---
kind: "section"
citation: "31 C.F.R. § 501.706"
title: "31"
number: "501.706"
heading: "Prepenalty Notice; issuance by Director."
url: "https://uscodex.org/cfr/31/501.706"
---

# §501.706. Prepenalty Notice; issuance by Director.

- (a) **When required.** If the Director has reason to believe there has occurred a violation of any provision of parts [500](/cfr/31/part500.md) or [515](/cfr/31/part515.md) of this chapter or a violation of the provisions of any license, ruling, regulation, order, direction or instruction issued by or pursuant to the direction or authorization of the Secretary pursuant to parts [500](/cfr/31/part500.md) or [515](/cfr/31/part515.md) of this chapter or otherwise under the Trading With the Enemy Act, and the Director determines that further civil proceedings are warranted, the Director shall issue a Prepenalty Notice. The Prepenalty Notice may be issued whether or not another agency has taken any action with respect to the matter.
- (b) **Contents of notice—**
  - (1) **Facts of violation.** The Prepenalty Notice shall describe the alleged violation, specify the laws and regulations allegedly violated, and state the amount of the proposed monetary penalty.
  - (2) **Right to respond.** The Prepenalty Notice shall inform the respondent of respondent's right to make a written presentation within the time prescribed in [§ 501.707](/cfr/31/501.707.md) as to why the respondent believes there should be no finding of a violation or why, if the respondent admits the violation, a monetary penalty should not be imposed or why, if imposed, the monetary penalty should be in a lesser amount than proposed. The Prepenalty Notice shall also inform the respondent that:
    - (i) The act of submitting a written response by the respondent is a factor that may result in a lower penalty absent any aggravating factors; and
    - (ii) If the respondent fails to respond to the Prepenalty Notice within the applicable 60-day period set forth in [§ 501.707](/cfr/31/501.707.md), the Director may proceed with the issuance of a Penalty Notice.
  - (3) **Right to request a hearing.** The Prepenalty Notice shall inform the respondent of respondent's right, if a subsequent Penalty Notice is issued, to request an administrative hearing. The Director will not consider any request for an administrative hearing until a Penalty Notice has been issued.

## Notes

### Source

Source: 68 FR 53642, Sept. 11, 2003, unless otherwise noted.

### Authority

Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, 2339B; 19 U.S.C. 3901-3913; 21 U.S.C. 1901-1908; 22 U.S.C. 287c, 2370(a), 6009, 6032, 7205, 8501-8551; 31 U.S.C. 321(b); 50 U.S.C. 1701-1706, 4301-4341; Pub. L. 101-410, 104 Stat. 890, as amended (28 U.S.C. 2461 note).

### Source

Source: 62 FR 45101, Aug. 25, 1997, unless otherwise noted.