Civil Money Penalties and No-
Tobacco-Sale Orders for 
Tobacco Retailers 
 
Responses to Frequently Asked 
Questions 
(Revised)* 
 
 
 
Guidance for Industry 
 
Comments may be submitted at any time for Agency consideration.  Electronic comments may 
be submitted to http://www.regulations.gov.  Alternatively, submit written comments to the 
Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers 
Lane, Room 1061, Rockville, MD, 20852.  All comments should be identified with Docket No. 
[FDA-2012-D-1083].  
 
For questions regarding this guidance, contact the Center for Tobacco Products at (Tel) 1-877-
CTP-1373 (1-877-287-1373) Monday-Friday, 9 a.m.  4 p.m. EDT. 
 
Additional copies are available online at 
http://www.fda.gov/TobaccoProducts/Labeling/RulesRegulationsGuidance/default.htm.  You 
may send an e-mail request to SmallBiz.Tobacco@fda.hhs.gov to receive an electronic copy of 
this guidance. You may send a request for hard copies to U.S. Food and Drug Administration, 
Center for Tobacco Products, Attn: Office of Small Business Assistance, Document Control 
Center, Bldg. 71, Rm. G335, 10903 New Hampshire Ave., Silver Spring, MD 20993-2000. 
 
 
U.S. Department of Health and Human Services 
Food and Drug Administration 
Center for Tobacco Products 
 
December 2016 
 
* This is a revision to the third edition of this guidance, which issued in May 2015.  Revisions are noted by 
date at the end of the guidance.  Contains Nonbinding Recommendations 
 
Table of Contents 
 
 
 
I.  INTRODUCTION .........................................................................................................1 
II.  RESPONSES TO FREQUENTLY ASKED QUESTIONS ..........................................2 
i  
  Contains Nonbinding Recommendations 
 
Civil Money Penalties and No-Tobacco-Sale 
1 
Orders for Tobacco Retailers 
2 
Responses to Frequently Asked Questions 
3 
 
4 
 
5   
1
Guidance for Industry  
6 
7   
8   
9  This guidance represents the current thinking of the Food and Drug Administration (FDA or Agency) on 
10  this topic.  It does not establish any rights for any person and is not binding on FDA or the public.  You 
11  can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.  
12  To discuss an alternative approach, contact the FDA staff responsible for this guidance as listed on the 
13  title page.   
14   
15   
16   
17   
18  I.  INTRODUCTION  
19   
20  This guidance provides information in response to frequently asked questions that the Center for 
21  Tobacco Products (CTP) is receiving from retailers and other interested stakeholders regarding 
22  civil money penalties and no-tobacco-sale orders for violations of Federal Food, Drug, and 
23  Cosmetic Act (FD&C Act) (21 U.S.C. 301 et seq.) requirements relating to tobacco products in 
24  retail outlets. In particular, the guidance provides information about CTPs enforcement of the 
25  requirement that tobacco products may not be sold or distributed in violation of regulations 
26  issued under section 906(d) of the FD&C Act, including restrictions on the sale and distribution 
27  of cigarettes, smokeless tobacco, and covered tobacco products in title 21 of the Code of Federal 
28  Regulations (CFR) part 11402 and about procedures CTP follows when it initiates administrative 
29  enforcement actions.  Additional information on civil money penalties and no-tobacco-sale 
30  orders can be found in FDA's guidance for FDA and tobacco retailers Civil Money Penalties and 
31  No-Tobacco-Sale Orders for Tobacco Retailers (CMP and NTSO Guidance). 
32   
33  The penalty schedule mentioned in this document is only for violations by a retail outlet of rules 
34  issued under section 906(d) of the FD&C Act.  CTP may seek other general or enhanced 
35  penalties under section 303(f)(9) of the FD&C Act for other kinds of violations not addressed in 
                                                
1 This guidance was prepared by the Office of Compliance and Enforcement and Office of Regulations in the Center 
for Tobacco Products at FDA. 
2 75 FR 13225, March 19, 2010; 81 FR 28973. May 10, 2016 (Deeming Rule). 
1  
  Contains Nonbinding Recommendations 
 
36  this document.  A no-tobacco-sale order may be imposed only for repeated violations at a 
37  particular outlet of restrictions on the sale and distribution of tobacco products promulgated 
38  under section 906(d) of the FD&C Act. 
39   
40  FDAs guidance documents, including this guidance, do not establish legally enforceable 
41  responsibilities.  Instead, guidances describe the Agencys current thinking on a topic and should 
42  be viewed only as recommendations, unless specific regulatory or statutory requirements are 
43  cited.  The use of the word should in Agency guidances means that something is suggested or 
44  recommended, but not required.  
45   
46   
47  II.  RESPONSES TO FREQUENTLY ASKED QUESTIONS 
48   
49  This section provides responses to questions that retailers and other interested stakeholders have 
50  asked CTP regarding civil money penalties and no-tobacco-sale orders.   
51   
52  1.  What is a civil money penalty? 
53   
54  A civil money penalty (CMP) is a monetary penalty assessed for a violation of the law.  FDA is 
55  authorized to assess CMPs for violations of the FD&C Act relating to tobacco products under 
56  section 303(f)(9) of the FD&C Act (21 U.S.C. 333(f)(9)).  FDAs regulations governing CMP 
57  procedures are established in 21 CFR part 17. 
58   
59  2.  What is a no-tobacco-sale order (NTSO)?  
60   
61  Section 303(f)(8) of the FD&C Act authorizes FDA to impose a no-tobacco-sale order on a 
62  person found to have committed repeated violations of restrictions promulgated under section 
63  906(d) of the FD&C Act at a particular retail outlet. The term no-tobacco-sale order refers to an 
64  order prohibiting the sale of tobacco products at a retail outlet indefinitely or for a specified 
65  duration under section 303(f)(8) of the FD&C Act. Repeated violations means at least 5 
66  violations of particular requirements over a 36-month period at a particular retail outlet that 
67  constitute a repeated violation (section 103(q)(1)(A) of the Family Smoking Prevention and 
68  Tobacco Control Act (Tobacco Control Act)). 
69   
70  3.  What is a complaint? 
71   
72  A complaint is a legal document that identifies the statutory and/or regulatory violations CTP is 
73  alleging as the basis for a CMP, an NTSO, or both.  The complaint also identifies the amount of 
74  the CMP and/or duration of the NTSO that CTP is seeking.  CTPs filing of a complaint for a 
75  CMP and/or NTSO, or both, officially opens an administrative enforcement action.  Once the 
76  complaint is filed, it is assigned to an administrative law judge (ALJ) who will preside over the 
77  case.  CTP serves a copy of the complaint on the retailer or other appropriate person.  
78   
79  4.  How will the respondent be notified of a CMP or NTSO? 
80   
81  CTP may serve the complaint by either of the following methods:   
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  Contains Nonbinding Recommendations 
 
82   
83    certified or registered mail or similar mail delivery service (e.g., UPS), with a return 
84  receipt reflecting receipt (21 CFR  17.7(a)(1)); or   
85    personal delivery to an individual respondent, or if the respondent is a corporation or 
86  unincorporated business, personal delivery to the respondents officer, managing agent, 
87  or general agent (21 CFR  17.7(a)(2)). 
88   
89  Generally, CTP will address the complaint to the establishment where the violation occurred or 
90  the retailers registered agent.  If CTP cannot reach the retailer or its agent through any of these 
91  methods, CTP intends to reach the retailer through other means. 
92   
93  5.  Who is the respondent?  
94   
95  The respondent is the party against whom the complaint is filed, whom CTP is charging with 
96  violating an FD&C Act tobacco-related provision.  The respondent will be listed in the heading 
97  of the complaint and in certain accompanying documents.  When CTP seeks CMPs or NTSOs 
98  for retailer violations of 21 CFR part 1140, CTP generally names the owner of the retail outlet as 
99  the respondent in the complaint, rather than an employee or clerk.  The owner of a retail outlet 
100  who is named as respondent will be liable for any CMP that is imposed for violations at the 
101  outlet. 
102      
103  Note that the term retailer includes the owner of a physical or on-line retail outlet that otherwise 
104  meets the definition in section 900 of the FD&C Act or part 1140 of the CFR.   
105   
106  6.  Why did CTP serve this complaint? 
107   
108  CTP is alleging that the respondent is responsible for violations of tobacco-related provisions of 
109  the FD&C Act and/or implementing regulations, and is initiating a CMP or NTSO action, or 
110  both, against the respondent. The first time CTP identifies violation(s) at a retail outlet, it 
111  generally issues a Warning Letter that describes each violation identified.  If CTP identifies 
112  violation(s) at a retail outlet during a follow-up compliance check, or at a subsequent inspection 
113  at that retail outlet, it generally seeks a CMP.  Additionally, if a retailer has committed five 
114  repeated violations within a 36-month period, CTP may seek an NTSO. See CMP and NTSO 
115  Guidance. 
116    
117  7.  How does CTP initiate CMPs or NTSOs, and what are the respondents options? 
118   
119  CTP will initiate a CMP or NTSO action, or both, by filing an administrative complaint and 
120  serving a copy of the complaint on the tobacco retailer or other appropriate person or entity, 
121  usually by sending the documents via UPS.  If the respondent is served with a complaint for 
122  CMP and/or NTSO, or both, the respondent can usually choose from the following options, as 
123  applicable:  
124   
125  (1) pay the penalty sought in the complaint (no contest); 
126  (2) enter into an agreement for the NTSO sought in the complaint (no contest); or 
127  (3) file an answer and contest some or all of the Agencys allegations (see 21 CFR  17.9). 
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  Contains Nonbinding Recommendations 
 
128   
129  8.  What if the respondent decides to pay the penalty sought in a CMP?  
130   
131  If the respondent decides to pay the CMP and the payment has been received and processed, 
132  CTP will file a Notice of Settlement Agreement with the ALJ and send a copy of the filed Notice 
133  of Settlement Agreement to the respondent.  The ALJ then issues an order closing the 
134  administrative action.  Although paying the penalty closes the current CMP action, it does not 
135  excuse the retailer from any future violations. For information about the CMP schedule, see 43. 
136  How does CTP determine the amount of the CMP that it will seek in the complaint for 
137  violations of 21 CFR part 1140? 
138   
139  9.  What if the respondent does not contest the no-tobacco-sale order? 
140   
141  The ALJ will enter an NTSO.  The respondent will be subject to the NTSO for the duration 
142  specified in the order. 
143   
144  10. What if the respondent chooses to contest the complaint? 
145   
146  If the respondent chooses to contest the matter, the party must file an answer to the complaint, as 
147  described in 21 CFR  17.9, within 30 days after date of service of the complaint.3   The 
148  respondent may also request an extension of time to file an answer, which is allowed by the ALJ 
149  only when good cause is shown (see 21 CFR  17.9(c)).  For more information, see 15. Can 
150  the respondent have more time to file an answer, and how does the respondent request an 
151  extension of time to file an answer? 
152   
153  If the respondent files an answer in a timely manner, the party is entitled to a hearing according 
154  to the procedures established in FDAs regulations governing CMP proceedings (21 CFR part 
155  17).4  For more information, see 23. If the respondent is served with a complaint, does the 
156  party have a right to a hearing? 
157   
158  The respondent and/or the respondents representative(s) may engage in settlement discussions 
159  with CTP regarding the CMP.  For information about settlement discussions, see 20. Can the 
160  case be settled without having a hearing?  
161   
162  11. What is an answer and what is its purpose? 
163   
164  An answer is a legal document that contains the respondents formal response to the complaint.  
165  The answer must admit or deny each of the allegations made in the complaint and include any 
166  and all defenses to the action, as well as reasons or explanations why the CMP or the duration of 
167  the NTSO should be less than the amount sought in the complaint.  An answer also serves as a 
168  request for hearing unless the respondent states otherwise (see 21 CFR  17.9(a)).  Detailed 
                                                
3 In computing this period, begin with the day following the act or event, and include the last day of the period, 
unless such day is a Saturday, Sunday, or Federal holiday, in which event the time includes the next business day 
(see 21 CFR  17.30(a)). 
4 See CMP and  NTSO Guidance.  
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  Contains Nonbinding Recommendations 
 
169  information on where and how to file an answer will be provided with the complaint.  For 
170  information about what the answer must contain, see 17. What must be included in an 
171  answer? 
172   
173  12. If the respondent was named as the owner of a retail outlet in the complaint but was not 
174  the owner when the violations occurred, is there anything that the respondent needs to 
175  do in response to the complaint? 
176   
177  If the respondent was not the owner of the retail outlet at the time the violations occurred, the 
178  respondent should still submit an answer to the complaint and raise any applicable defenses.    
179   
180  CTP recommends that the respondent submit evidence with the answer to show that it was not 
181  the owner at the time the violation was observed, e.g., evidence of legal sale of the 
182  establishment, lease contract, or other evidence to show a change of ownership.  If the evidence 
183  provided is sufficient to show that the respondent was not responsible for the violations, then 
184  CTP will withdraw or amend the complaint.  
185   
186  13. How does the respondent submit an answer?   
187   
188  Detailed information on where and how to file an answer will be provided with the complaint.   
189   
190  14. How long does the respondent have to submit an answer? 
191   
192  The answer must be filed within 30 days of the date of service of the complaint.  The answer is 
193  considered filed when it is received, not when it is mailed (see 21 CFR  17.9(a)).   
194   
195  15. Can the respondent have more time to file an answer, and how does a respondent 
196  request an extension of time to file an answer? 
197   
198  If the respondent is unable to file an answer within the time allowed, the respondent must file an 
199  extension request not later than 30 days after service of the complaint.  The request must explain 
200  why the respondent is unable to file the answer in the time allowed and why an extension should 
201  be granted.  If the respondent shows good cause for an extension, the ALJ may grant up to 30 
202  additional days to file an answer (see 21 CFR  17.9(c)).  Note that a request for extension is not 
203  automatically granted and is only granted for good cause shown.  Detailed information on where 
204  and how to file an extension request will be provided with the complaint.   
205   
206  16. What type of proof does the respondent need to submit with an extension request? 
207   
208  An ALJ may grant an extension only for good cause shown.  This means that the respondent 
209  must provide a good and sufficient reason for being unable to provide an answer within the 30 
210  days provided by the regulations.  If the ALJ does not grant the request, then the answer remains 
211  due in the original 30-day timeframe.  Thus, it is recommended that the respondent make all 
212  requests early and continue to prepare the answer while waiting for the ALJs response (see 21 
213  CFR  17.9(c)). 
214   
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215  17. What is included in an answer? 
216   
217  The answer must: 
218   
219    admit or deny each of the allegations listed in the complaint.  If an allegation is not 
220  specifically denied, it will be considered admitted (see 21 CFR  17.9(b)(1)); 
221    state any defenses the respondent plans to use (see 21 CFR  17.9(b)(2)); 
222    provide any reasons the respondent believes that civil money penalties and/or NTSO 
223  duration should be less than sought in the complaint (see 21 CFR  17.9(b)(3)); and 
224    if respondent is represented by counsel, state counsels name, address and telephone 
225  number (see 21 CFR  17.9(b)(4)). 
226   
227  The respondent should also provide an e-mail address and a facsimile number for counsel, if 
228  available.  If the respondent is not represented by counsel, CTP suggests providing the name, 
229  address, telephone number, facsimile number, and e-mail address of the respondent, as 
230  applicable. 
231   
232  In addition, the respondent can use the answer to request to participate in settlement discussions 
233  with CTP prior to going to hearing.   
234   
235  18. What happens if the respondents answer does not contain all the elements required by 
236  21 CFR  17.9(b)? 
237   
238  If the respondents answer does not contain all of the elements that are required by 21 CFR 
239   17.9(b), the ALJ may choose not to accept the answer.  If that happens, the respondent could 
240  ask the ALJ for permission to amend his or her answer in the particular case.  The ALJ may 
241  choose not to grant the respondent permission to amend an incomplete answer. 
242   
243  19. What if the respondent does not agree with the charges in the complaint, the CMP 
244  amount, or the duration of the NTSO? 
245   
246  If the respondent wishes to contest the charges, the CMP amount, and/or the duration of the 
247  NTSO, the party should file an answer to the complaint (see 21 CFR  17.9(a)).  The information 
248  that must be included in an answer is detailed in question 17 above.  A respondent may file an 
249  answer and admit the allegations and request a lower CMP amount and/or shorter NTSO 
250  duration than sought in the complaint, but the respondent should explain his or her reasons why 
251  the CMP amount or the NTSO duration should be modified. 
252   
253  20. Can the case be settled without having a hearing? 
254   
255  If the respondent does not agree with the allegations, wants to contest the amount of the CMP or 
256  the duration of the NTSO that CTP is seeking, or has other concerns related to the case, the party 
257  should file an answer.  When a respondent files an answer, the respondent may request 
258  settlement discussions with CTP.  Settlement discussions are often an efficient method of 
259  resolving a contested case.  The respondent may present evidence and arguments as to why he or 
260  she should not be subject to a CMP, an NTSO, or both, or mitigating factors that should reduce 
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  Contains Nonbinding Recommendations 
 
261  the CMP amount and/or the NTSO duration.  If the respondent and CTP do not agree on a 
262  settlement, the respondent can still have a hearing. Cases that are not settled will be decided by 
263  an ALJ either through motions for summary decision filed by one or both parties, or after an 
264  administrative hearing conducted according to the procedures in 21 CFR part 17. 
265   
266  If the respondent and CTP arrive at an agreed upon settlement of a complaint seeking a no-
267  tobacco-sale order, the respondent will sign a settlement agreeing to the terms of the NTSO and 
268  will be expected to comply with its terms unless or until it is terminated. Even if charges are 
269  resolved through a settlement agreement, any violations that occurred will be counted in 
270  determining the total number of violations for purposes of subsequent enforcement actions. 
271   
272  21. Who will be involved in the settlement conference, and where will it take place? 
273   
274  The respondent and the respondents attorney (as applicable), may participate in the settlement 
275  conference.  CTP generally expects to be represented by at least one of its representative and/or 
276  an attorney from FDAs Office of Chief Counsel.  CTPs policy is to conduct settlement 
277  conferences by telephone. 
278   
279  22. What kind of mitigating factors does CTP consider? 
280   
281  The respondent may present relevant mitigating factors for CTP to consider for reducing the 
282  CMP amount.  A list of the types of factors that may be relevant will be sent to the retailer prior 
283  to settlement discussions.  Mitigating factors may include the following:  
284    nature, circumstances, extent, and gravity of the violation(s)  
285    ability to pay  
286    effect on ability to continue to do business  
287    any history of prior violations 
288    degree of culpability 
289    amount of any penalties paid by the retailer to a State for the same violation 
290    retailers implementation of an employee training program  
291    other relevant matters  
292   
293  See 21 U.S.C. 333(f)(5)(B) and section 103(q)(2)(C) of the Tobacco Control Act. 
294   
295  For more information about how CMP amounts are determined, including information on 
296  mitigating factors, see CMP and NTSO Guidance.  If the respondent and CTP arrive at an 
297  agreed upon settlement of a complaint seeking a CMP, the respondent should pay that amount 
298  and, once the payment is processed, CTP will file a Notice of Settlement Agreement asking the 
299  ALJ to close the case.  Please note that, as a term of settlement, CTP requires the respondent to 
300  both acknowledge that the violations occurred as alleged in the complaint and waive its ability to 
301  contest those violations in the future.  Even if the case is resolved through settlement, any 
302  violations alleged in that case may be counted in determining the total number of violations for 
303  purposes of subsequent enforcement actions.  See CMP and NTSO Guidance. 
304   
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305  23. If the respondent is served with a complaint, does the party have a right to a hearing? 
306   
307  Yes.  Filing an answer in response to a complaint seeking a CMP or imposition of an NTSO, or 
308  both, serves as a request for a hearing unless the respondent states otherwise (see 21 CFR 
309   17.9(a)).  If the respondent files an answer in a timely manner,5 the respondent is entitled to 
310  have the matter proceed under the procedures established in FDAs regulations governing CMP 
311  proceedings, which can be found in 21 CFR part 17 and includes the option to have a hearing 
312  unless the case is resolved on a motion for summary decision without the need for a hearing. 
313  CTP must use these procedures for NTSOs as well (section 303(f)(8) of the FD&C Act). 
314   
315  24. What is an administrative hearing? 
316   
317  CTP files a complaint seeking assessment of a CMP or imposition of an NTSO, or both, with an 
318  ALJ, who is a fair and impartial decision-maker. The ALJ will determine whether the violations 
319  alleged in the complaint occurred. If the ALJ finds that the respondent is liable for the violations 
320  alleged, the ALJ will determine the appropriate CMP amount to assess and/or the appropriate 
321  duration for an NTSO.  If the respondent chooses to have a hearing, it will be an administrative 
322  hearing before the ALJ.  Prior to a hearing, the parties must exchange their direct written 
323  testimony (declarations from its witnesses and all evidence supporting the parties positions) 
324  violations). During the hearing, the parties have the opportunity to cross-examine the other 
325  parties witnesses and raise legal issues. (See 21 CFR  17.25, 17.33, 17.37).    
326   
327  25. Who would hear the case if a hearing is held, and where would the hearing be held? 
328   
329  Cases that proceed to hearing are heard by an ALJ.  An ALJ is the presiding officer in an 
330  administrative hearing and has authority, among other things, to regulate the course of the 
331  hearing, receive and rule on the way evidence can be used at the hearing, rule on procedural and 
332  other motions, decide the case, in whole or in part, and issue a decision (see 21 CFR  17.19).  
333   
334  The ALJ also has the authority to set the hearing date, time, and location, and may determine that 
335  the hearing will be conducted in person, via videoconferencing, or via teleconferencing.  Upon 
336  the respondents request, the ALJ may order that the hearing be conducted by telephone, at the 
337  nearest regional or field office of the FDA or, in a no-tobacco sale order case, at a Federal, State, 
338  or county facility within 100 miles from the location of the retail outlet, if such a facility is 
339  available. (see section 303(f)(8) of the FD&C Act).   
340   
341  26. Who will be at the hearing? 
342   
343  An ALJ presides over the hearing.  Counsel from FDAs Office of the Chief Counsel on behalf 
344  of CTP, representatives from CTP, the respondent, and if represented, the attorney for the 
345  respondent, may be present at the hearing.  Witnesses may also be present for some or all of the 
346  hearing, depending on the nature of the case. The hearing is open to the public unless otherwise 
347  ordered by the ALJ (see 21 CFR  17.33(d)).   
                                                
5 For further information on the length of time to submit an answer, see How long does the respondent have to 
submit an answer? 
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348   
349  27. What evidence will the respondent have to bring to the hearing?  
350   
351  At least 30 days before the hearing or at the time specified by the ALJ, the CTP and the 
352  respondent will exchange the following documents: 
353   
354    List of all proposed exhibits (an exhibit includes the written direct testimony of any 
355  proposed witnesses, if any).  Please note that there is no oral direct testimony 
356  permitted at a hearing; 
357    Copies of each proposed exhibit; 
358    Lists of all proposed witnesses, if any; 
359    Copies of any prior written statement by any proposed witnesses; and 
360    Other requirements that the ALJ may require. 
361   
362  For additional information on the exchange of information between the parties, witnesses, and 
363  evidence, please see 21 CFR  17.25, 17.37, and 17.39. 
364     
365  28. What happens if the ALJ rules the respondent is not liable for any of the violations 
366  listed in the complaint? 
367   
368  If the ALJ determines that the respondent is not liable for any of the violations alleged in the 
369  complaint, the ALJ will issue an initial decision or a summary decision in the respondents favor 
370  (see 21 CFR  17.45(c)).  CTP may appeal the decision to the entity designated by the 
371  Commissioner of Food and Drugs to hear the appeal, currently the Departmental Appeals Board 
372  (DAB) at the Department of Health and Human Services (see 21 CFR  17.47).  
373    
374  29. What happens if the ALJ rules that the respondent is liable for some or all of the 
375  violations listed in the complaint? 
376   
377  If the ALJ finds that the respondent is liable, the respondent will owe the CMP amount and/or be 
378  subject to the NTSO, as set forth in the ALJs initial decision, unless the respondent files a notice 
379  of appeal electronically to DAB or if hard copy to both DAB and FDAs Division of Dockets 
380  Management, within 30 days after the date the ALJs order issues (see 21 CFR  17.45(a), 
381  17.45(b)(3), 17.47). 
382     
383  30. If the respondent is not satisfied with the ALJs decision, does the party have a right to 
384  appeal? 
385  Yes, the respondent has the right to appeal an ALJs initial decision to the DAB.  The respondent 
386  may appeal to the DAB by filing a notice of appeal with the electronically to DAB or if hard 
387  copy to both DAB and FDAs Division of Dockets Management within 30 days of the decision. 
388  See 21 CFR  17.47 for further information.  
389  If the respondent is not satisfied with the result on appeal, the respondent may appeal a decision 
390  of the DAB to the U.S. Court of Appeals for the District of Columbia or any other circuit in 
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391  which the party resides or transacts business (section 303(f)(6) of the FD&C Act; 21 CFR 
392   17.51).  
393   
394  31. Who is responsible for paying a CMP or complying with an NTSO?  
395   
396  The party found liable by the ALJ is responsible for paying the CMP or complying with the 
397  NTSO. The retailer is typically the named respondent and can be either a person or a business 
398  entity (see 21 CFR  17.3(b)). 
399   
400  32. Where does the CMP money go? 
401   
402  All CMP payments are deposited in the Treasury of the United States as miscellaneous receipts 
403  (see 21 CFR  17.54). 
404   
405  33. What happens if the respondent is served with a complaint and does not respond by the 
406  time an answer is due? 
407   
408  If service was proper and the respondent does not pay the CMP or file a timely answer to a 
409  complaint seeking a CMP and/or an NTSO, or both, the ALJ will assume that the facts alleged in 
410  the complaint are true and, if those facts establish liability, the ALJ will issue an initial decision, 
411  through a default order, imposing the requested CMP and/or NTSO.  
412   
413  34. What is a default order? 
414   
415  If a respondent is served with a complaint seeking a CMP and/or NTSO, or both, and does not 
416  pay the penalty and/or agree to an NTSO or also does not file an answer in a timely manner, the 
417  ALJ will assume that the facts alleged in the complaint are true and if those facts establish 
418  liability, will issue an initial decision, called a default order, imposing the requested CMP and/or 
419  NTSO.  If the complaint seeks a CMP, the amount of the CMP imposed by the ALJ will be either 
420  (1) the maximum amount of penalties provided for by law for the violations alleged; or (2) the 
421  amount sought in the complaint, whichever amount is smaller (see 21 CFR  17.11(a)). If a 
422  complaint seeks an NTSO, the ALJ will impose an NTSO for the duration sought in the 
423  complaint. For permanent NTSOs, the initial decision must allow the respondent, after a 
424  specified period of time, to request compromise, modification, or termination of the NTSO. The 
425  initial decision becomes final and binding 30 days after it is issued.6 
426   
427  By failing to file a timely answer, the respondent waives any right to a hearing and any right to 
428  contest the CMP amount or NTSO duration that is imposed by the ALJ, unless the party can 
429  demonstrate that there were extraordinary circumstances that prevented the filing of an answer.   
430   
431  35. If the ALJ enters an initial default order against the respondent, can the respondent 
432  contest it later? 
                                                
6 If the respondent misses the deadline to file an answer or seek an extension, the respondent may file a motion 
requesting the ALJ to reopen the case, but this motion requires, among other things, a showing of extraordinary 
circumstances (21 CFR  17.11(c)). 
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433   
434  When the respondent receives a default order, it will become final 30 days after the date of the 
435  initial order.  The respondent can dispute the initial order only if an extraordinary circumstances 
436  are shown and a motion to re-open is filed during the 30-day period between the dates of the 
437  initial order and the final order (see 21 CFR  17.11(c)(d)).   
438   
439  36. What happens if the respondent receives a valid and final order to pay but does not 
440  comply? 
441   
442  If the respondent does not comply with a valid and final order by paying the required amount, 
443  FDA may pursue further action through the U.S. Department of Justice. 
444   
445  37. Are the FDA inspections that result in CMPs different from the kinds of inspections 
446  that result in Warning Letters? 
447   
448  CTP has developed two different categories of compliance check inspections:  
449  (1) undercover buy (UB) inspections, primarily to determine a retailers compliance with 
450  the age and photo identification requirements relating to the sale of tobacco products; 
451  and  
452  (2) advertising and labeling (A&L) inspections, to determine a retailers compliance with 
453  tobacco product requirements other than age and photo identification.   
454   
455  In UB inspections, minors (supervised by FDA-commissioned state inspectors) attempt to 
456  purchase tobacco products, and the inspectors, who generally accompany the minors, collect 
457  evidence, record inspection results, and draft narrative reports and other documents describing 
458  their inspectional observations.  UB inspections are generally conducted without notice to the 
459  retailer.  FDA-commissioned state inspectors follow the same procedures when conducting A&L 
460  inspections, except that A&L inspections are conducted without a minor and the inspectors 
461  generally present the retailer with a Notice of Inspection (Form FDA 482).  For inspections that 
462  identify potential violations, the information recorded by the inspectors is transmitted to CTP for 
463  review and evaluation. 
464   
465  Generally, the initial inspection of a retail establishment is either a UB or an A&L inspection.  
466  After a Warning Letter is issued, CTP creates a compliance follow-up inspection assignment of 
467  the establishment in two parts.  UB and A&L inspections at a retail establishment are performed 
468  separately (usually on different days) to verify a retailers compliance with the FD&C Acts 
469  requirements relating to regulated tobacco products.  The inspection is done in two parts because 
470  inspectors often announce themselves and ask questions of the retailer during the A&L part of 
471  the inspection. 
472   
473  38. How does CTP determine that violations occurred?   
474   
475  In general, FDA-commissioned inspectors and minors conduct inspections of tobacco retail 
476  outlets.  The inspectors visit the retail outlets, collect relevant evidence, and report potential 
477  violations to CTP for further review.  Generally, an explanation of the violations observed during 
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478  the inspection at the respondents retail outlet will be included in any Warning Letter or 
479  complaint. 
480     
481  39. Does CTP have evidence of the violations? 
482   
483  Yes.  FDA-commissioned inspectors are instructed to collect evidence, as appropriate, to 
484  document violations found during retail compliance check inspections.  CTP sends a Warning 
485  Letter or files a complaint alleging a violation only when CTP determines that the evidence 
486  shows that there has been a violation.  Some examples of evidence may include: photographs 
487  taken during an inspection, including photographs of the tobacco products purchased by minors; 
488  written statements from inspectors describing their observations; and physical evidence collected 
489  during an inspection. 
490   
491  40. What steps will CTP take after an inspection involving a minor reveals a potential 
492  violation? 
493   
494  Shortly after any inspection in which a retailer sells tobacco products to a minor, CTP issues a 
495  Notice of Compliance Check Inspection informing the retailer of the sale and explaining that 
496  CTP will make a final determination regarding whether there has been a violation of federal law. 
497  The information included in the Notice of Compliance Check Inspection generally will include: 
498   
499    Name of the establishment; 
500    Date and approximate time of the inspection; 
501    Characteristics regarding the clerk who sold to the minor, if known; 
502    Notification of a potential violation; 
503    Photograph of establishment taken at the time of inspection, if available; and 
504    Address of the establishment. 
505   
506  41. Can a respondent see the evidence held by CTP? 
507   
508  Yes.  In accordance with 21 CFR  17.23, no later than 60 days prior to the hearing, or at another 
509  time specified by the ALJ, the respondent may request relevant inspection documents.  
510  Additionally, at least 30 days prior to the hearing, or at another time specified by the ALJ, the 
511  respondent and CTP are required to exchange various types of evidence, including witness lists, 
512  copies of prior written statements of proposed witnesses, and copies of proposed hearing exhibits 
513  (see 21 CFR  17.25(a)).  CTP intends to include some evidentiary documents with the 
514  complaint and cover letter it sends to the respondent when it initially files a case.  Once a case is 
515  closed, certain documents become publicly available.  For additional information on the 
516  exchange of information between the parties, witnesses, and evidence, see 21 CFR  17.25, 
517  17.37, and 17.39. 
518   
519  42. What is the schedule of maximum penalties for violations of part 1140? 
520   
521  The Tobacco Control Act provides that the amount of a civil penalty for violations of part 1140 
522  shall not exceed certain amounts, depending on the number of previous violations, the time 
523  period in which the violations occurred, and other factors (see section 103(q)(2)(A) of the 
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524  Tobacco Control Act; 21 CFR  17.2 (referencing penalty table in 45 CFR  102.3)).  The 
525  Tobacco Control Act also established two schedules for the maximum civil money penalties for 
526  violations of regulations issued under section 906(d) of the FD&C Act, including violations of 
527  part 1140.   
528   
529  In determining the amount of the CMP that will be sought, CTP will use the lower schedule for 
530  all retailers until regulations are developed that establish standards for retailer training programs.  
531  This lower schedule, as set out in section 103(q)(2)(A) of the Tobacco Control Act codified at 
532  FD&C Act Section 303 note, is:7 
533   
534  ...the amount of the civil penalty shall not exceed 
535  (I)  in the case of the first violation, $0.00.  together with the issuance of a 
536  warning letter to the retailer;8 
537  (II)  in the case of a second violation within a 12-month period, $250; 
538  (III)  in the case of a third violation within a 24-month period, $500; 
539  (IV)  in the case of a fourth violation within a 24-month period, $2,000; 
540  (V)  in the case of a fifth violation within a 36-month period, $5,000; and 
541  (VI)  in the case of a sixth or subsequent violation within a 48-month period, 
542  $10,000 as determined by the Secretary on a case-by-case basis. 
543   
544  43. How does CTP determine the amount of the CMP that it will seek in the complaint for 
545  violations of 21 CFR part 1140?   
546   
547  The first time that CTP finds a violation at a retail outlet, its policy is to send a warning letter 
548  rather than seeking a CMP.  If CTP identifies violation(s) at a retail outlet during a follow-up 
549  compliance check or a subsequent inspection at that retail outlet, CTP generally intends to seek 
550  civil money penalties to the extent they are appropriate. If there have been repeated violations at 
551  the outlet and a no-tobacco-sale order would be appropriate in light of the factors discussed in 
552  questions 2 and 6 above, CTP also generally intends to seek a no-tobacco-sale order. See CMP 
553  and NTSO Guidance. 
554   
555  To determine the amount of CMP it will seek, CTP counts violations of the part 1140 regulations 
556  and consults a charging schedule provided in the Tobacco Control Act.  CTP counts only one 
557  regulation violation from the first inspection at a retail outlet, regardless of the number of 
558  regulation violations that were noted and included in a Warning Letter. For any subsequent 
559  inspections, CTP may count any or all violations and its general policy is to count all of them 
560  individually. 
561   
                                                
7 The Civil Money Penalty amounts listed in this document reflect the amounts listed in the statute.  FDA is required 
to update these amounts annually to reflect inflation by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410, 104 Stat. 890 (1990) (codified as amended at 28 U.S.C. 2461 note 2(a)), as amended by the 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of the Bipartisan Budget Act 
of 2015, Public Law 114-74, November 2, 2015).  For the most up to date amounts, please see 45 CFR 102.3 or the 
CTP website at: 
http://www.fda.gov/TobaccoProducts/GuidanceComplianceRegulatoryInformation/ucm232109.htm. 
8 Although the penalty for the first violation is $0.00, consistent with the statute CTP will issue a warning letter. 
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562  Once CTP has counted violations at a retail outlet for the 48-month period that precedes the most 
563  recent violation(s), it consults the following charging schedule to determine the amount it will 
564  seek in a complaint:    
565   
566   
Number of Violations  CMP9 
1  $0.00  (CTP will issue a 
warning letter) 
2 within a 12-month period  $250 
3 within a 24-month period  $500                       
4 within a 24-month period  $2,000 
5 within a 36-month period  $5,000 
6 within a 48-month period  $10,000 
567   
568  Thus, if the respondent receives a Warning Letter after the first inspection that notes four 
569  violations, and CTP notes two more violations during a follow-up inspection within 24 months, 
570  CTP would generally count three of the violations (one for the first inspection and two for the 
571  second), and seek $500 under its policy.  
572     
573  To provide another, more detailed, example:   
574    A Warning Letter was issued for selling cigarettes or smokeless tobacco to a minor (21 
575  CFR 1140.14(a), now 21 CFR 1140.14(a)(1)) and failing to verify photographic 
576  identification (21 CFR 1140.14(b)(1), now 21 CFR 1140.14(a)(2)(i)) during an inspection 
577  on January 1, 2011.10  
578    A two-part follow-up inspection at the same retail outlet, conducted on June 1 and June 7, 
579  2011, observed violations for: 
580    selling to a minor;  
o
581    failing to verify photographic identification; and 
o
582    offering free samples of cigarettes (21 CFR 1140.16(d)(1)). 
o
583    Thus, CTP has observed five violations at the retail outlet. 
584    Under its current policy, CTP would generally count four of the violations in determining 
585  the amount it will seek: one from the Warning Letter and three from the follow-up 
586  inspection. 
587    Applying these facts to the charging schedule, CTP would seek a CMP of $2,000 in the 
588  complaint.  
589   
590  44.  What does the ALJ consider in determining the amount of the CMP to be assessed? 
591   
592  In contested cases, when the ALJ determines that violations have occurred, the ALJ decides the 
593  amount of the CMP to be assessed. The statute requires that the ALJ consider the penalty 
                                                
9 Supra note 7.  
10 Certain of FDAs tobacco regulations in 21 C.F.R. Part 1140 relating to the sale and distribution of cigarettes and 
smokeless tobacco, such as minimum age and identification requirements, were renumbered as a result of the 
Deeming Rule, but the text of those regulations remains substantively the same. 
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594  schedule in the statute as well as any evidence of mitigating factors.  Mitigating factors may 
595  include the following: 
596    nature, circumstances, extent, and gravity of the violation(s),  
597    ability to pay, 
598    effect on ability to continue to do business,  
599    any history of prior violations, 
600    degree of culpability, 
601    the amount of any penalties paid by the retailer to a State for the same violation, 
602    retailers implementation of an employee training program, and  
603    other relevant matters.   
604   
605  See 21 U.S.C. 333(f)(5)(B) and section 103(q)(2)(C) of the Tobacco Control Act; 21 CFR 
606   17.34.  For more information about how CMP amounts are determined, including information 
607  on mitigating factors, see CMP and NTSO Guidance. 
608   
609  45. What does the ALJ consider in determining whether to impose an NTSO, the duration 
610  of an NTSO, and whether to compromise, modify, or terminate an NTSO?  
611   
612  In contested cases, when the ALJ determines that five or more repeated violations have occurred 
613  in a 36-month period, the ALJ decides the duration of the NTSO. 
614   
615  In determining the duration of an NTSO, the ALJ must take into account the nature, 
616  circumstances, extent, and gravity of the violations and, with respect to the violator, effect on 
617  ability to continue to do business, any history of prior violations, the degree of culpability, and 
618  such other matters as justice may require (section 303(f)(5)(B) of the FD&C Act). 
619   
620  In determining whether to impose a no-tobacco-sale order, or compromise, modify, or terminate 
621  a previously issued no-tobacco-sale order, the ALJ must consider whether a retailer has taken the 
622  effective steps to prevent violations of the minimum age requirements for the sale of tobacco 
623  products, including: 
624    adopting and enforcing a written policy against sales to minors; 
625    informing its employees of all applicable laws; 
626    establishing disciplinary sanctions for employee noncompliance; and 
627    requiring its employees to verify age by way of photographic identification or electronic 
628  scanning device. 
629  Section 103(q)(1)(G) of the Tobacco Control Act. 
630   
631  Provisions allowing the outlet, after a specified period of time, to request that the Secretary 
632  compromise, modify, or terminate the order must be included in an NTSO that permanently 
633  prohibits an individual retail outlet from selling tobacco products (section 303(f)(5)(B) of the 
634  FD&C Act). 
635   
636  46. If the respondent has already paid a CMP, can the respondent be assessed another one? 
637   
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638  Yes, CTP is continuing to conduct inspections. If CTP identifies violation(s) at a retail outlet 
639  during a follow-up compliance check, or at a subsequent inspection at that retail outlet, it 
640  generally intends to seek civil money penalties to the extent they are appropriate. If there have 
641  been repeated violations at the outlet and a no-tobacco-sale order would be appropriate, as 
642  discussed in 2. What is a no-tobacco-sale order (NTSO)? and 6. Why did CTP serve this 
643  complaint?, CTP also generally intends to seek a no-tobacco-sale order. See CMP and NTSO 
644  Guidance. 
645   
646  Whether the respondent receives another complaint for CMP, and the amount of the CMP 
647  sought, will depend on the number of violations observed at the outlet, the timing of the 
648  violations, and other factors. See CMP and NTSO Guidance for additional information. 
649   
650  47. What happens if the respondent does not have any violations in follow-up inspection? 
651   
652  If no violations are observed in a follow-up inspection, the retail outlet will appear on the CTP 
653  inspection database as having no violations observed.  The inspection database can be found at 
654  the following website 
655  http://www.accessdata.fda.gov/scripts/oce/inspections/oce_insp_searching.cfm.   
656   
657  An FDA-commissioned inspector may visit the retail outlet again in the future to evaluate 
658  continued compliance. If violations are observed during future inspections, CTP may seek to 
659  impose additional CMPs.  If there have been repeated violations at the outlet and a no-tobacco-
660  sale order would be appropriate as discussed in 2. What is a no-tobacco-sale order (NTSO)? 
661  and 6. Why did CTP serve this complaint?, CTP also generally intends to seek a no-tobacco-
662  sale order. Additionally, if violations are observed during future inspections, CTP may initiate 
663  other enforcement actions in Federal court. 
664   
665  The respondents violation history does not reset to zero violations if there is a nonviolative 
666  inspection, and, in regard to CMPs, proceeds according to the schedule listed in 42. What is the 
667  schedule of maximum civil money penalties for violations of part 1140? 
668   
669  48. How does CTP count violations at a retail outlet that is part of a chain when it seeks 
670  CMPs under part 1140? 
671   
672  CTPs current policy is to consider each retail location to be a separate retail outlet for purposes 
673  of counting CMP violations under the schedule of maximum penalties described above.  A retail 
674  chain may receive multiple separate CMP complaints for violations of part 1140, but for 
675  purposes of counting violations for CMPs, each retail outlet would be treated individually.  
676  Similarly, under this policy, a chain could also expect to receive separate Warning Letters for 
677  each outlet where violations are found. 
678   
679   
680     
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681  Document History: 
682    December 2013  First edition of final guidance was issued. 
683    June 2014  Pages 12-13 were updated with new Civil Money Penalty amounts that 
684  reflect inflation, as required by the Federal Civil Penalties Inflation Adjustment Act; 
685  references to CTPs address updated throughout the document. 
686    May 2015  Questions and answers were updated to include no-tobacco-sale order 
687  procedures, which are the same as those used in the Civil Money Penalties process 
688  (section 303(f)(8) of the FD&C Act). Minor editorial changes and clarifications were 
689  made. 
690    December 2016 - Throughout the document, non-substantive edits have been made to 
691  improve the general clarity of the document and FDA has been replaced with CTP 
692  where appropriate to clarify that CTP is the Complainant in CMP/NTSO actions; Page 1 
693  was updated to include covered tobacco products in the list of tobacco products 
694  regulated under 21 CFR part 1140; Footnote 2 was edited to include the Federal Register 
695  citation for the Deeming Rule that amended 21 CFR part 1140; Page 3 was updated to 
696  reflect CTPs current practice regarding where and to which entity it sends complaints; 
697  Page 7 was edited to reflect the fact that an ALJ may also decide a case on the basis of a 
698  motion for summary decision; Page 8 was edited to remove former question 23 because 
699  it repeated the same information contained in current question 45; Pages 13-14 were 
700  updated to reflect the statutory CMP amounts and remove the specific citations from the 
701  example; Footnotes 7 and 9 were updated to reflect amendments to the Civil Money 
702  Penalty Inflation Adjustment Act and to include reference to the current CMP amounts 
703  listed on the CTP website. 
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