[Code of Federal Regulations]
[Title 39, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 39CFR501.6]

[Page 162-164]
 
                        TITLE 39--POSTAL SERVICE
 
                 CHAPTER I--UNITED STATES POSTAL SERVICE
 
PART 501_AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE
 
Sec.  501.6  Suspension and revocation of authorization.

    (a) The Postal Service may suspend and/or revoke authorization to 
manufacture and/or distribute any or all of a provider's approved 
Postage Evidencing System(s) if the provider engages in any unlawful 
scheme or enterprise, fails to comply with any provision in this Part 
501, fails to implement instructions issued in accordance with any final 
decision issued by the Postal Service within its authority over Postage 
Evidencing Systems or if the Postage Evidencing System or infrastructure 
of the provider is determined to constitute an unacceptable risk to 
Postal Service revenues.

[[Page 163]]

    (b) The decision to suspend or revoke pursuant to paragraph (a) of 
this section shall be based upon the nature and circumstances of the 
violation (e.g. whether the violation was willful, whether the provider 
voluntarily admitted to the violation, or cooperated with the Postal 
Service, whether the provider implemented successful remedial measures) 
and on the provider's performance history. Before determining that a 
provider's authorization to manufacture and/or distribute Postage 
Evidencing Systems should be suspended or revoked, the procedures in 
paragraph (c) of this section shall be followed.
    (c) Suspension or revocation procedures:
    (1) Upon determination by the Postal Service that a provider is in 
violation of provisions of this Part 501, or that its Postal Evidencing 
System poses an unreasonable risk to postal revenue, PTM, acting on 
behalf of the Postal Service shall issue a written notice of proposed 
suspension citing the specific conditions or deficiencies for which 
suspension of authorization to manufacture and/or distribute a specific 
Postage Evidencing System or class of Postage Evidencing Systems may be 
imposed. Except in cases of willful violation, the provider shall be 
given an opportunity to correct deficiencies and achieve compliance with 
all requirements within a time limit corresponding to the potential 
revenue risk to postal revenue.
    (2) In cases of willful violation, or if the Postal Service 
determines that the provider has failed to correct cited deficiencies 
within the specified time limit, PTM shall issue a written notice of 
suspension setting forth the facts and reasons for the decision to 
suspend and the effective date if a written defense is not presented as 
provided in paragraph (d) of this section.
    (3) The notice shall also advise the provider of its right to file a 
response under paragraph (d) of this section. If a written response is 
not presented in a timely manner the suspension may go into effect. The 
suspension shall remain in effect for ninety (90) calendar days unless 
revoked or modified by PTM.
    (4) If, upon consideration of the defense as provided in paragraph 
(d) of this section, the Postal Service deems that the suspension is 
warranted, the suspension shall remain in effect for up to 90 days 
unless withdrawn by the Postal Service, as provided in paragraph 
(c)(5)(iii) of this section.
    (5) At the end of the ninety (90) day suspension, the Postal Service 
may:
    (i) Extend the suspension in order to allow more time for 
investigation or to allow the provider time to correct the problem.
    (ii) Make a determination to revoke authorization to manufacture 
and/or distribute a Postage Evidencing System in part or in whole.
    (iii) Withdraw the suspension based on identification and 
implementation of a satisfactory solution to the problem.
    (d) The provider may present the Postal Service with a written 
defense to any suspension or revocation determination within thirty (30) 
calendar days of receiving the written notice (unless a shorter period 
is deemed necessary). The defense must include all supporting evidence 
and state with specificity the reasons why the order should not be 
imposed.
    (e) After receipt and consideration of the defense, PTM shall advise 
the provider of its decision and the facts and reasons for it. The 
decision shall be effective on receipt unless provided otherwise. The 
decision shall also advise the provider that it may be appealed within 
thirty (30) calendar days of receipt (unless a shorter time frame is 
deemed necessary). If an appeal is not filed in a timely manner, the 
decision of PTM shall become a final decision of the Postal Service. The 
appeal may be filed with the Chief Marketing Officer of the Postal 
Service and must include all supporting evidence and state with 
specificity the reasons the provider believes that the decision is 
erroneous. The decision of the Chief Marketing Officer shall constitute 
a final decision of the Postal Service.
    (f) An order or final decision under this section does not preclude 
any other criminal or civil statutory, common law, or administrative 
remedy that is available by law to the Postal

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Service, the United States, or any other person or entity.