00-32960. Privacy Act of 1974; Implementation

AGENCY:

Postal Service.

ACTION:

Proposed rule.

SUMMARY:

The U.S. Postal Service proposes to amend its regulations implementing the Privacy Act of 1974, 5 U.S.C. 552a. This proposed rule would amend its regulation to exempt a new system of records, USPS 050.080, Finance Records-Suspicious Transaction Reports, from certain provisions of the Privacy Act. The exemptions are intended to comply with legal prohibitions against the disclosure of certain kinds of information, and to protect certain information about individuals maintained in the system of records.

DATES:

Comments must be received on or before January 26, 2001.

ADDRESSES:

Written comments should be addressed to the Manager, Finance Administration/FOIA, U.S. Postal Service, 475 L'Enfant Plaza SW, room 8141, Washington, DC 20260-5202. Copies of all written comments will be available Monday through Friday for public inspection and photocopying between 9 a.m. and 4 p.m. at the above address.

FOR FURTHER INFORMATION CONTACT:

Henry Gibson, [phone].

SUPPLEMENTARY INFORMATION:

Pursuant to the Bank Secrecy Act, 31 U.S.C. 5318(g), anti-money laundering provisions, and implementing regulations of the U.S. Treasury, 31 CFR Part 103, the Postal Service is required to report to the Department of the Treasury certain suspicious financial transactions that are relevant to a possible violation of law or regulation. Further, the Postal Service is prohibited from notifying any participant in the transaction that a report has been made. 31 U.S.C. 5318(g)(2).

The Postal Service is publishing separately a notice of a new system of records, USPS 050.080, Finance Records-Suspicious Transaction Reports, which was made necessary by the reporting requirements of the Bank Secrecy Act. The system of records contains information about certain postal customers who purchase or receive money orders, wire transfers, or stored value cards.

In order to permit compliance with the non-notification requirement of the Bank Secrecy Act, the Postal Service is adopting an exemption from the Privacy Act provisions related to individual access. Under 5 U.S.C. 552a(k)(2), the head of an agency may promulgate rules to exempt a system of records from certain provisions of 5 U.S.C. 552a if the system of records is “investigatory material compiled for law enforcement purposes, other than material within the scope of subsection (j)(2) of this section.”

The Postal Service is hereby giving notice of a proposed rule to exempt the Suspicious Transaction Report system from certain provisions of the Privacy Act pursuant to 5 U.S.C. 552a(k)(2). The reasons for exempting the system of records from sections (c)(3), (d), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f) of the Privacy Act are set forth in the proposed rule.

List of Subjects in 39 CFR Part 266

• Privacy

For the reasons set out in the preamble, the Postal Service proposes to amend part 266 of 39 CFR as follows:

PART 266—PRIVACY OF INFORMATION

1. The authority citation for part 266 continues to read as follows:

Authority: 39 U.S.C. 401; 5 U.S.C. 552a.

2. Section 266.9 is amended by adding paragraph (b)(7) to read as follows:

§ 266.9

Exemptions.

* * * * *

(b) * * *

(7) Finance Records-Suspicious Transaction Reports, USPS 050.080. This system is exempt from 5 U.S.C. 552a (c)(3), (d)(1)-(4), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f) to the extent that information in the system is subject to exemption pursuant to 5 U.S.C. 552a(k)(2) as material compiled for law enforcement purposes. The reasons for exemption follow.

(i) Disclosure to the record subject pursuant to subsections (c)(3) or (d)(1)-(4) would violate the non-notification provision of the Bank Secrecy Act, 31 U.S.C. 5318(g)(2), under which the Postal Service is prohibited from notifying a transaction participant that a suspicious transaction report has been made. In addition, the access provisions of subsections (c)(3) and (d) would alert individuals that they have been identified as suspects or possible subjects of investigation and thus seriously hinder the law enforcement purposes underlying the suspicious transaction reports.

(ii) This system is in compliance with subsection (e)(1), because maintenance of the records is required by law. Strict application of the relevance and necessity requirements of subsection (e)(1) to suspicious transactions would be impractical, however, because the relevance or necessity of specific information can often be established only after considerable analysis and as an investigation progresses.

(iii) The requirements of subsections (e)(4)(G), (H), and (I) and subsection (f) do not apply because this system is exempt from the individual access and amendment provisions of subsection (d). Nevertheless, the Postal Service has published notice of the record source categories and the notification, access, and contest procedures.

An appropriate revision of 39 CFR 266.9 to reflect the proposed change will be published if the proposal is adopted.

Stanley F. Mires,

Chief Counsel, Legislative.