(a) The Commission may issue an Order of Investigation and Hearing commencing an adjudicatory investigation against one or more respondents alleging one or more violations of the statutes that it administers. Prior to recommending the issuance of an Order of Investigation and Hearing, BEIC will provide a respondent with notice of BEIC's intent and provide the respondent with the opportunity to make a written submission within 15 days for consideration by the Commission.

(b) Contents of Order of Investigation and Hearing. The Order of Investigation and Hearing must contain the following:

(1) The name, street address, and, if known, email address of each person against whom violations are alleged;

(2) A recitation of the legal authority and jurisdiction for institution of the proceeding, with specific designation of the statutory provisions alleged to have been violated;

(3) A clear and concise factual statement sufficient to inform each respondent with reasonable definiteness of the acts and practices alleged to be in violation of the law;

(4) Notice of penalties, cease and desist order, or other affirmative action sought; and

(5) Notice of the requirement to file an answer and a statement of the consequences of failure to file an answer.

(c) Answer to Order of Investigation and Hearing. (1) Time for filing. A respondent must file with the Commission an answer to the Order of Investigation and Hearing and serve a copy of the answer on the Bureau of Enforcement within 25 days after being served with the Order of Investigation and Hearing unless this period has been extended under § 502.67 or § 502.102, or reduced under § 502.103, or unless motion is filed to withdraw or dismiss the Order of Investigation and Hearing, in which latter case, answer must be filed within 10 days after service of an order denying such motion. For good cause shown, the presiding officer may extend the time for filing an answer.

(2) Contents of answer. The answer must be verified and must contain the following:

(i) The name, address, and email address of each respondent, and the name, address, and email address of each respondent's attorney or representative;

(ii) Admission or denial of each alleged violation of the Shipping Act;

(iii) A clear and concise statement of each ground of defense and specific admission, denial, or explanation of facts alleged in the complaint, or, if respondent is without knowledge or information thereof, a statement to that effect; and

(iv) Any affirmative defenses, including allegations of any additional facts on which the affirmative defenses are based.

(3) Oral hearing. The answer must indicate whether an oral hearing is requested and the desired place for such hearing. The presiding officer will determine whether an oral hearing is necessary.

(4) Effect of failure to file answer. (i) Failure of a respondent to file an answer to an Order of Investigation and Hearing within the time provided will be deemed to constitute a waiver of the respondent's right to appear and contest the allegations in the Order of Investigation and Hearing and to authorize the presiding officer to enter a decision on default as provided for in 46 CFR 502.65. Well pleaded factual allegations in the Order of Investigation and Hearing not answered or addressed will be deemed to be admitted.

(ii) The Bureau of Enforcement may make a motion for decision on default.

(d) Informal enforcement process. (1) BEIC may issue a Notice of Violations (NOV) to provide the person or persons with notice of the alleged violations and provide the opportunity for informal resolution of such claims pursuant to the procedures in § 502.604. [Rule 63.]

(i) The Bureau of Enforcement has made a preliminary determination to recommend that the Commission initiate enforcement action against them;

(ii) Identifies the specific violations that the Bureau of Enforcement has preliminarily determined to include in the recommendation; and

(iii) Provides notice that the person may make a written submission to the Bureau of Enforcement concerning the proposed recommendation, including the deadline for the submission and any other relevant information (e.g., how and where to send such statements).

(2) Persons notified of such investigations may submit a written statement to the Bureau of Enforcement setting forth their interests and positions regarding the subject matter of the investigation.

(3) The Bureau of Enforcement will consider any written statements submitted under paragraph (d)(2) of this section when making recommendations to the Commission and will attach such written statements to the Bureau's recommendations. [Rule 63.]

[77 FR 61524, Oct. 10, 2012, as amended at 84 FR 54040, Oct. 9, 2019; 88 FR 23363, Apr. 17, 2023]