How an export enforcement case is heard

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1. A discretionary function, outside ordinary review

Part 128 of the International Traffic in Arms Regulations sets out how the Department of State brings and decides cases for debarment and civil penalties. It begins with a statement of the Department’s position. The Secretary of State decides whether licenses and approvals are granted, whether exemptions may be used, and may revoke, suspend or amend licenses when that is deemed advisable (22 CFR 128.1).

Administering the Act is described as a foreign affairs function within the military and foreign affairs exclusion of the Administrative Procedure Act. "Because the exercising of the foreign affairs function, including the decisions required to implement the AECA, is highly discretionary, it is excluded from review under the Administrative Procedure Act" (22 CFR 128.1). The procedures that follow are the Department’s own.

2. The charging letter

A case starts with a charging letter. Either the Deputy Assistant Secretary for Defense Trade Controls or the Director of the Office of Defense Trade Controls Compliance may initiate proceedings. Debarment and civil penalty cases both need the concurrence of the Office of the Legal Adviser (22 CFR 128.3(a)). The letter states the essential facts of the alleged violation and the provision involved.

It also tells the respondent the rules of the contest. The respondent must answer within 30 days, and failure to answer will be taken as an admission of the charges. It is entitled to an oral hearing if it demands one with the answer or within seven days after, and it may be represented by counsel of its choosing (22 CFR 128.3(a)). Letters may be served by mail, by hand or at a residence, and for respondents abroad through the government of their country where an arrangement allows (22 CFR 128.3(b)).

3. Answering, or failing to

"The respondent is required to answer the charging letter within 30 days after service" (22 CFR 128.5(a)). The answer must admit or deny each allegation specifically, and a lack of knowledge operates as a denial. "Failure to deny or controvert any particular allegation will be deemed an admission thereof" (22 CFR 128.5(b)). Any defense not set out in the answer is waived.

Where no oral hearing is demanded, the respondent sends all its documentary evidence within seven days after the answer, with English translations of anything in another language (22 CFR 128.5(b)).

A respondent that does not answer may be held in default, and the resulting order has the same effect as one issued after contested charges. A default can be set aside on good cause, but the petition does not suspend the order in the meantime (22 CFR 128.4).

4. The hearing and the judge’s report

Cases are heard by an Administrative Law Judge appointed by the Department of State (22 CFR 128.2). If an answer is filed without a hearing demand, the judge may decide on the written record. If a hearing is demanded, it is set unless no material issue of fact is raised, and it can proceed even if the respondent fails to appear (22 CFR 128.8(a)). The judge may administer oaths, the respondent may be represented, and the proceeding is transcribed (22 CFR 128.8(b)).

The judge writes a report with findings of fact and law, a finding on whether a violation occurred, and recommendations, and sends it to the Assistant Secretary of State for Political-Military Affairs (22 CFR 128.9(b)).

5. Who decides the outcome

Insufficient evidence leads to dismissal. Where the judge finds a violation, the recommendation is advisory only. The Assistant Secretary reviews the record and the report and makes the disposition, which may be a debarment order, a civil penalty or the action the judge recommends (22 CFR 128.10). A debarment order runs for the period it specifies and may carry additional terms.

Many cases settle. The Directorate and the respondent may propose a consent order to the judge, and if either the judge or the Assistant Secretary rejects it, the case proceeds as if no proposal had been made (22 CFR 128.11(a)). Cases can also settle before a charging letter is served, through a proposed charging letter and a consent agreement signed by the Assistant Secretary. "Cases which are settled may not be reopened or appealed" (22 CFR 128.11(b)).

6. Appeals and probation

Final orders can be appealed. An appeal from an order denying export privileges or imposing civil penalties goes in writing to the Under Secretary of State for Arms Control and International Security, within 30 days of receipt (22 CFR 128.13(a)). It may rest on three grounds only: findings not supported by substantial evidence, a prejudicial error of law, or provisions that are arbitrary, capricious or an abuse of discretion (22 CFR 128.13(b)). Consent order penalties cannot be appealed on these grounds.

The appeal is decided on the record, and the Under Secretary may order a rehearing where the record is insufficient or new evidence emerges. "The taking of an appeal will not stay the operation of any order" (22 CFR 128.13(d)). The Under Secretary’s decision is final.

A debarment order may include a probationary period during which the debarment is held in abeyance on conditions. If the conditions appear breached, the Deputy Assistant Secretary may apply, without notice, for revocation, and the affected party may object and ask for a hearing (22 CFR 128.15).

7. What is private and what is public

Proceedings are confidential, although records are available to any government agency showing a proper interest (22 CFR 128.14). The outcomes are not. "All charging letters, debarment orders, and orders imposing civil penalties and probationary periods are available for public inspection in the Public Reading Room of the Department of State" (22 CFR 128.17). The penalties at stake are described in penalties, debarment and the presumption of denial.

Key terms

Charging letter	The document that starts a debarment or civil penalty case and sets the 30 day deadline to answer.
Administrative Law Judge	The Department of State judge who hears the case and reports with advisory recommendations.
Consent order	A negotiated settlement, approved by the Assistant Secretary, that cannot be reopened or appealed.
Probationary period	A term of a debarment order holding it in abeyance on conditions, revocable if breached.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

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