[Federal Register Volume 59, Number 1 (Monday, January 3, 1994)]
[Rules and Regulations]
[Pages 228-240]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-32063]


[[Page Unknown]]

[Federal Register: January 3, 1994]


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Part VI





Department of Commerce





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International Trade Administration



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19 CFR Part 356




Panel Review Under Article 1904 of the North American Free Trade 
Agreement; Final Rule
DEPARTMENT OF COMMERCE

International Trade Administration

19 CFR Part 356

Docket No. 931247-3347

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

AGENCY: International Trade Administration, Department of Commerce.

ACTION: Interim-final rule and request for comments.

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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