CPC-3-24-01 — Administrative Monetary Penalties (AMPs) Under the Radiocommunication Act — Guidance to Stakeholders

This document guides Canadians on Innovation, Science and Economic Development’s (ISED) administrative monetary penalties process under the Radiocommunication Act.

Client Procedures Circular CPC 3-24-01, Administrative Monetary Penalties (AMPs) Under the Radiocommunication Act, Guidance to Stakeholders, issue 2, replaces CPC-3-24-01, issue 1, dated April 2015.

The following are the main changes to the Client Procedures Circular (CPC):

• Language related to ISED’s policies and procedures related to AMPs has been updated and simplified
• This document no longer has annexes A and B; relevant information on assessing AMPs and answers to frequently asked questions can be understood by reading the CPC
• ISED made editorial changes and clarifications as appropriate

Comments and suggestions may be directed to the following address:

Attention: Spectrum Management Operations—Policy
Innovation, Science and Economic Development Canada
Spectrum Management Operations Branch
235 Queen Street
Ottawa, Ontario  K1A 0H5

E-mail: spectrumoperations-operationsduspectre@ised-isde.gc.ca

All comments and suggestions received will be considered.

Issued under the authority of
the Minister of Innovation, Science and Industry

The intent of this document is to inform Canadians of how administrative monetary penalties (AMPs) are determined by Innovation, Science and Economic Development Canada (ISED) as a response to a range of violations under the Radiocommunication Act (RA). AMPs are financial deterrents that encourage compliance with these legal requirements. In addition, this document describes the next steps after determining an AMP.

Canadians rely on their electronic devices to connect instantly with people and information. These devices depend on the radio frequency spectrum that wireless signals travel over. This spectrum infrastructure also includes radio networks for businesses, first responders, aeronautical and marine operations, as well as critical infrastructure.

ISED safeguards spectrum availability and reliability by issuing licences and certificates with specific technical and non-technical requirements under the RA. ISED also develops standards and technical requirements for radiocommunication equipment. These legal requirements help ensure that wireless devices in Canada operate in a safe and interference-free spectrum environment and aim to maximize the social and economic benefits Canadians derive from using the radio frequency spectrum resource.

Most radio authorization holders, radio equipment manufacturers and retailers comply with the relevant conditions and standards established by ISED. However, when these requirements are not being met, AMPs are one of several enforcement tools ISED possesses to bring entities or their regulated activities back into compliance and deter future non-compliance.

Fortunately, most instances of non-compliance are resolved by communicating and working with the violator to identify solutions and ensure compliance.

In cases where enforcement action is necessary, AMPs allow for a measured, proportionate response to a wide range of violations under the RA.

The Minister of Innovation, Science and Industry (the Minister), through the Department of Industry Act, the RA, and the Radiocommunication Regulations, with due regards to the objectives of the Telecommunications Act, is responsible for spectrum management in Canada. As such, the Minister oversees the development of national policies and goals for spectrum resource use and ensures effective management of the radio frequency spectrum. The Minister also sets standards for radio equipment and may establish conditions and procedures for competitive bidding processes.

The RA sets out the powers of the Minister, inspectors appointed by the Minister, and persons designated by the Minister for the purpose of enforcement.

Section 15.1 of the RA states that every contravention of subsection 4(1), (3), or (4), or 5(1.5) constitutes a violation and provides authority to impose AMPs. Penalties may be up to a maximum of $25,000 for a first violation and $50,000 for a subsequent violation in the case of an individual, and a maximum of up to $10 million for a first violation and $15 million for a subsequent violation in any other case.

The imposition of AMPs is one of several different actions ISED may be take to enforce legal requirements under the RA.

Departmental Official

A person delegated by the Minister to review representations and the evidence used to issue a notice of violation in the case of a dispute.

Designated Person

A person designated by the Minister to issue an NOV or accept an undertaking under subsection 15.12(a) of the RA.

Inspection report

A document that contains information gathered by an RA inspector in relation to the violation(s) set out in the NOV.

Notice of Violation (NOV)

A document issued by a Designated Person and served to a person who the Designated Person believes, on reasonable grounds, to have committed a violation.

Representations

An alleged violator’s written statement submitted to the Minister or their delegate regarding the NOV.

Undertaking

A negotiated agreement between the violator and a Designated Person. The undertaking's contents must be in accordance with subsection 15.13(2) of the RA.

Violation

A contravention of subsections 4(1), 4(3), 4(4) or 5(1.5) of the RA that may result in the issuance of an AMP.

AMPs are imposed by ISED on an individual, corporation or other entity that is non-compliant with the following subsections of the RA:

• 4(1) install, operate or possess radio apparatus without or not in accordance with a radio authorization, other than as exempted under the RA
• 4(3) manufacture, import, distribute, lease, offer for sale or sell any radio apparatus, interference-causing equipment or radio-sensitive equipment that does not comply with technical standards that have been established under paragraph 6(1)(a) of the RA
• 4(4) install, use, possess, manufacture, import, distribute, lease, offer for sale, or sell a jammer
• 5(1.5) fail to comply with any procedure, standard, or condition applicable in respect of a system of competitive bidding used by the Minister under section 5(1.2)

When assessing AMPs for violations, ISED will take into account the legislative factors set out in subsection 15.11(1) of the RA. The factors are:

• the nature and scope of the violation
• the RA compliance history of the person alleged to have committed the violation
• any benefit that the person obtained from the commission of the violation
• the person’s ability to pay the penalty
• any factors established by the regulations
• any other relevant factor

Penalties are assessed on a case-by-case basis to ensure the financial penalties have the desired impact on compliance. AMP amounts are not meant to be punitive.

Each separate violation can lead to the assessment of a new AMP. If a similar instance of non-compliance by the same violator is found in the future, the original violation will be considered an aggravating factor in determining subsequent enforcement measures.

Each step in the AMP process is described below.

Step 1: Notice of Violation issuance

Where ISED determines that a violation has occurred and that it is appropriate to impose an AMP, it will issue a document called a Notice of Violation (NOV) to the individual, corporation, or other entity. The NOV may be delivered by registered mail, or may be hand-delivered.

Each NOV provides the following information:

• the name of the violator alleged to have committed the violation
• a description of the violation
• the acts or omissions that constitute the violation
• the penalty amount and payment deadline
• instructions on the response options available
• an explanation of the consequences of not responding to the NOV
• contact information for the Designated Person who issued the NOV
• a copy of the Inspection Report
• details on what information may be published on ISED’s website

Step 2: Responding to the AMP

After an NOV is delivered, the alleged violator named has 30 days (or longer if specified in the NOV) to action one of three options. They can either:

1. pay the AMP amount
2. enter into an undertaking
3. dispute the penalty (for example, make representations)

If the alleged violator named in the NOV does not respond within the period as specified in the NOV, they will be deemed to have committed the violation and the AMP is payable immediately.

Option 1: Pay the AMP amount

AMPs are payable to the Receiver General for Canada. The NOV provides specific instructions concerning how and where to pay the penalty. By paying this penalty, the violator named in the NOV acknowledges that they have committed the violation. Other than coming into and maintaining compliance, no further action is required after payment is made.

Option 2: Enter into an undertaking

The violator named in the NOV may ask to enter into an undertaking which will contain specific terms and conditions leading to compliance. For example, the violator may need additional time to purchase and install new equipment to bring them into compliance. If so, they would need to explain the issue to ISED and agree to a condition in the undertaking that the equipment be installed by a specific date. Entering into such an undertaking would allow the violator to invest their resources into achieving compliance instead of paying some or all the penalty.

In all cases, the undertaking must be accepted by ISED, which will consider the facts surrounding the violation and the measures outlined in the proposed undertaking to remedy the compliance issues.

To enter into an undertaking, the violator named in the NOV must submit a written request proposing an undertaking to the Designated Person who issued the NOV by the deadline specified in the NOV. The decision to accept the undertaking request is at the discretion of the Designated Person.

If the request is accepted, the Designated Person will work with the requestor to establish the terms and conditions of the undertaking to ensure compliance.

The undertaking will identify actions the person or entity named in the NOV will take to comply with the RA and the deadline for those actions. The undertaking may include a requirement to pay a specified amount. Failure to respect an undertaking constitutes a separate violation, for which an AMP may be imposed.

An undertaking does not erase the violation from the violator’s compliance history.

Option 3: Dispute the penalty

Alleged violators can dispute the imposition of the AMP by making written representations to the Departmental Official named in the NOV by the deadline specified in the NOV. The representations must state the reason for the dispute. These reasons may include the following:

• the amount of the penalty was assessed incorrectly
• the alleged violator named in the NOV exercised due diligence to prevent the violation
• the violation did not occur, and in such a case, there is no penalty
• the violation did occur, but the alleged violator named in the NOV did not commit the violation

The representation must include:

• a copy of the NOV
• a description of the aspect(s) of the NOV being disputed
• detailed information and evidence supporting the NOV's disputed aspect(s)
• a statement of the relief being sought, for example, a reduction of the penalty amount or cancellation of the entire amount
• contact information of the person making the representations

A Departmental Official delegated by the Minister will consider the reasons provided and, based on all the evidence presented, will issue a decision to either uphold, reduce, or cancel the penalty. The requester will be sent ISED’s decision along with the reasons for the decision.

If a penalty is still outstanding, the dollar amount set out in the decision is payable within 30 calendar days of the date the decision is served.

If the requestor is unsatisfied with ISED’s decision, an appeal may be brought to the Federal Court within 30 calendar days after the day on which the decision is made.

In cases where the violator does not pay the penalty within the prescribed period, collection activities will be undertaken.

An unpaid AMP amount or an amount payable under an undertaking is a debt due to the Crown and may be recovered by collection procedures stipulated in the Financial Administration Act or through the Federal Court. ISED may also recover any reasonable expenses incurred to recover an unpaid AMP amount or an amount payable under an undertaking.

Under section 15.24 of the RA, ISED may publish details about AMPs and undertakings.

For AMPs, ISED may publish the name of the person who committed a violation, the nature of the violation (for example, acts, omissions, or the provisions at issue), as well as the penalty amount.

For undertakings, ISED may publish the name of a person who enters an undertaking and the nature of the undertaking, including the acts or omissions or the provisions at issue, the conditions included and, if applicable, the penalty amount.

Judicial decisions arising from appeals of AMPs issued by ISED may also be published.