Every year, the numerous agencies of the United States Government send out letters to companies putting them on notice that the company is suspected of committing some serious violation. Usually, the letter or notice demands a written response within 30 days or the company will be subject to a penalty or fine. Knowing how to handle such letters, notices, or subpoenas is critical in terminating the investigation successfully, not paying a huge penalty, and even avoiding criminal prosecution.
The Executive Branch departments, bureaus, and agencies of the Federal Government all have the legal authority to investigate and assess penalties against companies that violate that particular Government agency’s regulations. This is especially true of companies which are importers, exporters, or otherwise involved in international trade such as customs brokers, international freight forwarders, airlines, and indirect air carriers. The U.S. Food and Drug Administration (FDA) would issue an "Administrative Subpoena" or a"Notice of FDA Action", the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) would issue an "Administrative Subpoena" while the U.S. Department of Transportation’s Federal Aviation Administration (FAA) would call it a "Notice of Proposed Civil Penalty", the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) describes it as a "Notice of Action" and "Pre-Penalty Notice", the Environmental Protection Agency (EPA) calls it a "Request for Information", the U.S. Commerce Department’s Bureau of Industry and Security (BIS) calls it a "Proposed Charging Letter", and the Transportation Security Administration (TSA) would call it a "Letter of investigation".
Whatever pseudonym or term is used, the Government documents are all similar in that they:
(1) are a legal demand from the Government,
(2) require a written response by the addressee,
(3) describe briefly the factual basis for the demand,
(4) threaten action against the company for not providing a timely response, and
(5) threaten action against an individual if false information is provided to the Government.
The first response by the President of the company (or its General Counsel) who receives the letter is – you guessed it – identify and call a lawyer very knowledgeable and experienced in handling these investigations. All communications between the company and its outside lawyer are considered to be under the attorney-client privilege. That means that anything the President or other employees of the company say to the attorney are entirely confidential. The inquiry by the outside legal expert is also confidential, so anything the attorney discovers or discusses with the company’s employees do not have to be subsequently disclosed to the Government.
In my over 20 years of practice as a customs and international trade lawyer routinely involved in defending companies under investigation by the U.S. Government, the biggest error by company officers is that they respond directly to the U.S. Government without seeking proper legal advice. Only after the company receives a large penalty do I finally get the call to straighten it all out. Fortunately, whether the letter of investigation is from Washington, D.C. to a company located in California, Florida, New York, or elsewhere in the United States, the administrative procedures are identical.