02-33005. Revision of Regulations To Exempt Privacy Act System of Records

AGENCY:

Postal Service.

ACTION:

Final rule.

SUMMARY:

The U.S. Postal Service is amending its regulations implementing the Privacy Act of 1974, 5 U.S.C. 552a. The amendment modifies existing regulations at 39 CFR 266.9 to exempt system of records, USPS 050.080, Finance Records—Suspicious Transaction Reports, from certain provisions of the Privacy Act and corresponding regulations.

DATES:

This rule is effective December 31, 2002.

FOR FURTHER INFORMATION CONTACT:

Henry Gibson, [phone].

SUPPLEMENTARY INFORMATION:

The Postal Service published a proposed rule on December 27, 2000, to amend 39 CFR 266.9 to apply certain Privacy Act exemptions to Privacy Act systems of records 050.080. 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).

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.” Comments on the proposed rule were due on or before January 26, 2001. We did not receive any comments. Therefore, the rule is adopted as final without change.

The Postal Service is hereby giving notice of a final 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 is amending 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:

* * * * *

(b) * * *

(7) Finance Records—Suspicious Transaction Reports, USPS 050.080. This system is exempt from 5 U.S.C. 552a (c)(3), (d)(1) through (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) through (d)(1) through (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 final change will be published.

Stanley F. Mires,

Chief Counsel, Legislative.