[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR501.707]

[Page 571-572]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
 CHAPTER V--OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY
 
PART 501_REPORTING, PROCEDURES AND PENALTIES REGULATIONS--Table of Contents
 
          Subpart D_Trading With the Enemy Act (TWEA) Penalties
 
Sec. 501.707  Response to Prepenalty Notice.

    (a) Deadline for response.
    (1) The respondent shall have 60 days after the date of service of 
the Prepenalty Notice pursuant to Sec. 501.705(a) to respond thereto. 
The response, signed and dated, shall be served as provided in Sec. 
501.705(b).
    (2) In response to a written request by the respondent, the Director 
may,

[[Page 572]]

at his or her discretion for the purpose of conducting settlement 
negotiations or for other valid reasons, grant additional time for a 
respondent to submit a response to the Prepenalty Notice.
    (3) The failure to submit a response within the time period set 
forth in this paragraph (a), including any additional time granted by 
the Director, shall be deemed to be a waiver of the right to respond to 
the Prepenalty Notice.
    (b) Form and contents of response.
    (1) In general. The response need not be in any particular form, but 
must be typewritten and contain the heading ``Response to Prepenalty 
Notice'' and the Office of Foreign Assets Control identification number 
shown near the top of the Prepenalty Notice. It should be responsive to 
the allegations contained therein and set forth the nature of the 
respondent's admission of the violation, or defenses and claims for 
mitigation, if any.
    (i) The response must admit or deny specifically each separate 
allegation of violation made in the Prepenalty Notice. If the respondent 
is without knowledge as to an allegation, the response shall so state, 
and such statement shall constitute a denial. Any allegation not 
specifically addressed in the response shall be deemed admitted.
    (ii) The response must set forth any additional or new matter or 
arguments the respondent seeks, or shall seek, to use in support of all 
defenses or claims for mitigation. Any defense the respondent wishes to 
assert must be included in the response.
    (iii) The response must accurately state (for each respondent, if 
applicable) the respondent's full name and address for future service, 
together with a current telephone and, if applicable, facsimile machine 
number. If respondent is represented, the representative's full name and 
address, together with telephone and facsimile numbers, may be provided 
instead of service information for the respondent. The respondent or 
respondent's representative of record is responsible for providing 
timely written notice to the Director of any subsequent changes in the 
information provided.
    (iv) Financial disclosure statement requirement. Any respondent who 
asserts financial hardship or an inability to pay a penalty shall 
include with the response a financial disclosure statement setting forth 
in detail the basis for asserting the financial hardship or inability to 
pay a penalty, subject to 18 U.S.C. 1001.
    (2) Settlement. In addition, or as an alternative, to a written 
response to a Prepenalty Notice, the respondent or respondent's 
representative may seek settlement of the alleged violation(s). See 
Sec. 501.710. In the event of settlement prior to the issuance of a 
Penalty Notice, the claim proposed in the Prepenalty Notice will be 
withdrawn and the respondent will not be required to make a written 
response to the Prepenalty Notice. In the event no settlement is 
reached, a written response to the Prepenalty Notice is required 
pursuant to paragraph (c) of this section.