(a) Scope. Except in pending civil penalty assessment proceedings provided for in § 502.603, the Commission, when it has reason to believe a violation has occurred, may invoke the informal compromise procedures of this section.

(b) Notice. When the Commission considers it appropriate to afford an opportunity for the compromise of a civil penalty, it will, except when circumstances render it unnecessary, send a Notice of Violations (NOV) to the respondent by electronic and registered or certified mail, or by other means reasonably calculated to give notice. The NOV will describe specific violation(s) on which the claim is based, including the particular facts, dates, and other elements necessary for the respondent to identify the specific conduct constituting the alleged violation; the amount of the penalty demanded; and the names of Commission personnel with whom the demand may be discussed, if the person desires to compromise the penalty. The NOV also will state the deadlines for the institution and completion of compromise negotiations. If a compromise agreement is not reached between the parties and BEIC intends to recommend that the Commission institute a formal proceeding pursuant to § 502.63(a), then BEIC shall provide notice of its intent to the respondent and provide the respondent with the opportunity to make a written submission within 15 days for consideration by the Commission.

(c) Request for compromise. Any person receiving an NOV provided for in paragraph (b) of this section may, within the time specified, request opportunity for informal resolution, deny the violation, or submit materials explaining, mitigating, or showing extenuating circumstances, as well as make voluntary disclosures of information and documents.

(d) Criteria for compromise. In addition to the factors set forth in § 502.603(b), in compromising a penalty claim, the Commission may consider litigative concerns, the cost of collecting the claim, and enforcement policy.

(e) Disposition of claims in compromise procedures. (1) When a penalty is compromised and the respondent agrees to settle, a compromise agreement shall be executed by the respondent. This agreement, after reciting the nature of the claim, will include a statement evidencing the respondent's agreement to the compromise of the Commission's penalty claim for the amount set forth in the agreement and will also embody an approval and acceptance provision which is to be signed by the appropriate Commission official subsequent to Commission review under § 501.11, if any. Upon compromise of the penalty in the agreed amount, a duplicate original of the fully executed agreement shall be furnished to the respondent.

(2) Upon completion of the compromise, the Commission may issue a public notice thereof, the terms and language of which are not subject to negotiation.

(f) Relation to assessment proceedings. Except by order of the Commission, no compromise procedure shall be initiated or continued after institution of a Commission assessment proceeding directed to the same violations. Any offer of compromise submitted by the respondent pursuant to this section shall be deemed to have been furnished by the respondent without prejudice and shall not be used against the respondent in any proceeding.

(g) Delegation of compromise authority. The compromise authority set forth in this subpart is delegated to the Director, Bureau of Enforcement, Investigations, and Compliance. The Director, Bureau of Enforcement, Investigations, and Compliance, has the authority to negotiate the terms of compromise agreements, provided that any compromise agreement shall not become effective until the Commission has had the opportunity to review pursuant to § 501.11(f)(2). [Rule 604.]

[88 FR 23363, Apr. 17, 2023]