01-8511. Departmental Offices; Privacy Act of 1974; Implementation

AGENCY:

Department of the Treasury.

ACTION:

Final rule.

SUMMARY:

The Department of the Treasury is amending its Privacy Act exemption rules which were published on November 21, 2000, which consolidated the regulations issued pursuant to 5 U.S.C. 552a(j) and (k) exempting one or more systems of records established on behalf of each bureau by the Department.

EFFECTIVE DATE:

April 6, 2001.

ADDRESSES:

Inquiries may be addressed to Department of the Treasury, Disclosure Services, Washington, DC 20220.

FOR FURTHER INFORMATION CONTACT:

Dale Underwood, Deputy Assistant Director, Disclosure Services, [phone].

SUPPLEMENTARY INFORMATION:

On November 21, 2000, the Department of the Treasury published a final rule, at 65 FR 69865, amending its regulations issued pursuant to 5 U.S.C. 552a (j) and (k).

As noted in the rule, the Privacy Act of 1974 at subsection (k), authorizes the head of an agency to promulgate rules in accordance with the Administrative Procedure Act to exempt any system of records within the agency from subsections (c)(3), (d), (e)(1), (e)(4)(G), (H), and (I) and (f) of this section 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.

Disclosure Services received a comment about the final rule which contended that paragraph (h) of the final rule did not effectively reflect that the (k)(2) exemption attaches to civil as well as criminal investigatory materials and therefore, did not fully communicate the reasons for which the (k)(2) exemption has been claimed since 1975. The comments suggested that paragraph (h) could be read to limit the availability of the (k)(2) exemption to only those records which pertain to a criminal investigation, an arrest for criminal conduct, or law enforcement activities of a criminal investigator. We agree with that assessment, and language is being added to paragraph (h) which will more fully reflect the protection afforded records relating to the enforcement of civil and administrative laws as permitted by the Act. The amendments underscore the difference between the protection of Privacy Act records collected for the enforcement of criminal laws by such Treasury bureaus as ATF and Secret Service pursuant to 5 U.S.C. 552a(j)(2), and the protection of Privacy Act records collected for non-criminal law enforcement purposes by the Comptroller of the Currency, Office of Foreign Assets Control, or other Treasury offices as permitted by 5 U.S.C. 552a(k)(2).

These regulations are being published as a final rule because the amendment does not impose any requirements on any member of the public. This amendment is the most efficient means for the Treasury Department to implement its internal requirements for complying with the Privacy Act.

Accordingly, pursuant to the administrative procedure provisions in 5 U.S.C. 553, the Department of the Treasury finds good cause that prior notice and other public procedure with respect to this rule are impracticable and unnecessary and finds good cause for making this rule effective on the date of publication in the Federal Register.

In accordance with Executive Order 12866, it has been determined that this final rule is not a “significant regulatory action” and, therefore, does not require a Regulatory Impact Analysis.

The regulation will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do not apply.

In accordance with the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Department of the Treasury has determined that this final rule will not impose new record-keeping, application, reporting, or other types of information collection requirements.

List of Subjects in 31 CFR Part 1

• Privacy

Part 1 Subpart C of title 31 of the Code of Federal Regulations is amended as follows:

PART 1—[AMENDED]

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

Authority: 5 U.S.C. 301 and 31 U.S.C. 321. Subpart A also issued under 5 U.S.C. 552 as amended. Subpart C also issued under 5 U.S.C. 552a.

2. Section 1.36 is amended as follows:

a. Paragraphs (h)(1)(i) and (ii) are revised,

b. Paragraph (h)(2) introductory text is amended by revising the second sentence;

c. Paragraphs (h)(2)(i)(A), (B), (C) and (ii) are revised;

d. Paragraph (h)(2)(iii) is amended by revising the second sentence;

e. Paragraph (h)(2)(iv) is revised;

f. Paragraph (h)(4) introductory text is amended by revising the third sentence;

g. Paragraph (h)(6) introductory text is amended by revising the second sentence; and

h. Paragraph (h)(6)(iii) is revised.

The revisions to § 1.36 read as follows:

§ 1.36

Systems exempt in whole or in part from provisions of 5 U.S.C. 522a and this part.

* * * * *

(h) * * *

(1) * * *

(i) The application of this provision would impair the ability of the Department and of law enforcement agencies outside the Department of the Treasury to make effective use of information maintained by the Department. Making accountings of disclosures available to the subjects of an investigation would alert them to the fact that an agency is conducting an investigation into their illegal activities and could reveal the geographic location of the investigation, the nature and purpose of that investigation, and the dates on which that investigation was active. Violators possessing such knowledge would be able to take measures to avoid detection or apprehension by altering their operations, by transferring their illegal activities to other geographical areas, or by destroying or concealing evidence that would form the basis for detection or apprehension. In the case of a delinquent account, such release might enable the subject of the investigation to dissipate assets before levy.

(ii) Providing accountings to the subjects of investigations would alert them to the fact that the Department has information regarding their illegal activities and could inform them of the general nature of that information.

* * * * *

(2) * * * The application of these provisions to the systems of records would compromise the Department's ability to utilize and provide useful tactical and strategic information to law enforcement agencies.

(i) * * *

(A) discovering the facts that would form the basis for their detection or apprehension;

(B) enabling them to destroy or alter evidence of illegal conduct that would form the basis for their detection or apprehension, and

(C) using knowledge that investigators had reason to believe that a violation of law was about to be committed, to delay the commission of the violation or commit it at a location that might not be under surveillance.

(ii) Permitting access to either on-going or closed investigative files would also reveal investigative techniques and procedures, the knowledge of which could enable individuals planning non-criminal acts to structure their operations so as to avoid detection or apprehension.

(iii) * * * Confidential sources and informers might refuse to provide investigators with valuable information unless they believed that their identities would not be revealed through disclosure of their names or the nature of the information they supplied. * * *

(iv) Furthermore, providing access to records contained in the systems of records could reveal the identities of undercover law enforcement officers or other persons who compiled information regarding the individual's illegal activities and thereby endanger the physical safety of those undercover officers, persons, or their families by exposing them to possible reprisals.

(4) * * * The application of this provision to the system of records could impair the Department's ability to collect, utilize and disseminate valuable law enforcement information.

* * * * *

(6) * * * The application of this provision to the systems of records could compromise the Department's ability to complete or continue investigations or to provide useful information to law enforcement agencies, since revealing sources for the information could:

* * * * *

(iii) Cause informers to refuse to give full information to investigators for fear of having their identities as sources disclosed.

* * * * *

Dated: March 30, 2001.

W. Earl Wright, Jr.,

Chief Management and Administrative Programs Officer.