Panel Review Under Article 1904 of the North American Free Trade Agreement

SUMMARY: Title IV of the North American Free Trade Agreement

Implementation Act of 1993 (``NAFTA Act''), establishes procedures for

review by a binational panel of United States antidumping and

countervailing duty final determinations involving products from Canada

or the United Mexican States (``free trade area countries'' as defined

by 19 U.S.C. 1516a(f)(10)) and for requesting panel review of free

trade area country antidumping and countervailing duty final

determinations involving products of the United States. Title IV of the

NAFTA Act implements Chapter Nineteen of the North American Free Trade

Agreement (``Agreement''). As authorized by section 402(g) of the NAFTA

Act, these regulations are intended to implement certain administrative

procedures required by Article 1904 of the Agreement and the NAFTA Act.

These regulations replace corresponding regulations issued pursuant to

the United States-Canada Free Trade Agreement.

DATES: These regulations take effect on January 1, 1994, or on the date

that the Agreement enters into force if that date is subsequent to

January 1, 1994. The International Trade Administration will publish a

document giving notice of the effective date of these regulations if

the effective date is not January 1, 1994.

Written comment must be received not later than March 2, 1994.

ADDRESSES: Address written comments to Stacy J. Ettinger, Attorney-

Advisor, Office of the Chief Counsel for Import Administration, room B-

099, U.S. Department of Commerce, 14th and Constitution Avenue, NW.,

Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: Lisa B. Koteen, 202-482-0836, or Stacy

J. Ettinger, 202-482-4618.

SUPPLEMENTARY INFORMATION:

Background

Chapter Nineteen of the Agreement establishes a mechanism for

resolving disputes between the United States and free trade area

countries with respect to antidumping and countervailing duty cases.

The central feature of the mechanism is the replacement of domestic

judicial review of determinations in antidumping and countervailing

duty cases involving imports from free trade area countries with review

by independent binational panels. The United States and the involved

free trade area country will continue to apply their own national

antidumping and countervailing duty laws to goods imported from the

other country. In such cases, independent binational panels acting in

place of national courts will expeditiously review final determinations

under these laws to decide whether they are consistent with the

antidumping or countervailing duty law of the country that made the

determination. These determinations include final antidumping and

countervailing duty determinations by the Department of Commerce (``the

Department''), and final injury determinations by the International

Trade Commission.

The Agreement provides that only the involved governments may

invoke the panel review process; however, the governments of the

involved countries will automatically trigger panel review in response

to a timely request from any person who otherwise could have challenged

the determination in court. Counsel for (or representative of)

interested parties that were parties to the administrative proceeding

that is being challenged will argue before the panel, as they would

before a court. The Agreement also requires that the United States and

the free trade area countries protect sensitive business information

against unlawful disclosure in the panel review process.

Title IV of the NAFTA Act (Pub. L. 103-182, 107 Stat. 2057) amends

United States law to implement Chapter Nineteen of the Agreement by

limiting judicial review in cases involving free trade area country

merchandise, establishing procedures whereby private parties may

request binational panel review, providing an organizational structure

for administering United States responsibilities under Chapter

Nineteen, and making other conforming amendments to United States law.

More specifically, section 402(g) of the NAFTA Act authorizes the

Department, as the administering authority under Title VII of the

Tariff Act of 1930 (``Act''), to issue regulations to implement Chapter

Nineteen of the Agreement.

These regulations are intended to implement certain administrative

procedures required by Chapter Nineteen of the Agreement before an

administrative proceeding has been sent to the Court of International

Trade or a binational panel, as well as the administrative

responsibilities of the Department that continue during and after panel

review. These regulations replace corresponding regulations issued

pursuant to the United States-Canada Free Trade Agreement. These

regulations are necessary to provide for notice of intent to seek

judicial review, request for panel review, notice of receipt by the

Government of a free trade area country of scope determinations,

continued suspension of liquidation, release of business proprietary

and privileged information under protective order during a panel

review, and sanctions for violations of such protective orders. The

Department currently is reviewing procedures for release of business

proprietary information under protective order during antidumping and

countervailing duty administrative proceedings. Any changes made in

procedures as a result of that review will be considered for

incorporation into these regulations. The procedures for proceedings

before binational panels are being implemented through Rules of

Procedure negotiated by the United States and the free trade area

countries. These regulations complement the Rules of Procedure and

should be used in conjunction with the Rules.

Administrative Procedure Act

This interim rule is exempt from all requirements of section 553 of

the Administrative Procedure Act (5 U.S.C. 553), including notice and

opportunity to comment and delay of the effective date, because it

implements Chapter Nineteen of the Agreement and thus relates to a

foreign affairs function of the United States.

Executive Order 12866

This rule was not reviewed by the Office of Management and Budget

under Executive Order 12866.

Paperwork Reduction Act

This rule does not contain a collection of information subject to

the requirements of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501

et seq.). The collections of information contained in these regulations

occur within the course of ongoing investigations or actions initiated

prior to the determinations that are reviewable by binational panels

under the Agreement. Thus they are not covered by the Paperwork

Reduction Act. See 5 CFR 1320.3(c).

Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because

the rule was not required to be promulgated as a proposed rule before

issuance as a final rule by section 553 of the Administrative Procedure

Act or by any other law. Accordingly, neither an initial nor final

Regulatory Flexibility Analysis has been or will be prepared.

Executive Order 12612

This rule does not contain policies with Federalism implications

sufficient to warrant preparation of a Federalism assessment under

Executive Order 12612 (52 FR 41685, October 30, 1987).

Entry Into Force

It is anticipated that the Agreement will enter into force on

January 1, 1994. The Office of the United States Trade Representative

will confirm in a Federal Register notice the precise date of the

Agreement's entry into force.

List of Subjects in 19 CFR Part 356

Antidumping, Canada, Countervailing duty, Imports, Judicial review,

Penalties, Trade agreements, United Mexican States.

19 CFR Part 356 is revised to read as follows:

PART 356--PROCEDURES AND RULES FOR IMPLEMENTING ARTICLE 1904 OF THE

NORTH AMERICAN FREE TRADE AGREEMENT

Subpart A--Scope and Definitions

Sec.

356.1 Scope.

356.2 Definitions.

Subpart B--Procedures for Commencing Review of Final Determinations

356.3 Notice of intent to commence judicial review.

356.4 Request for panel review.

356.5 [Reserved]

356.6 Receipt of notice of a scope determination by the Government

of a FTA country.

356.7 Request to determine when the Government of a FTA country

received notice of a scope determination.

356.8 Continued suspension of liquidation.

Subpart C--Proprietary and Privileged Information

356.9 Persons authorized to receive proprietary information.

356.10 Procedures for obtaining access to proprietary information.

356.11 Procedures for obtaining access to privileged information.

Subpart D--Violation of a Protective Order or a Disclosure Undertaking

356.12 Sanctions for violation of a protective order or disclosure

undertaking.

356.13 Suspension of rules.

356.14 Report of violation and investigation.

356.15 Initiation of proceedings.

356.16 Charging letter.

356.17 Request to charge.

356.18 Interim sanctions.

356.19 Request for a hearing.

356.20 Discovery.

356.21 Subpoenas.

356.22 Prehearing conference.

356.23 Hearing.

356.24 Proceeding without a hearing.

356.25 Witnesses.

356.26 Initial decision.

356.27 Final decision.

356.28 Reconsideration.

356.29 Confidentiality.

356.30 Sanctions for violations of a protective order for

privileged information.

Authority: 19 U.S.C. 1516a and 1677f(f), unless otherwise noted.

Subpart A--Scope and Definitions

Sec. 356.1 Scope.

This part sets forth procedures and rules for the implementation of

Article 1904 of the North American Free Trade Agreement under the

Tariff Act of 1930, as amended by title IV of the North American Free

Trade Agreement Implementation Act of 1993 (19 U.S.C. 1516a and

1677f(f)). This part is authorized by section 402(g) of the North

American Free Trade Agreement Implementation Act of 1993.

Sec. 356.2 Definitions.

For purposes of this part:

(a) Act means the Tariff Act of 1930, as amended;

(b) Administrative law judge means the person appointed under 5

U.S.C. 3105 who presides over the taking of evidence as provided by

subpart D of this part;

(c) Affected party means a person against whom sanctions have been

proposed for alleged violation of a protective order or disclosure

undertaking but who is not a charged party;

(d) Agreement means the North American Free Trade Agreement between

Canada, the United Mexican States and the United States, signed on

December 17, 1992; or, with respect to binational panel or

extraordinary challenge proceedings underway as of such date, or any

binational panel or extraordinary challenge proceedings that may

proceed between Canada and the United States following any withdrawal

from the Agreement by Canada or the United States, the United States-

Canada Free Trade Agreement between Canada and the United States, which

came into force on January 1, 1989;

(e) APO Sanctions Board means the Administrative Protective Order

Sanctions Board;

(f) Article 1904 Panel Rules means the NAFTA Article 1904 Panel

Rules, negotiated pursuant to Article 1904 of the North American Free

Trade Agreement between Canada, the United Mexican States and the

United States, and any subsequent amendments; or, with respect to

binational panel proceedings underway as of such date, or any

binational panel proceedings that may proceed between the Canada and

the United States following any withdrawal from the Agreement by Canada

or the United States, the Article 1904 Panel Rules, as amended, which

came into force on January 1, 1989;

(g) Authorized agency of a free trade area country means:

(1) In the case of Canada, any Canadian government agency that is

authorized by Canadian law to request the Department to initiate

proceedings to impose sanctions for an alleged violation of a

disclosure undertaking; and

(2) In the case of Mexico, any Mexican government agency that is

authorized by Mexican law to request the Department to initiate

proceedings to impose sanctions for an alleged violation of a

disclosure undertaking;

(h) Binational panel means a binational panel established pursuant

to Annex 1901.2 to Chapter Nineteen of the Agreement for the purpose of

reviewing a final determination;

(i) Charged party means a person who is charged by the Deputy Under

Secretary with violating a protective order or a disclosure

undertaking;

(j) Chief Counsel means the Chief Counsel for Import

Administration, U.S. Department of Commerce, or designee;

(k) Days means calendar days, except that a deadline which falls on

a weekend or holiday shall be extended to the next working day;

(l) Department means the U.S. Department of Commerce;

(m) Deputy Under Secretary means the Deputy Under Secretary for

International Trade, U.S. Department of Commerce;

(n) Director means an Office Director under the Deputy Assistant

Secretary for Investigations, U.S. Department of Commerce, or designee,

if the panel review is of a final determination by the Department under

section 751 of the Act, or an Office Director under the Deputy

Assistant Secretary for Compliance, or designee, if the panel review is

of a final determination by the Department under section 705(a) or

735(a) of the Act;

(o) Disclosure undertaking means:

(1) In the case of Canada, the Canadian mechanism for protecting

proprietary or privileged information during proceedings pursuant to

Article 1904 of the Agreement, as prescribed by subsection 77.21(2) of

the Special Import Measures Act, as amended; and

(2) In the case of Mexico, the Mexican mechanism for protecting

proprietary or privileged information during proceedings pursuant to

Article 1904 of the Agreement, as prescribed by the Ley de Comercio

Exterior and its regulations;

(p) Extraordinary challenge committee means the committee

established pursuant to Annex 1904.13 to Chapter Nineteen of the

Agreement to review decisions of a panel or conduct of a panelist;

(q) Final determination means ``final determination'' as defined by

Article 1911 of the Agreement;

(r) Free trade area country or FTA country means ``free trade area

country'' as defined by section 516A(f)(10) of the Act (19 U.S.C.

1516a(f)(10));

(s) Investigating authority means the competent investigating

authority that issued the final determination subject to review and

includes, in respect of the issuance, amendment, modification or

revocation of a protective order or disclosure undertaking, any person

authorized by the investigating authority;

(t) Lesser-included sanction means a sanction of the same type but

of more limited scope than the proposed sanction for violation of a

protective order or disclosure undertaking; thus, a one-year bar on

representation before the Department is a lesser-included sanction of a

proposed seven-year bar;

(u) Letter of transmittal means a document marked according to the

requirements of 19 CFR 353.31(e)(2)(i)-(v) or 355.31(e)(2)(i)-(v);

(v) Official publication means:

(1) In the case of Canada, the Canada Gazette;

(2) In the case of Mexico, the Diario Oficial de la Federacion; and

(3) In the case of the United States, the Federal Register;

(w) Panel review means review of a final determination pursuant to

Chapter Nineteen of the Agreement;

(x) Party to the proceeding means a person that would be entitled,

under section 516A of the Act (19 U.S.C. 1516a), to commence

proceedings for judicial review of a final determination;

(y) Participant means a party to the proceeding that files a

Complaint or a Notice of Appearance in a panel review, and the

Department;

(z) Parties means, in an action under subpart D of this part, the

Department and the charged party or affected party;

(aa) Person means, an individual, partnership, corporation,

association, organization, or other entity;

(bb) Privileged information means:

(1) With respect to a panel review of a final determination made in

Canada, information of the investigating authority that is subject to

the solicitor-client privilege under the laws of Canada, or that

constitutes part of the deliberative process with respect to the final

determination, and with respect to which the privilege has not been

waived;

(2) With respect to a panel review of a final determination made in

Mexico:

(i) Information of the investigating authority that is subject to

attorney-client privilege under the laws of Mexico; or

(ii) Internal communications between officials of the Secretaria de

Comercio y Fomento Industrial in charge of antidumping and

countervailing duty investigations or communications between those

officials and other government officials, where those communications

constitute part of the deliberative process with respect to the final

determination; and

(3) With respect to a panel review of a final determination made in

the United States, information of the investigating authority that is

subject to the attorney-client, attorney work product or government

deliberative process privilege under the laws of the United States and

with respect to which the privilege has not been waived;

(cc) Proprietary information means:

(1) With respect to a panel review of a final determination made in

Canada, information referred to in subsection 84(3) of the Special

Import Measures Act, as amended, or subsection 45(3) of the Canadian

International Trade Tribunal Act, as amended, with respect to which the

person who designated or submitted the information has not withdrawn

the person's claim as to the confidentiality of the information;

(2) With respect to a panel review of a final determination made in

Mexico, informacion confidencial, as defined under article 80 of the

Ley de Comercio Exterior and its regulations; and

(3) With respect to a panel review of a final determination made in

the United States, business proprietary information under section

777(f) of the Act (19 U.S.C. 1677f(f)) and information the disclosure

of which the Department has decided is limited under the procedures

adopted pursuant to Article 1904.14 of the Agreement, including

business or trade secrets; production costs; terms of sale; prices of

individual sales, likely sales, or offers; names of customers,

distributors, or suppliers; exact amounts of the subsidies received and

used by a person; names of particular persons from whom proprietary

information was obtained; and any other business information the

release of which to the public would cause substantial harm to the

competitive position of the submitter;

(dd) Protective order means a protective order issued by the

Department under 19 CFR 356.10(c) or 356.11(c);

(ee) Scope determination means a determination by the Department,

reviewable under section 516A(a)(2)(B)(vi) of the Act (19 U.S.C.

1516a(a)(2)(B)(vi), as to whether a particular type of merchandise is

within the class or kind of merchandise described in an existing

finding of dumping or an antidumping or countervailing duty order

covering free trade area country merchandise;

(ff) Secretariat means the Secretariat established pursuant to

Article 2002 of the Agreement and includes the Secretariat sections

located in Canada, Mexico and the United States;

(gg) Secretary means the Secretary of the Canadian section of the

Secretariat, the Secretary of the Mexican section of the Secretariat,

or the Secretary of the United States section of the Secretariat and

includes any person authorized to act on behalf of the Secretary;

(hh) Service address means the address of the counsel of record for

a person, including any facsimile number submitted with that address,

or, where a person is not represented by counsel, the address set out

by the person in a Request for Panel Review, Complaint or Notice of

Appearance as the address at which the person may be served, including

any facsimile number submitted with that address, or where a Change of

Service Address has been filed by a person, the new service address set

out as the service address in that form, including any facsimile number

submitted with that address;

(ii) Service list means, with respect to a panel review of a final

determination made in the United States, the list maintained by the

investigating authority of persons who have been served in the

proceeding leading to the final determination;

(jj) Under Secretary means the Under Secretary for International

Trade, U.S. Department of Commerce, or designee;

(kk) United States section of the Secretariat means, for the

purposes of filing, United States Secretary, NAFTA Secretariat, room

2061, U.S. Department of Commerce, 14th and Constitution Avenue, NW.,

Washington, DC 20230.

Subpart B--Procedures for Commencing Review of Final Determinations

Sec. 356.3 Notice of intent to commence judicial review.

A party to a proceeding who intends to commence judicial review of

a final determination made in the United States shall file a Notice of

Intent to Commence Judicial Review, which shall contain such

information, and be in such form, manner, and style, including service

requirements, as prescribed by the Article 1904 Panel Rules, within 20

days after:

(a) The date of publication in the Federal Register of the final

determination; or

(b) The date on which the notice of the final determination was

received by the Government of the FTA country if the final

determination was not published in the Federal Register.

Sec. 356.4 Request for panel review.

A party to a proceeding who seeks panel review of a final

determination shall file a Request for Panel Review, which shall

contain such information, and be in such form, manner, and style,

including service requirements, as prescribed by the Article 1904 Panel

Rules, within 30 days after:

(a) The date of publication in the official publication of the

final determination; or

(b) The date on which the notice of the final determination was

received by the United States Government or the Government of the FTA

country if the final determination was not published in the official

publication.

Sec. 356.5 [Reserved.]

Sec. 356.6 Receipt of notice of a scope determination by the

Government of a FTA country.

(a) Where the Department has made a scope determination, notice of

such determination shall be deemed received by the Government of a FTA

country when a certified copy of the determination is delivered to the

chancery of the Embassy of the FTA country during its normal business

hours.

(b) Where feasible, the Department, or an agent therefor, will

obtain a certificate of receipt signed by a person authorized to accept

delivery of documents to the Embassy of the FTA country acknowledging

receipt of the scope determination. The certificate will describe

briefly the document being delivered to the Embassy of the FTA country,

state the date and time of receipt, and include the name and title of

the person who signs the certificate. The certificate will be retained

by the Department in its public files pertaining to the scope

determination at issue.

Sec. 356.7 Request to determine when the Government of a FTA country

received notice of a scope determination.

(a) Pursuant to section 516A(g)(10) of the Act (19 U.S.C.

1516a(g)(10)), any party to the proceeding may request in writing from

the Department the date on which the Government of a FTA country

received notice of a scope determination made by the Department.

(b) A request shall be made by filing a written request and the

correct number of copies in accordance with the requirements set forth

in 19 CFR 353.31(d) and (e)(2) or 355.31(d) and (e)(2) with the

Secretary of Commerce, Attention: Import Administration, Central

Records Unit, room B-099, U.S. Department of Commerce, 14th and

Constitution Avenue, NW., Washington, DC 20230. A letter of transmittal

must be bound to the original and each copy as the first page of the

request.

(c) The requesting party shall serve a copy of the Request to

Determine When the Government of [insert name of applicable FTA

country] Received Notice of a Scope Determination by first class mail

or personal service on any interested party on the Department's service

list in accordance with the service requirements listed in 19 CFR

353.31(g) or 355.31(g).

(d) The Department will respond to the request referred to in

paragraph (b) of this section within five business days of receipt.

Sec. 356.8 Continued suspension of liquidation.

(a) In general. In the case of an administrative determination

specified in clause (iii) or (vi) of section 516A(a)(2)(B) of the Act

(19 U.S.C. 1516a(a)(2)(B)(iii) and (vi)) and involving free trade area

country merchandise, the Department shall not order liquidation of

entries of merchandise covered by such a determination until the forty-

first day after the date of publication of the notice described in

clause (iii) or receipt of the determination described in clause (vi),

as appropriate. If requested, the Department will order the continued

suspension of liquidation of such entries in accordance with the terms

of paragraphs (b), (c), and (d) of this section.

(b) Eligibility to request continued suspension of liquidation. (1)

A participant in a binational panel review that was a domestic party to

the proceeding, as described in section 771(9)(C), (D), (E), (F), or

(G) of the Act (19 U.S.C. 1677(9)(C), (D), (E), (F) and (G)), may

request continued suspension of liquidation of entries of merchandise

covered by the administrative determination under review by the panel

and that would be affected by the panel review.

(2) A participant in a binational panel review that was a party to

the proceeding, as described in section 771(9)(A) of the Act (19 U.S.C.

1677(9)(A)), may request continued suspension of liquidation of the

merchandise which it manufactured, produced, exported, or imported and

which is covered by the administrative determination under review by

the panel.

(c) Request for continued suspension of liquidation. A request for

continued suspension of liquidation must include:

(1) The name of the final determination subject to binational panel

review and the case number assigned by the Department;

(2) The caption of the binational panel proceeding;

(3) The name of the requesting participant;

(4) The requestor's status as a party to the proceeding and as a

participant in the binational panel review; and

(5) The specific entries to be suspended by name of manufacturer,

producer, exporter, or U.S. importer.

(d) Filing and service. (1) A request for Continued Suspension of

Liquidation must be filed with the Assistant Secretary for Import

Administration, room B-099, 14th and Constitution Avenue, NW.,

Washington, DC 20230, in accordance with the requirements set forth in

19 CFR 353.31(d) and (e)(2) or 355.31(d) and (e)(2). A letter of

transmittal must be bound to the original and each copy as the first

page of the request. The envelope and the first page of the request

must be marked: Panel Review--Request for Continued Suspension of

Liquidation. The request may be made no earlier than the date on which

the first request for binational panel review is filed.

(2) The requesting party shall serve a copy of the Request for

Continued Suspension of Liquidation on the United States Secretary and

all parties to the proceeding in accordance with the requirements of 19

CFR 353.31(g) or 19 CFR 355.31(g).

(e) Termination of Continued Suspension. Upon completion of the

panel review, including any panel review of remand determinations and

any review by an extraordinary challenge committee, the Department will

order liquidation of entries, the suspension of which was continued

pursuant to this section.

Subpart C--Proprietary and Privileged Information

Sec. 356.9 Persons authorized to receive proprietary information.

Persons described in paragraphs (a), (d), (e), (f) and (g) of this

section shall, and persons described in paragraphs (b) and (c) of this

section may, be authorized by the Department to receive access to

proprietary information if they comply with this subpart and such other

conditions imposed upon them by the Department:

(a) The members of, and appropriate staff of, a binational panel or

extraordinary challenge committee;

(b) Counsel to participants in panel reviews and professionals

retained by, or under the direction or control of such counsel,

provided that the counsel or professional does not participate in

competitive decision-making activity (such as advice on production,

sales, operations, or investments, but not legal advice) for the

participant represented or for any person who would gain competitive

advantage through knowledge of the proprietary information sought;

(c) Other persons who are retained or employed by and under the

direction or control of a counsel or professional, panelist, or

committee member who has been issued a protective order, such as

paralegals, law clerks, and secretaries, if such other persons are:

(1) Not involved in the competitive decision-making of a

participant to the panel review or for any person who would gain

competitive advantage through knowledge of the proprietary information

sought; and

(2) Have agreed to be bound by the terms set forth on the

application for protective order of the counsel or professional,

panelist, or committee member;

(d) Each Secretary and every member of the staff of the

Secretariat;

(e) Such officials of the United States Government (other than an

officer or employee of the investigating authority that issued the

final determination subject to review) as the United States Trade

Representative informs the Department require access to proprietary

information for the purpose of evaluating whether the United States

should seek an extraordinary challenge committee review of a panel

determination;

(f) Such officials of the Government of a FTA country as an

authorized agency of the FTA country informs the Department require

access to proprietary information for the purpose of evaluating whether

the FTA country should seek an extraordinary challenge committee review

of a panel determination; and

(g) Every court reporter, interpreter and translator employed in a

panel or extraordinary challenge committee review.

Sec. 356.10 Procedures for obtaining access to proprietary

information.

(a) Persons who must file an application for disclosure under

protective order. In order to be permitted access to proprietary

information in the administrative record of a final determination under

review by a panel, all persons described in Secs. 356.9 (a), (b), (d),

(e), (f) and (g) shall file an application for a protective order. The

procedures for applying for a protective order described in paragraph

(b) of this section apply as well to amendments or modifications filed

by persons described in Sec. 356.9.

(b) Procedures for applying for a protective order--(1) Contents of

applications. (i) The Department has adopted application forms for

disclosure of proprietary information which are available from the

United States section of the Secretariat or the Central Records Unit,

room B-099, U.S. Department of Commerce, 14th and Constitution Avenue,

NW., Washington, DC 20230. The application forms may be amended from

time to time.

(ii) Such forms require the applicant to submit a personal sworn

statement stating, in addition to such other terms as the Department

may require, that the applicant shall:

(A) Not disclose any proprietary information obtained under

protective order and not otherwise available to the applicant, to any

person other than:

(1) An official of the Department involved in the particular panel

review in which the proprietary information is part of the

administrative record;

(2) The person from whom the information was obtained;

(3) A person who has been granted access to the proprietary

information at issue under Sec. 356.9; and

(4) A person employed by and under the direction or control of a

counsel or professional, panelist, or committee member who has been

issued a protective order, such as a paralegal, law clerk, or secretary

if such person:

(i) Is not involved in competitive decision-making for a

participant in the panel review or for any person that would gain

competitive advantage through knowledge of the proprietary information

sought; and

(ii) Has agreed to be bound by the terms set forth in the

application for protective order by the counsel, professional,

panelist, or committee member;

(B) Not use any of the proprietary information not otherwise

available to the applicant for purposes other than proceedings pursuant

to Article 1904 of the Agreement;

(C) Upon completion of the panel review, or at such earlier date as

may be determined by the Department, return to the Department or

certify to the Department the destruction of all documents released

under the protective order and all other documents containing the

proprietary information (such as briefs, notes, or charts based on any

such information received under the protective order); and

(D) Acknowledge that breach thereof may subject the signatory to

sanctions under Sec. 356.12.

(2) Timing of application for disclosure under protective order--

(i) Persons described in Sec. 356.9(a) (panelists, etc.). A person

described in Sec. 356.9(a) may file an application after a Notice of

Request for Panel Review has been filed with the Secretariat.

(ii) Persons described in Sec. 356.9(b) (counsel, etc.). A person

described in Sec. 356.9(b) may file an application at any time but not

before that person files a Complaint or a Notice of Appearance.

(iii) Persons described in Sec. 356.9(d) (Secretaries, etc.). A

person described in Sec. 356.9(d) shall file an application immediately

upon assuming official responsibilities in the Secretariat.

(iv) Persons described in Sec. 356.9 (e), (f) or (g) (designated

Government officials or court reporters, etc.). A person described in

Sec. 356.9 (e), (f) or (g) shall file an application before seeking or

obtaining access to proprietary information.

(3) Filing of applications. A person described in Sec. 356.9 (a),

(b), (d), (e), (f) or (g) shall file the completed original and five

copies of an application with the United States section of the

Secretariat which, in turn, shall submit the original and one copy of

the application to the Department. A letter of transmittal must be

bound to the original and each copy as the first page of the document.

(4) Service of applications--(i) Persons described in

Secs. 356.9(b) (counsel, etc.). A person described in Sec. 356.9(b) who

files an application before the expiration of the time period fixed

under the Article 1904 Panel Rules for filing a Notice of Appearance in

the panel review shall serve one copy of the application on each person

listed on the service list in accordance with paragraphs (b)(4) (ii)

and (iii) of this section. In any other case, such person shall serve

one copy of the application on each participant, other than the

investigating authority, in accordance with paragraphs (b)(4) (ii) and

(iii) of this section.

(ii) Method of service. A document may be served by:

(A) Delivering a copy of the document to the service address of the

participant;

(B) Sending a copy of the document to the service address of the

participant by facsimile transmission or by expedited delivery courier

or expedited mail service; or

(C) Personal service on the participant.

(iii) Proof and date of service. A proof of service shall appear

on, or be affixed to, the document. Where a document is served by

expedited delivery courier or expedited mail service, the date of

service set out in the affidavit of service or certificate of service

shall be the day on which the document is consigned to the expedited

delivery courier service or expedited mail service.

(5) Release to employees of panelists, committee members, and

counsel or professionals. A person described in Sec. 356.9(c),

including a paralegal, law clerk, or secretary, may be permitted access

to proprietary information disclosed under protective order by the

counsel, professional, panelist, or extraordinary challenge committee

member who retains or employs such person, if such person has agreed to

the terms of the protective order issued to the counsel, professional,

panelist, or extraordinary challenge committee member, by signing and

dating a completed copy of the application for protective order of the

representative counsel, professional, panelist or extraordinary

challenge committee member in the location indicated in that

application.

(6) Counsel or professional who retains access to proprietary

information under a protective order issued during the administrative

proceeding. A person described in Sec. 356.9(b) who has been granted

access to proprietary information under protective order during an

administrative proceeding that resulted in a final determination that

becomes the subject of panel review may, if permitted by the terms of

the protective order previously issued by the Department, retain such

information until the applicant receives a protective order under this

part.

(c) Issuance and service of protective orders--(1) Persons

described in Sec. 356.9(a) (panelists, etc.). (i) Upon receipt by the

Department of an application from a person described in Sec. 356.9(a),

the Department will issue a protective order authorizing disclosure of

proprietary information included in the administrative record of the

final determination that is the subject of the panel review at issue.

The Department shall transmit the original and four copies of the

protective order to the United States section of the Secretariat which,

in turn, shall transmit the original to the applicant and serve one

copy of the order on each participant, other than the investigating

authority, in accordance with paragraphs (b)(4) (ii) and (iii) of this

section.

(ii) A member of a binational panel or extraordinary challenge

committee proceeding initiated under the United States-Canada Free

Trade Agreement to whom the Department issues a protective order must

countersign the protective order and return one copy of the

countersigned protective order to the United States section of the

Secretariat.

(2) Persons described in Secs. 356.9 (b) or (c) (counsel, etc., or

paralegals, etc.)--(i) Opportunity to object to disclosure. The

Department will not rule on an application filed by a person described

in Sec. 356.9(b) until at least ten days after the request is filed,

unless there is compelling need to rule more expeditiously. Unless the

Department has indicated otherwise, any person may file an objection to

the application within seven days of filing of the application. Any

such objection shall state the specific reasons in the view of such

person why the application should not be granted. One copy of the

objection shall be served on the applicant and on all persons who were

served with the application. Service shall be made in accordance with

paragraphs (b)(4) (ii) and (iii) of this section. Any reply to an

objection will be considered if it is filed before the Department

renders a decision.

(ii) Timing of decisions on applications. Normally, the Department

will render a decision to approve or deny an application within 14

days. If any person files an objection, the Department will normally

render the decision within 30 days.

(iii) Approval of applications. If appropriate, the Department will

issue a protective order permitting the release of proprietary

information to the applicant.

(iv) Denial of applications. If the Department denies an

application, it shall issue a letter notifying the applicant of its

decision and the reasons therefor.

(v) Issuance of protective orders. If the Department issues a

protective order to a person described in Sec. 356.9(b), that person

shall immediately file four copies of the protective order with the

United States section of the Secretariat and shall serve one copy of

the order on each participant, other than the investigating authority,

in accordance with paragraphs (b)(4) (ii) and (iii) of this section.

(3) Persons described in Sec. 356.9 (d) or (g) (Secretaries, etc.,

or court reporters, etc.). Upon receipt by the Department of an

application from a person described in Sec. 356.9 (d) or (g), the

Department will issue a protective order authorizing disclosure of

proprietary information to the applicant. The Department shall transmit

the original and four copies of the protective order to the United

States section of the Secretariat.

(4) Persons described in Sec. 356.9 (e) or (f) (designated

Government officials). (i) Upon receipt by the Department of an

application from a person described in Sec. 356.9 (e) or (f), the

Department will issue a protective order authorizing disclosure of

proprietary information included in the record of the panel review at

issue. The Department shall transmit the original and four copies of

the protective order to the United States section of the Secretariat

which, in turn, shall transmit the original to the applicant and serve

one copy of the document on each participant, other than the

investigating authority, in accordance with paragraphs (b)(4) (ii) and

(iii) of this section.

(d) Modification or revocation of protective orders--(1)

Notification. If any person believes that changed conditions of fact or

law, or the public interest, may require that a protective order issued

pursuant to paragraph (c) of this section be modified or revoked, in

whole or in part, such person may notify the Department in writing. The

notification shall state the changes desired and the changed

circumstances warranting such action and shall include materials and

argument in support thereof. Such notification shall be served by the

person submitting it upon the person to whom the protective order was

issued. Responses to the notification may be filed within 20 days after

the notification is filed unless the Department indicates otherwise.

The Department may also consider such action on its own initiative.

(2) Issuance of modification or revocation. If the Department

modifies or revokes a protective order pursuant to paragraph (d) of

this section, the Department shall transmit the original and four

copies of the modification or Notice of Revocation to the United States

section of the Secretariat which, in turn, shall transmit the original

to the person to whom the protective order was issued and serve one

copy on each participant, other than the investigating authority, in

accordance with paragraphs (b)(4) (ii) and (iii) of this section.

Sec. 356.11 Procedures for obtaining access to privileged information.

(a) Persons who may apply for access to privileged information

under protective order and filing of applications--(1) Panelists. (i)

If a panel decides that in camera examination of a document containing

privileged information in an administrative record is necessary in

order for the panel to determine whether the document, or portions

thereof, should be disclosed under a Protective Order for Privileged

Information, each panelist who is to conduct the in camera review,

pursuant to the rules of procedure adopted by the United States and the

free trade area countries to implement Article 1904 of the Agreement,

shall submit an application for disclosure of the privileged

information under Protective Order for Privileged Information to the

United States section of the Secretariat for filing with the

Department; and

(ii) If a panel orders disclosure of a document containing

privileged information, any panelist who has not filed an application

pursuant to paragraph (a)(1)(i) of this section shall submit an

application for disclosure of the privileged information under a

Protective Order for Privileged Information to the United States

section of the Secretariat for filing with the Department.

(2) Designated officials of the United States Government. Where, in

the course of a panel review, the panel has reviewed privileged

information under a Protective Order for Privileged Information, and

the issue to which such information pertains is relevant to the

evaluation of whether the United States should request an extraordinary

challenge committee, each official of the United States Government

(other than an officer or employee of the investigating authority that

issued the final determination subject to review) whom the United

States Trade Representative informs the Department requires access for

the purpose of such evaluation shall file the completed original and

five copies of an application for a Protective Order for Privileged

Information with the United States section of the Secretariat which, in

turn, shall submit the original and one copy of the application to the

Department.

(3) Designated officials of the government of a FTA country. Where,

in the course of a panel review, the panel has reviewed privileged

information under a Protective Order for Privileged Information, and

the issue to which such information pertains is relevant to the

evaluation of whether the Government of an involved FTA country should

request an extraordinary challenge committee, each official of the

Government of the involved FTA country whom an authorized agency of the

involved FTA country informs the Department requires access for the

purpose of such evaluation shall file the completed original and five

copies of an application for a Protective Order for Privileged

Information with the United States section of the Secretariat which, in

turn, shall submit the original and one copy of the application to the

Department.

(4) Members of an extraordinary challenge committee. Where an

extraordinary challenge record contains privileged information and a

Protective Order for Privileged Information was issued to counsel or

professionals representing participants in the panel review at issue,

each member of the extraordinary challenge committee shall submit an

application for a Protective Order for Privileged Information to the

United States section of the Secretariat for filing with the

Department.

(5) Counsel or a professional under the direction or control of

counsel. If the panel decides, in accordance with the Article 1904

Rules, that disclosure of a document containing privileged information

is appropriate, a counsel or a professional under the direction or

control of counsel identified in such a decision as entitled to release

of information under a Protective Order for Privileged Information

shall submit an application for a Protective Order for Privileged

Information. Any such person shall:

(i) File the completed original and five copies of an application

with the United States section of the Secretariat which, in turn, shall

submit the original and one copy of the application to the Department;

and

(ii) As soon as the deadline fixed under the Article 1904 Panel

Rules for filing a Notice of Appearance in the panel review has passed,

shall serve a copy of the application on each participant, other than

the investigating authority, in accordance with paragraphs (b)(4) (ii)

and (iii) of this section.

(6) Other designated persons. If the panel decides, in accordance

with the Article 1904 Panel Rules, that disclosure of a document

containing privileged information is appropriate, any person identified

in such a decision as entitled to release of information under a

Protective Order for Privileged Information, e.g., a Secretary,

Secretariat staff, court reporters, interpreters and translators, or a

member of the staff of a panelist or extraordinary challenge committee

member, shall submit an application for release under Protective Order

for Privileged Information to the United States section of the

Secretariat for filing with the Department.

(b) Contents of applications for release under protective order for

privileged information. (1) The Department has adopted application

forms for disclosure of privileged information which are available from

the United States section of the Secretariat and the Central Records

Unit, room B-099, U.S. Department of Commerce, 14th and Constitution

Avenue NW., Washington, DC 20230. These forms may be amended from time

to time.

(2) Such forms require the applicant for release of privileged

information under Protective Order for Privileged Information to submit

a personal sworn statement stating, in addition to such other

conditions as the Department may require, that the applicant shall:

(i) Not disclose any privileged information obtained under

protective order to any person other than:

(A) An official of the Department involved in the particular panel

review in which the privileged information is part of the record;

(B) A person who has furnished a similar application and who has

been issued a Protective Order for Privileged Information concerning

the privileged information at issue; and

(C) A person retained or employed by counsel, a professional, a

panelist or extraordinary challenge committee member who has been

issued a Protective Order for Privileged Information, such as a

paralegal, law clerk, or secretary, if such person has agreed to be

bound by the terms set forth in the application for Protective Order

for Privileged Information of the counsel, professional, panelist or

extraordinary challenge committee member by signing and dating the

completed application at the location indicated in such application;

(ii) Use such information solely for purposes of the proceedings

under Article 1904 of the Agreement;

(iii) Upon completion of the panel review, or at such earlier date

as may be determined by the Department, return to the Department or

certify to the Department the destruction of all documents released

under the Protective Order for Privileged Information and all other

documents containing the privileged information (such as briefs, notes,

or charts based on any such information received under the Protective

Order for Privileged Information); and

(iv) Acknowledge that breach thereof may subject the signatory to

sanctions under Secs. 356.12 and 356.30.

(c) Issuance of protective orders for privileged information.--(1)

Panelists, designated government officials and members of an

extraordinary challenge committee. (i) Upon receipt of an application

for protective order under this section from a panelist, designated

government official or member of an extraordinary challenge committee,

the Department shall issue a Protective Order for Privileged

Information. The Department shall transmit the original and four copies

of the protective order to the United States section of the Secretariat

which, in turn, shall transmit the original to the applicant and serve

one copy of the order on each participant, other than the investigating

authority, in accordance with Secs. 356.10(b)(4) (ii) and (iii).

(ii) If the Department issues a Protective Order for Privileged

Information to a member of a binational panel or extraordinary

challenge proceeding initiated under the United States-Canada Free

Trade Agreement, that person must countersign the protective order and

return one copy of the countersigned protective order to the United

States section of the Secretariat.

(2) Counsel or a professional under the direction or control of

counsel. Upon receipt of an application for protective order under this

section from a counsel or a professional under the direction or control

of counsel, the Department shall issue a Protective Order for

Privileged Information. If the Department issues a protective order to

such person, that person shall immediately file four copies of the

protective order with the United States section of the Secretariat and

shall serve one copy of the order on each participant, other than the

investigating authority, in accordance with Secs. 356.10(b)(4) (ii) and

(iii).

(3) Other designated persons described paragraph (a)(6) of this

section. Upon receipt of an application for protective order under this

section from a designated person described in paragraph (a)(6) of this

section, the Department shall issue a Protective Order for Privileged

Information. The Department shall transmit the original and four copies

of the protective order to the United States section of the

Secretariat.

(d) Modification or revocation of protective order for privileged

information.--(1) Notification. If any person believes that changed

conditions of fact or law, or the public interest, may require that a

Protective Order for Privileged Information be modified or revoked, in

whole or in part, such person may notify the Department in writing. The

notification shall state the changes desired and the changed

circumstances warranting such action and shall include materials and

argument in support thereof. Such notification shall be served by the

person submitting it upon the person to whom the Protective Order for

Privileged Information was issued. Responses to the notification may be

filed within 20 days after the notification is filed unless the

Department indicates otherwise. The Department may also consider such

action on its own initiative.

(2) Issuance of modification or revocation. If the Department

modifies or revokes a Protective Order for Privileged Information

pursuant to paragraph (d) of this section, the Department shall

transmit the original and four copies of the modification or Notice of

Revocation to the United States section of the Secretariat which, in

turn, shall transmit the original to the person to whom the protective

order was issued and serve one copy on each participant, other than the

investigating authority, in accordance with Secs. 356.10(b)(4) (ii) and

(iii).

Subpart D--Violation of a Protective Order or a Disclosure

Undertaking

Sec. 356.12 Sanctions for violation of a protective order or

disclosure undertaking.

(a) A person, other than a person exempted from this part by the

provisions of section 777f(f)(4) of the Act (19 U.S.C. 1677f(f)(4)),

determined under this part to have violated a protective order or a

disclosure undertaking may be subjected to any or all or the following

sanctions:

(1) Liable to the United States for a civil penalty not to exceed

$100,000 for each violation;

(2) Barred from appearing before the Department to represent

another for a designated time period from the date of publication in an

official publication of a notice that a violation has been determined

to exist;

(3) Denied access to proprietary information for a designated time

period from the date of publication in an official publication of a

notice that a violation has been determined to exist;

(4) Other appropriate administrative sanctions, including striking

from the record of the panel review any information or argument

submitted by, or on behalf of, the violating party or the party

represented by the violating party; terminating any proceeding then in

progress; or revoking any order then in effect; and

(5) Required to return material previously provided by the

investigating authority, and all other materials containing the

proprietary information, such as briefs, notes, or charts based on any

such information received under a protective order or a disclosure

undertaking.

(b) (1) The firm of which a person determined to have violated a

protective order or a disclosure undertaking is a partner, associate,

or employee; any partner, associate, employer, or employee of such

person; and any person represented by such person may be barred from

appearing before the Department for a designated time period from the

date of publication in an official publication of notice that a

violation has been determined to exist or may be subjected to the

sanctions set forth in paragraph (a) of this section, as appropriate.

(2) Each person against whom sanctions are proposed under paragraph

(b)(1) of this section is entitled to all the administrative rights set

forth in this subpart separately and apart from rights provided to a

person subject to sanctions under paragraph (a) of this section,

including the right to a charging letter, right to representation, and

right to a hearing, but subject to joinder or consolidation by the

administrative law judge under Sec. 356.23(b).

Sec. 356.13 Suspension of rules.

Upon request by the Deputy Under Secretary, a charged or affected

party, or the APO Sanctions Board, the administrative law judge may

modify or waive any rule in this subpart upon determining that no party

will be unduly prejudiced and the ends of justice will thereby be

served and upon notice to all parties.

Sec. 356.14 Report of violation and investigation.

(a) An employee of the Department or any other person who has

information indicating that the terms of a protective order or a

disclosure undertaking have been violated will provide the information

to a Director or the Chief Counsel.

(b) Upon receiving information which indicates that a person may

have violated the terms of a protective order or an undertaking, the

Director will conduct an investigation concerning whether there was a

violation of a protective order or a disclosure undertaking, and who

was responsible for the violation, if any. For purposes of this

subpart, the Director will be supervised by the Deputy Under Secretary

with guidance from the Chief Counsel. The Director will conduct an

investigation only if the information is received within 30 days after

the alleged violation occurred or, as determined by the Director, could

have been discovered through the exercise of reasonable and ordinary

care.

(c) The Director will provide a report of the investigation to the

Deputy Under Secretary, after review by the Chief Counsel, no later

than 180 days after receiving information concerning a violation. Upon

the Director's request, and if extraordinary circumstances exist, the

Deputy Under Secretary may grant the Director up to an additional 180

days to conduct the investigation and submit the report.

(d) The following examples of actions that constitute violations of

an administrative protective order shall serve as guidelines to each

person subject to a protective order. These examples do not represent

an exhaustive list. Evidence that one of the acts described in the

guidelines has been committed, however, shall be considered by the

Director as reasonable cause to believe a person has violated a

protective order within the meaning of Sec. 356.15.

(1) Disclosure of proprietary information to any person not granted

access to that information by protective order, including an official

of the Department or member of the Secretariat staff not directly

involved with the panel review pursuant to which the proprietary

information was released, an employee of any other United States,

foreign government or international agency, or a member of the United

States Congress, the Canadian Parliament, or the Mexican Congress.

(2) Failure to follow the detailed procedures outlined in the

protective order for safeguarding proprietary information, including

maintaining a log showing when each proprietary document is used, and

by whom, and requiring all employees who obtain access to proprietary

information (under the terms of a protective order granted their

employer) to sign and date a copy of that protective order.

(3) Loss of proprietary information.

(4) Failure to return or destroy all copies of the original

documents and all notes, memoranda, and submissions containing

proprietary information at the close of the proceeding for which the

data were obtained by burning or shredding of the documents or by

erasing electronic memory, computer disk, or tape memory, as set forth

in the protective order.

(5) Failure to delete proprietary information from the public

version of a brief or other correspondence filed with the Secretariat.

(6) Disclosure of proprietary information during a public hearing.

(e) Each day of a continuing violation shall constitute a separate

violation.

Sec. 356.15 Initiation of proceedings.

(a) If the Deputy Under Secretary concludes, after an investigation

and report by the Director under Sec. 356.14(c) and consultation with

the Chief Counsel, that there is reasonable cause to believe that a

person has violated a protective order or a disclosure undertaking and

that sanctions are appropriate for the violation, the Deputy Under

Secretary will, at the Deputy Under Secretary's discretion, either

initiate a proceeding under this subpart by issuing a charging letter

as set forth in Sec. 356.16 or request that the authorized agency of

the involved FTA country initiate a proceeding by issuing a request to

charge as set forth in Sec. 356.17. In determining whether sanctions

are appropriate and, if so, what sanctions to impose, the Deputy Under

Secretary will consider the nature of the violation, the resulting

harm, and other relevant circumstances of the case. The Deputy Under

Secretary will decide whether to initiate a proceeding no later than 60

days after receiving a report of the investigation.

(b) If the Department receives a request to charge from an

authorized agency of a FTA country, the Deputy Under Secretary will

promptly initiate proceedings under this part by issuing a charging

letter as set forth in Sec. 356.16.

Sec. 356.16 Charging letter.

(a) Contents of letter. The Deputy Under Secretary will initiate

proceedings by issuing a charging letter to each charged party and

affected party which includes:

(1) A statement of the allegation that a protective order or a

disclosure undertaking has been violated and the basis thereof;

(2) A statement of the proposed sanctions;

(3) A statement that the charged or affected party is entitled to

review the documents or other physical evidence upon which the charge

is based and the method for requesting access to, or copies of, such

documents;

(4) A statement that the charged or affected party is entitled to a

hearing before an administrative law judge if requested within 30 days

of the date of service of the charging letter and the procedure for

requesting a hearing, including the name, address, and telephone number

of the person to contact if there are further questions;

(5) A statement that the charged or affected party has a right, if

a hearing is not requested, to submit documentary evidence to the

Deputy Under Secretary and an explanation of the method for submitting

evidence and the date by which it must be received; and

(6) A statement that the charged or affected party has a right to

retain counsel at the party's own expense for purposes of

representation.

(b) Settlement and amendment of the charging letter. The Deputy

Under Secretary may amend, supplement, or withdraw the charging letter

at any time with the approval of an administrative law judge if the

interests of justice would thereby be served. If a hearing has not been

requested, the Deputy Under Secretary will ask the Under Secretary to

appoint an administrative law judge to make this determination. If a

charging letter is withdrawn after a request for a hearing, the

administrative law judge will determine whether the withdrawal will bar

the Deputy Under Secretary from seeking sanctions at a later date for

the same alleged violation. If there has been no request for a hearing,

or if supporting information has not been submitted under Sec. 356.28,

the withdrawal will not bar future actions on the same alleged

violation. The Deputy Under Secretary and a charged or affected party

may settle a charge brought under this Subpart by mutual agreement at

any time after service of the charging letter; approval of the

administrative law judge or the APO Sanctions Board is not necessary.

(c) Service of charging letter on a resident of the United States.

(1) Service of a charging letter on a United States resident will be

made by:

(i) Mailing a copy by registered or certified mail addressed to the

charged or affected party at the party's last known address;

(ii) Leaving a copy with the charged or affected party or with an

officer, a managing or general agent, or any other agent authorized by

appointment or by law to receive service for the party; or

(iii) Leaving a copy with a person of suitable age and discretion

who resides at the party's last known dwelling.

(2) Service made in the manner described in paragraph (c)(1) (ii)

or (iii) of this section shall be evidenced by a certificate of service

signed by the person making such service, stating the method of service

and the identity of the person with whom the charging letter was left.

(d) Service of charging letter on a non-resident. If applicable

laws or intergovernmental agreements or understandings make the methods

of service set forth in paragraph (c) of this section inappropriate or

ineffective, service of the charging letter on a person who is not a

resident of the United States may be made by any method that is

permitted by the country in which the person resides and that, in the

opinion of the Deputy Under Secretary, satisfies due process

requirements under United States law with respect to notice in

administrative proceedings.

Sec. 356.17 Request to charge.

Upon deciding to initiate a proceeding pursuant to Sec. 356.15, the

Deputy Under Secretary will request the authorized agency of the

involved FTA country to initiate a proceeding for imposing sanctions

for violation of a protective order or a disclosure undertaking by

issuing a letter of request to charge that includes a statement of the

allegation that a protective order or a disclosure undertaking has been

violated and the basis thereof.

Sec. 356.18 Interim sanctions.

(a) If the Deputy Under Secretary concludes, after issuing a

charging letter under Sec. 356.16 and before a final decision is

rendered, that interim sanctions are necessary to protect the interests

of the Department, an authorized agency of the involved FTA country, or

others, including the protection of proprietary information, the Deputy

Under Secretary may petition an administrative law judge to impose such

sanctions.

(b) The administrative law judge may impose interim sanctions

against a person upon determining that:

(1) There is probable cause to believe that there was a violation

of a protective order or a disclosure undertaking and the Department is

likely to prevail in obtaining sanctions under this subpart;

(2) The Department, authorized agency of the involved FTA country,

or others are likely to suffer irreparable harm if the interim

sanctions are not imposed; and

(3) The interim sanctions are a reasonable means for protecting the

rights of the Department, authorized agency of the involved FTA

country, or others while preserving to the greatest extent possible the

rights of the person against whom the interim sanctions are proposed.

(c) Interim sanctions which may be imposed include any sanctions

that are necessary to protect the rights of the Department, authorized

agency of the involved FTA country, or others, including, but not

limited to:

(1) Denying a person further access to proprietary information;

(2) Barring a person from representing another person before the

Department;

(3) Barring a person from appearing before the Department; and

(4) Requiring the person to return material previously provided by

the Department or the investigating authority of the involved FTA

country, and all other materials containing the proprietary

information, such as briefs, notes, or charts based on any such

information received under a protective order or disclosure

undertaking.

(d) The Deputy Under Secretary will notify the person against whom

interim sanctions are sought of the request for interim sanctions and

provide to that person the material submitted to the administrative law

judge to support the request. The notice will include a reference to

the procedures of this section.

(e) A person against whom interim sanctions are proposed has a

right to oppose the request through submission of material to the

administrative law judge. The administrative law judge has discretion

to permit oral presentations and to allow further submissions.

(f) The administrative law judge will notify the parties of the

decision on interim sanctions and the basis therefor within five days

of the conclusion of oral presentations or the date of final written

submissions.

(g) If interim sanctions have been imposed, the investigation and

any proceedings under this Subpart will be conducted on an expedited

basis.

(h) An order imposing interim sanctions may be revoked at any time

by the administrative law judge and expires automatically upon the

issuance of a final order.

(i) The administrative law judge may reconsider imposition of

interim sanctions on the basis of new and material evidence or other

good cause shown. The Deputy Under Secretary or a person against whom

interim sanctions have been imposed may appeal a decision on interim

sanctions to the APO Sanctions Board, if such an appeal is certified by

the administrative law judge as necessary to prevent undue harm to the

Department or authorized agency of the involved FTA country, a person

against whom interim sanctions have been imposed or others, or is

otherwise in the interests of justice. Interim sanctions which have

been imposed remain in effect while an appeal is pending, unless the

administrative law judge determines otherwise.

(j) The Deputy Under Secretary may request an administrative law

judge to impose emergency interim sanctions to preserve the status quo.

Emergency interim sanctions may last no longer than 48 hours, excluding

weekends and holidays. The person against whom such emergency interim

sanctions are proposed need not be given prior notice or an opportunity

to oppose the request for sanctions. The administrative law judge may

impose emergency interim sanctions upon determining that the Department

or authorized agency of the involved FTA country is, or others are,

likely to suffer irreparable harm if such sanctions are not imposed and

that the interests of justice would thereby be served. The

administrative law judge will promptly notify a person against whom

emergency sanctions have been imposed of the sanctions and their

duration.

(k) If a hearing has not been requested, the Deputy Under Secretary

will request that the Under Secretary appoint an administrative law

judge for making determinations under this section.

(l) The Deputy Under Secretary will notify the Secretariat

concerning the imposition or revocation of interim sanctions or

emergency interim sanctions.

Sec. 356.19 Request for a hearing.

(a) Any party may request a hearing by submitting a written request

to the Under Secretary within 30 days after the date of service of the

charging letter. However, the Deputy Under Secretary may request a

hearing only if the interests of justice would thereby be served.

(b) Upon timely receipt of a request for a hearing, the Under

Secretary will appoint an administrative law judge to conduct the

hearing and render an initial decision.

Sec. 356.20 Discovery.

(a) Voluntary discovery. All parties are encouraged to engage in

voluntary discovery procedures regarding any matter, not privileged,

which is relevant to the subject matter of the pending sanctions

proceeding.

(b) Limitations on discovery. The administrative law judge shall

place such limits upon the kind or amount of discovery to be had or the

period of time during which discovery may be carried out as shall be

consistent with the time limitations set forth in this Part.

(c) Interrogatories and requests for admissions or production of

documents. A party may serve on any other party interrogatories,

requests for admissions, or requests for production of documents for

inspection and copying, and the party may then apply to the

administrative law judge for such enforcement or protective order as

that party deems warranted concerning such discovery. The party will

serve a discovery request at least 20 days before the scheduled date of

a hearing, if a hearing has been requested and scheduled, unless the

administrative law judge specifies a shorter time period. Copies of

interrogatories, requests for admissions, and requests for production

of documents and responses thereto will be served on all parties.

Matters of fact or law of which admission is requested will be deemed

admitted unless, within a period designated in the request (at least 10

days after the date of service of the request, or within such further

time as the administrative law judge may allow), the party to whom the

request is directed serves upon the requesting party a sworn statement

either admitting or denying specifically the matters of which admission

is requested or setting forth in detail the reasons why the party

cannot truthfully either admit or deny such matters.

(d) Depositions. Upon application of a party and for good cause

shown, the administrative law judge may order the taking of the

testimony of any person who is a party, or under the control or

authority of a party, by deposition and the production of specified

documents or materials by the person at the deposition. The application

shall state the purpose of the deposition and shall set forth the facts

sought to be established through the deposition.

(e) Supplementation of responses. A party who has responded to a

request for discovery with a response that was complete when made is

under no duty to supplement the party's response to include information

thereafter acquired, except as follows:

(1) A party is under a duty to seasonably supplement the party's

response with respect to any question directly addressed to:

(i) The identity and location of persons having knowledge of

discoverable matters; and

(ii) The identity of each person expected to be called as an expert

witness at a hearing, the subject matter on which the witness is

expected to testify, and the substance of the testimony.

(2) A party is under a duty to seasonably amend a prior response if

the party obtains information upon the basis of which the party:

(i) Knows the response was incorrect when made; or

(ii) Knows that the response, though correct when made, is no

longer true, and the circumstances are such that a failure to amend the

response is in substance a knowing concealment.

(3) A duty to supplement responses may be imposed by order of the

administrative law judge, agreement of the parties, or at any time

prior to a hearing through new requests for supplementation of prior

responses.

(f) Enforcement. The administrative law judge may order a party to

answer designated questions, to produce specified documents or items,

or to take any other action in response to a proper discovery request.

If a party does not comply with such an order, the administrative law

judge may make any determination or enter any order in the proceedings

as the administrative law judge deems reasonable and appropriate. The

administrative law judge may strike related charges or defenses in

whole or in part, or may take particular facts relating to the

discovery request to which the party failed or refused to respond as

being established for purpose of the proceeding in accordance with the

contentions of the party seeking discovery. In issuing a discovery

order, the administrative law judge will consider the necessity to

protect proprietary information and will not order the release of

information in circumstances where it is reasonable to conclude that

such release will lead to unauthorized dissemination of such

information.

Sec. 356.21 Subpoenas.

(a) Application for issuance of a subpoena. An application for

issuance of a subpoena requiring a person to appear and depose or

testify at the taking of a deposition or at a hearing shall be made to

the administrative law judge. An application for issuance of a subpoena

requiring a person to appear and depose or testify and to produce

specified documents, papers, books, or other physical exhibits at the

taking of a deposition, at a prehearing conference, at a hearing, or

under any other circumstances, shall be made in writing to the

administrative law judge and shall specify the material to be produced

as precisely as possible, showing the general relevancy of the material

and the reasonableness of the scope of the subpoena.

(b) Use of subpoena for discovery. Subpoenas may be used by any

party for purposes of discovery or for obtaining documents, papers,

books, or other physical exhibits for use in evidence, or for both

purposes. When used for discovery purposes, a subpoena may require a

person to produce and permit the inspection and copying of

nonprivileged documents, papers, books, or other physical exhibits

which constitute or contain evidence relevant to the subject matter

involved and which are in the possession, custody, or control of such

person.

(c) Application for subpoenas for nonparty department records or

personnel or for records or personnel of other Government agencies. (1)

An application for issuance of a subpoena requiring the production of

nonparty documents, papers, books, physical exhibits, or other material

in the records of the Department, or requiring the appearance of an

official or employee of the Department, or requiring the production of

records or personnel of other Government agencies shall specify as

precisely as possible the material to be produced, the nature of the

information to be disclosed, or the expected testimony of the official

or employee, and shall contain a statement showing the general

relevancy of the material, information, or testimony and the

reasonableness of the scope of the application, together with a showing

that such material, information, or testimony or their substantial

equivalent could not be obtained without undue hardship by alternative

means.

(2) Such applications shall be ruled upon by the administrative law

judge. To the extent that the motion is granted, the administrative law

judge shall provide such terms and conditions for the production of the

material, the disclosure of the information, or the appearance of the

official or employee as may appear necessary and appropriate for the

protection of the public interest.

(3) No application for a subpoena for production of documents

grounded upon the Freedom of Information Act (5 U.S.C. 552) shall be

entertained by the administrative law judge.

(d) Motion to limit or quash. Any motion to limit or quash a

subpoena shall be filed within 10 days after service thereof, or within

such other time as the administrative law judge may allow.

(e) Ex parte rulings on applications for subpoenas. Applications

for the issuance of subpoenas pursuant to this section may be made ex

parte, and, if so made, such applications and rulings thereon shall

remain ex parte unless otherwise ordered by the administrative law

judge.

(f) Role of the Under Secretary. If a hearing has not been

requested, the party seeking enforcement will ask the Under Secretary

to appoint an administrative law judge to rule on applications for

issuance of a subpoena under this section.

Sec. 356.22 Prehearing conference.

(a)(1) If an administrative hearing has been requested, the

administrative law judge will direct the parties to attend a prehearing

conference to consider:

(i) Simplification of issues;

(ii) Obtaining stipulations of fact and of documents to avoid

unnecessary proof;

(iii) Settlement of the matter;

(iv) Discovery; and

(v) Such other matters as may expedite the disposition of the

proceedings.

(2) Any relevant and significant stipulations or admissions will be

incorporated into the initial decision.

(b) If a prehearing conference is impractical, the administrative

law judge will direct the parties to correspond with each other or to

confer by telephone or otherwise to achieve the purposes of such a

conference.

Sec. 356.23 Hearing.

(a) Scheduling of hearing. The administrative law judge will

schedule the hearing at a reasonable time, date, and place, which will

be in Washington, DC, unless the administrative law judge determines

otherwise based upon good cause shown, that another location would

better serve the interests of justice. In setting the date, the

administrative law judge will give due regard to the need for the

parties adequately to prepare for the hearing and the importance of

expeditiously resolving the matter.

(b) Joinder or consolidation. The administrative law judge may

order joinder or consolidation if sanctions are proposed against more

than one party or if violations of more than one protective order or

disclosure undertaking are alleged if to do so would expedite

processing of the cases and not adversely affect the interests of the

parties.

(c) Hearing procedures. Hearings will be conducted in a fair and

impartial manner by the administrative law judge, who may limit

attendance at any hearing or portion thereof if necessary or advisable

in order to protect proprietary information from improper disclosure.

The rules of evidence prevailing in courts of law shall not apply, and

all evidentiary material the administrative law judge determines to be

relevant and material to the proceeding and not unduly repetitious may

be received into evidence and given appropriate weight. The

administrative law judge may make such orders and determinations

regarding the admissibility of evidence, conduct of examination and

cross-examination, and similar matters as are necessary or appropriate

to ensure orderliness in the proceedings. The administrative law judge

will ensure that a record of the hearing will be taken by reporter or

by electronic recording, and will order such part of the record to be

sealed as is necessary to protect proprietary information.

(d) Rights of parties. At a hearing each party shall have the right

to:

(1) Introduce and examine witnesses and submit physical evidence;

(2) Confront and cross-examine adverse witnesses;

(3) Present oral argument; and

(4) Receive a transcript or recording of the proceedings, upon

request, subject to the administrative law judge's orders regarding

sealing the record.

(e) Representation. Each charged or affected party has a right to

represent himself or herself or to retain private counsel for that

purpose. The Chief Counsel will represent the Department, unless the

General Counsel of the Department determines otherwise. The

administrative law judge may disallow a representative if such

representation constitutes a conflict of interest or is otherwise not

in the interests of justice and may debar a representative for

contumacious conduct relating to the proceedings.

(f) Ex parte communications. The parties and their representatives

may not make any ex parte communications to the administrative law

judge concerning the merits of the allegations or any matters at issue,

except as provided in Sec. 356.18(j) regarding emergency interim

sanctions.

Sec. 356.24 Proceeding without a hearing.

If no party has requested a hearing, the Deputy Under Secretary,

within 40 days after the date of service of a charging letter, will

submit for inclusion into the record and provide each charged or

affected party information supporting the allegations in the charging

letter. Each charged or affected party has the right to file a written

response to the information and supporting documentation within 30 days

after the date of service of the information provided by the Deputy

Under Secretary unless the Deputy Under Secretary alters the time

period for good cause. The Deputy Under Secretary may allow the parties

to submit further information and argument.

Sec. 356.25 Witnesses.

Witnesses summoned before the Department shall be paid the same

fees and mileage that are paid witnesses in the courts of the United

States.

Sec. 356.26 Initial decision.

(a) Initial decision. The administrative law judge, if a hearing

was requested, or the Deputy Under Secretary will submit an initial

decision to the APO Sanctions Board, providing copies to the parties.

The administrative law judge or the Deputy Under Secretary will

ordinarily issue the decision within 20 days of the conclusion of the

hearing, if one was held, or within 15 days of the date of service of

final written submissions. The initial decision will be based solely on

evidence received into the record and the pleadings of the parties.

(b) Findings and conclusions. The initial decision will state

findings and conclusions as to whether a person has violated a

protective order or a disclosure undertaking; the basis for those

findings and conclusions; and whether the sanctions proposed in the

charging letter, or lesser included sanctions, should be imposed

against the charged or affected party. The administrative law judge or

the Deputy Under Secretary may impose sanctions only upon determining

that the preponderance of the evidence supports a finding of violation

of a protective order or a disclosure undertaking and that the

sanctions are warranted against the charged or affected party.

(c) Finality of decision. If the APO Sanctions Board has not issued

a decision on the matter within 60 days after issuance of the initial

decision, the initial decision becomes the final decision of the

Department.

Sec. 356.27 Final decision.

(a) APO Sanctions Board. Upon request of a party, the initial

decision will be reviewed by the members of the APO Sanctions Board.

The Board consists of the Under Secretary for International Trade, who

shall serve as Chairperson, the Under Secretary for Economic Affairs,

and the General Counsel.

(b) Comments on initial decision. Within 30 days after issuance of

the initial decision, a party may submit written comments to the APO

Sanctions Board on the initial decision, which the Board will consider

when reviewing the initial decision. The parties have no right to an

oral presentation, although the Board may allow oral argument in its

discretion.

(c) Final decision by the APO Sanctions Board. Within 60 days but

not sooner than 30 days after issuance of an initial decision, the APO

Sanctions Board may issue a final decision which adopts the initial

decision in its entirety; differs in whole or in part from the initial

decision, including the imposition of lesser included sanctions; or

remands the matter to the administrative law judge or the Deputy Under

Secretary for further consideration. The only sanctions that the Board

can impose are those sanctions proposed in the charging letter or

lesser included sanctions.

(d) Content's of final decision. If the final decision of the APO

Sanctions Board does not remand the matter and differs from the initial

decision, it will state findings and conclusions which differ from the

initial decision, if any, the basis for those findings and conclusions,

and the sanctions which are to be imposed, to the extent they differ

from the sanctions in the initial decision.

(e) Public notice of sanctions. If the final decision is that there

has been a violation of a protective order or a disclosure undertaking

and that sanctions are to be imposed, notice of the decision will be

published in the Federal Register and forwarded to the United States

section of the Secretariat. Such publication will be no sooner than 30

days after issuance of a final decision or after a motion to reconsider

has been denied, if such a motion was filed. If the final decision is

made in a proceeding based upon a request to charge by an authorized

agency of an FTA country, the decision will be forwarded to the

Secretariat of the involved FTA country for transmittal to the

authorized agency of the FTA country for publication in the official

publication or other appropriate action. The Deputy Under Secretary

will also provide such information to the ethics panel or other

disciplinary body of the appropriate bar associations or other

professional associations whenever the Deputy Under Secretary subjects

a charged or affected party to a sanction under Sec. 356.12(a)(2) and

to any Federal agency likely to have an interest in the matter and will

cooperate in any disciplinary actions by any association or agency.

Sec. 356.28 Reconsideration.

Any party may file a motion for reconsideration with the APO

Sanctions Board. The party must state with particularity the grounds

for the motion, including any facts or points of law which the party

claims the APO Sanctions Board has overlooked or misapplied. The party

may file the motion within 30 days of the issuance of the final

decision or the adoption of the initial decision as the final decision,

except that if the motion is based on the discovery of new and material

evidence which was not known, and could not reasonably have been

discovered through due diligence prior to the close of the record, the

party shall file the motion within 15 days of the discovery of the new

and material evidence. The party shall provide a copy of the motion to

all other parties. Opposing parties may file a response within 30 days

of the date of service of the motion. The response shall be considered

as part of the record. The parties have no right to an oral

presentation on a motion for reconsideration, but the Board may permit

oral argument at its discretion. If the motion to reconsider is

granted, the Board will review the record and affirm, modify, or

reverse the original decision or remand the matter for further

consideration to an administrative law judge or the Deputy Under

Secretary, as warranted.

Sec. 356.29 Confidentiality.

(a) All proceedings involving allegations of a violation of a

protective order or a disclosure undertaking shall be kept confidential

until such time as the Department makes a final decision under these

regulations, which is no longer subject to reconsideration, imposing a

sanction.

(b) The charged party or counsel for the charged party will be, to

the extent possible, granted access to proprietary information in these

proceedings, as necessary, under administrative protective order,

consistent with the provisions of Sec. 356.10.

Sec. 356.30 Sanctions for violations of a protective order for

privileged information.

The provisions of this subpart shall apply to persons who are

alleged to have violated a Protective Order for Privileged Information.

Dated: December 28, 1993.

Jeffrey E. Garten,

Under Secretary for International Trade.

[FR Doc. 93-32063 Filed 12-30-93; 8:45 am]

BILLING CODE 3510-DS-P