Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996

The Federal Trade Commission today announced the policies and procedures it has implemented to minimize the burden on small businesses in complying with statutes and rules enforced by the agency. The policies are required by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, which calls on regulatory agencies to detail policies for providing compliance assistance to small businesses and for mitigating civil penalties for small businesses that may violate statutes and rules.

A Federal Register notice, published today, details the mechanisms the agency has implemented to help small businesses understand and comply with agency-enforced statutes. These forms of guidance include more than 50 publications specifically targeted to businesses that explain requirements of Commission statutes or rules as they apply to particular issues, such as the preparation of care labels in clothing or of premerger notification reports. In addition, the Commission has developed over 175 print and broadcast materials targeted to consumers that provide small businesses with insight into practices that generate consumer protection issues between businesses and their customers. All the printed materials are available free through a variety of sources and most are available on the FTC’s Internet website (http://www.ftc.gov). Other sources of information include formal Commission guidelines and policy statements, proposed consent agreements, final orders, and other formal documents that also are available free.

In addition, the FTC noted that it has mechanisms in place to allow small businesses to contact the agency by mail, phone, fax or e-mail for individual or specific advice or comment. Inquiries on consumer protection issues may be made to 202-326-3238, and on competition and antitrust issues to 202-326-3300. Finally, the agency has procedures for providing, where appropriate, Commission or staff advisory opinions intended to clarify the law.

"These wide-ranging programs are provided by the Commission to assist small entities in understanding their obligations under the laws and regulations administered by the Commission," the notice states.

SBREFA also directs agencies regulating small businesses to establish mechanisms to allow for a reduction or waiver of civil penalties for violations of statutes or laws in appropriate circumstances. Appropriate circumstances may exist, for example, where the violations did not involve willful or criminal conduct, did not pose health, safety or environmental threats, and did not involve previous law enforcement actions. The notice reviews the variety of factors on which the agency historically has based civil penalty amounts, and states that the agency will consider waiving or reducing civil penalties where:

• a small business reported the violation to the Commission promptly;
• the business corrected the violation in a timely manner, if feasible;
• the small business took appropriate efforts to determine and meet its legal obligation;
• the business is financially unable to pay the usual penalty or the penalty would impair the business’s ability to do business or compete effectively;
• the business has not been subject to prior enforcement action by federal, state or local law enforcement agencies for the same or similar conduct;
• the conduct was not willful or criminal;
• the violations did not pose a serious health, safety, environmental or economic threat to consumers or the public.

Each factor need not be present for the business to qualify for leniency. The Commission is seeking comments about whether and how to revise the two policies and whether there are other leniency criteria or economical means of guidance that the Commission should use.

The Commission vote to publish the notice in the Federal Register for a 30-day public comment period was 5-0. Comments should be addressed to Secretary, Federal Trade Commission, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

Copies of the Federal Register Notice are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov and also are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(FTC File No. P97 4224) (sbrefa)