[Code of Federal Regulations]
[Title 15, Volume 1]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 15CFR21.4]

[Page 198-199]
 
                  TITLE 15--COMMERCE AND FOREIGN TRADE
 
PART 21--ADMINISTRATIVE OFFSET--Table of Contents
 
Sec. 21.4  Notification requirements before offset.

    A debt is considered delinquent by the Department if it is not paid 
within 15 days of the due date, or if there is no due date, within 30 
days of the billing date.
    (a) The Departmental unit head (and designees) responsible for 
carrying out the provisions of this subpart with respect to the debt 
shall ensure that appropriate written demands are sent to the debtor in 
terms which inform the debtor of the consequences of failure to 
cooperate in payment of the debt. The first demand letter should be sent 
within ten (10) days after the date the debt becomes delinquent. A total 
of three progressively stronger written demand letters, at not more than 
30 calendar day intervals, will normally be made unless (1) a response 
to the first or second demand indicates that a further demand would be 
futile; (2) the debtor's response does not require any or immediate 
rebuttal; and/or (3) the bureau determines to pursue offset under the 
procedures specified in 4 CFR 102.3, Collection by Administrative 
Offset. In determining the timing of the demand letters, Departmental 
unit heads should give due regard to the need to act promptly; so as a 
general rule, if it is necessary to refer the debt to the Department of 
Justice for action, such referral can be made within one year of the 
final determination of the facts and the amount of the debt. When 
Departmental unit heads (and designees) deem it appropriate to protect 
the Government's interests (for example, to prevent the statute of 
limitations, 28 U.S.C. 2415, from expiring), written demand for payment 
may be preceded by other appropriate collection actions (also see 
Sec. 21.10(c)).
    (b) The Department official responsible for collection of the debt 
(generally an accounting or finance officer) shall ensure that an 
initial written demand notice is sent to the debtor, informing such 
debtor of:
    (1) The amount and basis for the indebtedness and whatever rights 
the debtor may have to seek review within the Department;
    (2) The applicable standards for assessing interest, penalties, and 
administrative costs (4 CFR 102.13);
    (3) That the debtor has a right to inspect and copy Department 
records related to the debt, as determined by responsible Departmental 
official(s), and that such request to inspect and copy must be 
postmarked or received by the

[[Page 199]]

Department no later than 30 days after the date of the (first) demand 
letter;
    (4) The name, mailing address, and telephone number of the 
Department workout group employee who can provide a full explanation of 
the claim and answer all related questions, as well as explain 
procedures to the debtor for inspecting and copying records related to 
the debt.
    (c) The responsible Department officials shall exercise due care to 
insure that demand letters are mailed or hand delivered on the same day 
that they are actually dated. If evidence suggests that the debtor is no 
longer located at the address of record, reasonable action shall be 
taken by the Departmental unit workout group to obtain a current 
address, including skip-trace assistance from the Internal Revenue 
Service and/or private sector credit reporting bureaus.
    (d) Where applicable, the Departmental unit workout group must 
inform the debtor in a second demand letter, (Notice of Intent) of:
    (1) The nature and amount of the debt;
    (2) That the Department intends to collect the debt by 
administrative offset until the debt and all accumulated interest and 
other charges are paid in full;
    (3) That the debtor has a right to obtain review within the 
Department of the initial determination of indebtedness, and that such 
request to have a review of the basis of indebtedness must be postmarked 
or received by the Department no later than 30 days after the date of 
the second demand letter (Notice of Intent); and
    (4) That the debtor may enter into a written agreement with the 
responsible Department official(s) to repay the debt if such a request 
is made and received by the Department no later than 30 days after the 
date of the second demand letter (Notice of Intent).

If the sum of the proposed offset does not fully cover the amount of the 
debt owed, the Departmental unit workout group shall also include in 
this second demand letter (Notice of Intent) the notice provisions to 
debtors required by the Debt Collection Act of 1982, and other 
regulations of the Department, pertaining to disclosure of the 
delinquent debt to credit reporting agencies, referral to private 
collection agencies, salary offset, possible Internal Revenue Service 
offset of tax refunds, and referral of the debt to the Justice 
Department for action to the extent inclusion of such is appropriate and 
practical.
    (5) That if payment or a request for review is not received within 
the 30-day period, the offset process will be initiated.