing examiner's findings of fact, conclusions of law, recommended decision or proposed order are filed within the time provided in paragraph (a) of this section, the record shall be certified at the conclusion of such time to the decision officer who shall decide the case in the manner provided in § 1030.513 (b). The decision officer may, at his discretion, request the parties to submit