**TITLE 22\--FOREIGN RELATIONS**

**CHAPTER I\--DEPARTMENT OF STATE**

## PART 128 \-- ADMINISTRATIVE PROCEDURES

**Section Contents**\
§ 128.1   Exclusion of functions from the Administrative Procedure Act.\
§ 128.2   Administrative Law Judge.\
§ 128.3   Institution of Administrative Proceedings.\
§ 128.4   Default.\
§ 128.5   Answer and demand for oral hearing.\
§ 128.6   Discovery.\
§ 128.7   Prehearing conference.\
§ 128.8   Hearings.\
§ 128.9   Proceedings before and report of Administrative Law Judge.\
§ 128.10   Disposition of proceedings.\
§ 128.11   Consent agreements.\
§ 128.12   Rehearings.\
§ 128.13   Appeals.\
§ 128.14   Confidentiality of proceedings.\
§ 128.15   Orders containing probationary periods.\
§ 128.16   Extension of time.\
§ 128.17   Availability of orders.

**Authority:**   Secs. 2, 38, 40, 42, and 71, Arms Export Control Act.
90 Stat. 744 (22 U.S.C. 2752, 2778, 2780, 2791, and 2797); E.O. 11958,
42 FR 4311; 22 U.S.C. 2651a; E.O. 12291, 46 FR 1981.

**Source:**   58 FR 39320, July 22, 1993, unless otherwise noted.

##### § 128.1   Exclusion of functions from the Administrative Procedure Act.

The Arms Export Control Act authorizes the President to control the
import and export of defense articles and services in furtherance of
world peace and the security and foreign policy of the United States. It
authorizes the Secretary of State to make decisions on whether license
applications or other written requests for approval shall be granted, or
whether exemptions may be used. It also authorizes the Secretary of
State to revoke, suspend or amend licenses or other written approvals
whenever the Secretary deems such action to be advisable. The
administration of the Arms Export Control Act is a foreign affairs
function encompassed within the meaning of the military and foreign
affairs exclusion of the Administrative Procedure Act and is thereby
expressly exempt from various provisions of that Act. Because the
exercising of the foreign affairs function, including the decisions
required to implement the Arms Export Control Act, is highly
discretionary, it is excluded from review under the Administrative
Procedure Act.

\[61 FR 48831, Sept. 17, 1996\]

##### § 128.2   Administrative Law Judge.

The Administrative Law Judge referred to in this part is an
Administrative Law Judge appointed by the Department of State. The
Administrative Law Judge is authorized to exercise the powers and
perform the duties provided for in §§127.7, 127.8, and 128.3 through
128.16 of this subchapter.

\[71 FR 20551, Apr. 21, 2006\]

##### § 128.3   Institution of Administrative Proceedings.

(a) *Charging letters.* The Managing Director, Directorate of Defense
Trade Controls, with the concurrence of the Office of the Legal Adviser,
Department of State, may initiate proceedings to impose debarment or
civil penalties in accordance with §127.7 or §127.10 of this subchapter,
respectively. Administrative proceedings shall be initiated by means of
a charging letter. The charging letter will state the essential facts
constituting the alleged violation and refer to the regulatory or other
provisions involved. It will give notice to the respondent to answer the
charges within 30 days, as provided in §128.5(a), and indicate that a
failure to answer will be taken as an admission of the truth of the
charges. It will inform the respondent that he or she is entitled to an
oral hearing if a written demand for one is filed with the answer or
within seven (7) days after service of the answer. The respondent will
also be informed that he or she may, if so desired, be represented by
counsel of his or her choosing. Charging letters may be amended from
time to time, upon reasonable notice.

\(b\) *Service.* A charging letter is served upon a respondent:

\(1\) If the respondent is a resident of the United States, when it is
mailed postage prepaid in a wrapper addressed to the respondent at that
person\'s last known address; or when left with the respondent or the
agent or employee of the respondent; or when left at the respondent\'s
dwelling with some person of suitable age and discretion then residing
herein; or

\(2\) If the respondent is a non-resident of the United States, when
served upon the respondent by any of the foregoing means. If such
methods of service are not practicable or appropriate, the charging
letter may be tendered for service on the respondent to an official of
the government of the country wherein the respondent resides, provided
that there is an agreement or understanding between the United States
Government and the government of the country wherein the respondent
resident permitting this action.

\[61 FR 48831, Sept. 17, 1996, as amended at 71 FR 20551, Apr. 21,
2006\]

##### § 128.4   Default.

(a) *Failure to answer.* If the respondent fails to answer the charging
letter, the respondent may be held in default. The case shall then be
referred to the Administrative Law Judge for consideration in a manner
as the Administrative Law Judge may consider appropriate. Any order
issued shall have the same effect as an order issued following the
disposition of contested charges.

\(b\) *Petition to set aside defaults.* Upon showing good cause, any
respondent against whom a default order has been issued may apply to set
aside the default and vacate the order entered thereon. The petition
shall be submitted to duplicate to the Assistant Secretary for
Political-Military Affairs, U.S. Department of State, 2201 C Street,
NW., Washington, DC 20520. The Director will refer the petition to the
Administrative Law Judge for consideration and a recommendation. The
Administrative law Judge will consider the application and may order a
hearing and require the respondent to submit further evidence in support
of his or her petition. The filing of a petition to set aside a default
does not in any manner affect an order entered upon default and such
order continues in full force and effect unless a further order is made
modifying or terminating it.

\[61 FR 48832, Sept. 17, 1996\]

##### § 128.5   Answer and demand for oral hearing.

(a) *When to answer.* The respondent is required to answer the charging
letter within 30 days after service.

\(b\) *Contents of answer.* An answer must be responsive to the charging
letter. It must fully set forth the nature of the respondent\'s defense
or defenses. In the answer, the respondent must admit or deny
specifically each separate allegation of the charging letter, unless the
respondent is without knowledge, in which case the respondent\'s answer
shall so state and the statement shall operate as denial. Failure to
deny or controvert any particular allegation will be deemed an admission
thereof. The answer may set forth such additional or new matter as the
respondent believes support a defense or claim of mitigation. Any
defense or partial defense not specifically set forth in an answer shall
be deemed waived. Evidence offered thereon by the respondent at a
hearing may be refused except upon good cause being shown. If the
respondent does not demand an oral hearing, he or she shall transmit,
within seven (7) days after the service of his or her answer, original
or photocopies of all correspondence, papers, records, affidavits, and
other documentary or written evidence having any bearing upon or
connection with the matters in issue. If any such materials are in
language other than English, translations into English shall be
submitted at the same time.

\(c\) *Submission of answer.* The answer, written demand for oral
hearing (if any) and supporting evidence required by §128.5(b) shall be
in duplicate and mailed or delivered to the designated Administrative
Law Judge. A copy shall be simultaneously mailed to the Managing
Director, Directorate of Defense Trade Controls, SA--1, Room 1200,
Department of State, Washington, DC 20522--0112, or delivered to 2401
Street, NW., Washington, DC addressed to Managing Director, Directorate
of Defense Trade Controls, SA--1, Room 1200, Department of State,
Washington, DC 20037.

\[58 FR 39320, July 22, 1993, as amended at 61 FR 48832, Sept. 17, 1996;
71 FR 20551, Apr. 21, 2006\]

##### § 128.6   Discovery.

(a) *Discovery by the respondent.* The respondent, through the
Administrative Law Judge, may request from the Directorate of Defense
Trade Controls any relevant information, not privileged or otherwise not
authorized for release, that may be necessary or helpful in preparing a
defense. The Directorate of Defense Trade Controls may provide any
relevant information, not privileged or otherwise not authorized for
release, that may be necessary or helpful in preparing a defense. The
Directorate of Defense Trade Controls may supply summaries in place of
original documents and may withhold information from discovery if the
interests of national security or foreign policy so require, or if
necessary to comply with any statute, executive order or regulation
requiring that the information not be disclosed. The respondent may
request the Administrative Law Judge to request any relevant
information, books, records, or other evidence, from any other person or
government agency so long as the request is reasonable in scope and not
unduly burdensome.

\(b\) *Discovery by the Directorate of Defense Trade Controls.* The
Directorate of Defense Trade Controls or the Administrative Law Judge
may make reasonable requests from the respondent of admissions of facts,
answers to interrogatories, the production of books, records, or other
relevant evidence, so long as the request is relevant and material.

\(c\) *Subpoenas.* At the request of any party, the Administrative Law
Judge may issue subpoenas, returnable before him, requiring the
attendance of witnesses and the production of books, records, and other
documentary or physical evidence determined by he Administrative Law
Judge to be relevant and material to the proceedings, reasonable in
scope, and not unduly burdensome.

\(d\) *Enforcement of discovery rights.* If the Directorate of Defense
Trade Controls fails to provide the respondent with information in its
possession which is not otherwise available and which is necessary to
the respondent\'s defense, the Administrative Law Judge may dismiss the
charges on her or his own motion or on a motion of the respondent. If
the respondent fails to respond with reasonable diligence to the
requests for discovery by the Directorate of Defense Trade Controls or
the Administrative Law Judge, on her or his own motion or motion of the
Directorate of Defense Trade Controls, and upon such notice to the
respondent as the Administrative Law Judge may direct, may strike
respondent\'s answer and declare the respondent in default, or make any
other ruling which the Administrative Law Judge deems necessary and just
under the circumstances. If a third party fails to respond to the
request for information, the Administrative Law Judge shall consider
whether the evidence sought is necessary to a fair hearing, and if it is
so necessary that a fair hearing may not be held without it, the
Administrative Law Judge shall determine whether substitute information
is adequate to protect the rights of the respondent. If the
Administrative Law Judge decides that a fair hearing may be held with
the substitute information, then the proceedings may continue. If not,
then the Administrative Law Judge may dismiss the charges.

\[61 FR 48832, Sept. 17, 1996, as amended at 71 FR 20551, Apr. 21,
2006\]

##### § 128.7   Prehearing conference.

(a)(1) The Administrative Law Judge may, upon his own motion or upon
motion of any party, request the parties or their counsel to a
prehearing conference to consider:

\(i\) Simplification of issues;

\(ii\) The necessity or desirability of amendments to pleadings;

\(iii\) Obtaining stipulations of fact and of documents to avoid
unnecessary proof; or

\(iv\) Such other matter as may expedite the disposition of the
proceeding.

\(2\) The Administrative Law Judge will prepare a summary of the action
agreed upon or taken at the conference, and will incorporate therein any
written stipulations or agreements made by the parties.

\(3\) The conference proceedings may be recorded magnetically or taken
by a reporter and transcribed, and filed with the Administrative Law
Judge.

\(b\) If a conference is impracticable , the Administrative Law Judge
may request the parties to correspond with the person to achieve the
purposes of a conference. The Administrative Law Judge shall prepare a
summary of action taken as in the case of a conference.

\[61 FR 48832, Sept. 17, 1996, as amended at 71 FR 20551, Apr. 21,
2006\]

##### § 128.8   Hearings.

(a) A respondent who had not filed a timely written answer is not
entitled to a hearing, and the case may be considered by the
Administrative Law Judge as provided in §128.4(a). If any answer is
filed, but no oral hearing demanded, the Administrative Law Judge may
proceed to consider the case upon the written pleadings and evidence
available. The Administrative Law Judge may provide for the making of
the record in such manner as the Administrative Law Judge deems
appropriate. If respondent answers and demands an oral hearing, the
Administrative Law Judge, upon due notice, shall set the case for
hearing, unless a respondent has raised in his answer no issues of
material fact to be determined. If respondent fails to appear at a
scheduled hearing, the hearing nevertheless may proceed in respondent\'s
absence. The respondent\'s failure to appear will not affect the
validity of the hearing or any proceedings or action thereafter.

\(b\) The Administrative Law Judge may administer oaths and
affirmations. Respondent may be represented by counsel. Unless otherwise
agreed by the parties and the Administrative Law Judge the proceeding
will be taken by a reporter or by magnetic recording, transcribed, and
filed with the Administrative Law Judge. Respondent may examine the
transcript and may obtain a copy upon payment of proper costs.

\[61 FR 48833, Sept. 17, 1996\]

##### § 128.9   Proceedings before and report of Administrative Law Judge.

(a) The Administrative Law Judge may conform any part of the proceedings
before him or her to the Federal Rules of Civil Procedure. The record
may be made available in any other administrative or other proceeding
involving the same respondent.

\(b\) The Administrative Law Judge, after considering the record, will
prepare a written report. The report will include findings of fact,
findings of law, a finding whether a law or regulation has been
violated, and the Administrative Law Judge\'s recommendations. It shall
be transmitted to the Assistant Secretary for Political-Military
Affairs, Department of State.

\[61 FR 48833, Sept. 17, 1996\]

##### § 128.10   Disposition of proceedings.

Where the evidence is not sufficient to support the charges, the
Managing Director, Directorate of Defense Trade Controls or the
Administrative Law Judge will dismiss the charges. Where the
Administrative Law Judge finds that a violation has been committed, the
Administrative Law Judge\'s recommendation shall be advisory only. The
Assistant Secretary of State for Political-Military Affairs will review
the record, consider the report of the Administrative Law Judge, and
make an appropriate disposition of the case. The Managing Director may
issue an order debarring the respondent from participating in the export
of defense articles or technical data or the furnishing of defense
services as provided in §127.7 of this subchapter, impose a civil
penalty as provided in §127.10 of this subchapter, or take such action
as the Administrative Law Judge may recommend. Any debarment order will
be effective for the period of time specified therein and may contain
such additional terms and conditions as are deemed appropriate. A copy
of the order together with a copy of the Administrative Law Judge\'s
report will be served upon the respondent.

\[71 FR 20552, Apr. 21, 2006\]

##### § 128.11   Consent agreements.

(a) The Directorate of Defense Trade Controls and the respondent may, by
agreement, submit to the Administrative Law Judge a proposal for the
issuance of a consent order. The Administrative Law Judge will review
the facts of the case and the proposal and may conduct conferences with
the parties and may require the presentation of evidence in the case. If
the Administrative Law Judge does not approve the proposal, the
Administrative Law Judge will notify the parties and the case will
proceed as though no consent proposal had been made. If the proposal is
approved, the Administrative Law Judge will report the facts of the case
along with recommendations to the Assistant Secretary of State for
Political-Military Affairs. If the Assistant Secretary of State for
Political-Military Affairs does not approve the proposal, the case will
proceed as though no consent proposal had been made. If the Assistant
Secretary of State for Political-Military Affairs approves the proposal,
an appropriate order may be issued.

\(b\) Cases may also be settled prior to service of a charging letter.
In such an event, a proposed charging letter shall be prepared, and a
consent agreement and order shall be submitted for the approval and
signature of the Assistant Secretary for Political-Military Affairs, and
no action by the Administrative Law Judge shall be required. Cases which
are settled may not be reopened or appealed.

\[61 FR 48833, Sept. 17, 1996, as amended at 71 FR 20552, Apr. 21,
2006\]

##### § 128.12   Rehearings.

The Administrative Law Judge may grant a rehearing or reopen a
proceeding at any time for the purpose of hearing any relevant and
material evidence which was not known or obtainable at the time of the
original hearing. A report for rehearing or reopening must contain a
summary of such evidence, and must explain the reasons why it could not
have been presented at the original hearing. The Administrative Law
Judge will inform the parties of any further hearing, and will conduct
such hearing and submit a report and recommendations in the same manner
as provided for the original proceeding (Described in §128.10).

\[61 FR 48833, Sept. 17, 1996\]

##### § 128.13   Appeals.

(a) *Filing of appeals.* An appeal must be in writing, and be addressed
to and filed with the Under Secretary of State for Arms Control and
International Security, Department of State, Washington, DC 20520. An
appeal from a final order denying export privileges or imposing civil
penalties must be filed within 30 days after receipt of a copy of the
order. If the Under Secretary cannot for any reason act on the appeal,
he or she may designate another Department of State official to receive
and act on the appeal.

\(b\) *Grounds and conditions for appeal.* The respondent may appeal
from the debarment or from the imposition of a civil penalty (except the
imposition of civil penalties pursuant to a consent order pursuant to
§128.11) upon the ground: (1) That the findings of a violation are not
supported by any substantial evidence; (2) that a prejudicial error of
law was committed: or (3) that the provisions of the order are
arbitrary, capricious, or an abuse of discretion. The appeal must
specify upon which of these grounds the appeal is based and must
indicate from which provisions of the order the appeal is taken. An
appeal from an order issued upon default will not be entertained if the
respondent has failed to seek relief as provided in §128.4(b).

\(c\) *Matters considered on appeal.* An appeal will be considered upon
the basis of the assembled record. This record consists of (but is not
limited to) the charging letter, the respondent\'s answer, the
transcript or magnetic recording of the hearing before the
Administrative Law Judge, the report of the Administrative Law Judge,
the order of the Assistant Secretary of State for Political-Military
Affairs, and any other relevant documents involved in the proceedings
before the Administrative Law Judge. The Under Secretary of State for
Arms Control and International Security may direct a rehearing and
reopening of the proceedings before the Administrative Law Judge if he
or she finds that the record is insufficient or that new evidence is
relevant and material to the issues and was not known and was not
reasonably available to the respondent at the time of the original
hearings.

\(d\) *Effect of appeals.* The taking of an appeal will not stay the
operation of any order.

\(e\) *Preparation of appeals* ---(1) *General requirements.* An appeal
shall be in letter form. The appeal and accompanying material should be
filed in duplicate, unless otherwise indicated, and a copy
simultaneously mailed to the Managing Director, Directorate of Defense
Trade Controls, SA--1, Room 1200, Department of State, Washington, DC
20522--0112 or delivered to 2401 E Street, NW., Washington, DC addressed
to Managing Director, Directorate of Defense Trade Controls, SA--1, Room
1200, Department of State, Washington, DC 20037.

\(2\) *Oral presentation.* The Under Secretary of State for Arms Control
and International Security may grant the appellant an opportunity for
oral argument and will set the time and place for oral argument and will
notify the parties, ordinarily at least 10 days before the date set.

\(f\) *Decisions.* All appeals will be considered and decided within a
reasonable time after they are filed. An appeal may be granted or denied
in whole or in part, or dismissed at the request of the appellant. The
decision of the Under Secretary of State for Arms Control and
International Security will be final.

\[58 FR 39320, July 22, 1993, as amended at 61 FR 48833, Sept. 17, 1996;
71 FR 20552, Apr. 21, 2006\]

##### § 128.14   Confidentiality of proceedings.

Proceedings under this part are confidential. The documents referred to
in §128.17 are not, however, deemed to be confidential. Reports of the
Administrative Law Judge and copies of transcripts or recordings of
hearings will be available to parties and, to the extent of their own
testimony, to witnesses. All records are available to any U.S.
Government agency showing a proper interest therein.

\[61 FR 48834, Sept. 17, 1996\]

##### § 128.15   Orders containing probationary periods.

(a) *Revocation of probationary periods.* A debarment or interim
suspension order may set a probationary period during which the order
may be held in abeyance for all or part of the debarment or suspension
period, subject to the conditions stated therein. The Managing Director,
Directorate of Defense Trade Controls, may apply, without notice to any
person to be affected thereby, to the Administrative Law Judge for a
recommendation on the appropriateness of revoking probation when it
appears that the conditions of the probation have been breached. The
facts in support of the application will be presented to the
Administrative Law Judge, who will report thereon and make a
recommendation to the Assistant Secretary of State for
Political-Military Affairs. The latter will make a determination whether
to revoke probation and will issue an appropriate order. The party
affected by this action may request the Assistant Secretary of State for
Political-Military Affairs to reconsider the decision by submitting a
request within 10 days of the date of the order.

\(b\) *Hearings* ---(1) *Objections upon notice.* Any person affected by
an application upon notice to revoke probation, within the time
specified in the notice, may file objections with the Administrative Law
Judge.

\(2\) *Objections to order without notice.* Any person adversely
affected by an order revoking probation, without notice may request that
the order be set aside by filing his objections thereto with the
Administrative Law Judge. The request will not stay the effective date
of the order or revocation.

\(3\) *Requirements for filing objections.* Objections filed with the
Administrative Law Judge must be submitted in writing and in duplicate.
A copy must be simultaneously submitted to the Directorate of Defense
Trade Controls. Denials and admissions, as well as any mitigating
circumstances, which the person affected intends to present must be set
forth in or accompany the letter of objection and must be supported by
evidence. A request for an oral hearing may be made at the time of
filing objections.

\(4\) *Determination.* The application and objections thereto will be
referred to the Administrative Law Judge. An oral hearing if requested,
will be conducted at an early convenient date, unless the objections
filed raise no issues of material fact to be determined. The
Administrative Law Judge will report the facts and make a recommendation
to the Assistant Secretary for Political-Military Affairs, who will
determine whether the application should be granted or denied and will
issue an appropriate order. A copy of the order and of the
Administrative Law Judge\'s report will be furnished to any person
affected thereby.

\(5\) *Effect of revocation on other actions.* The revocation of a
probationary period will not preclude any other action concerning a
further violation, even where revocation is based on the further
violation.

\[61 FR 48834, Sept. 17, 1996, as amended at 71 FR 20552, Apr. 21,
2006\]

##### § 128.16   Extension of time.

The Administrative Law Judge, for good cause shown, may extend the time
within which to prepare and submit an answer to a charging letter or to
perform any other act required by this part.

\[61 FR 48834, Sept. 17, 1996\]

##### § 128.17   Availability of orders.

All charging letters, debarment orders, orders imposing civil penalties,
probationary periods, and interim suspension orders are available for
public inspection in the Public Reading Room of the Department of State.

This page deliberately blank.