Rule2024-29596
Privacy Act Exemptions
Primary source
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Published
December 17, 2024
Effective
January 16, 2025
Issuing agencies
Treasury Department
Abstract
In accordance with the Privacy Act of 1974, as amended (Privacy Act), the Department of the Treasury, Departmental Offices is issuing a final rule, exempting a new system of records entitled "Department of the Treasury, Departmental Offices .413--Outbound Investment Security Program Notification System" from certain provisions of the Privacy Act. The Outbound Investment Security Program Notification System is being established for information collected in connection with the implementation of Executive Order 14105 of August 9, 2023. The exemption is intended to comply with the legal prohibitions against the disclosure of certain kinds of information and to protect certain information maintained in this system of records.
Full Text
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<title>Federal Register, Volume 89 Issue 242 (Tuesday, December 17, 2024)</title>
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[Federal Register Volume 89, Number 242 (Tuesday, December 17, 2024)]
[Rules and Regulations]
[Pages 101887-101889]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-29596]
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DEPARTMENT OF THE TREASURY
Office of the Secretary
31 CFR Part 1
RIN 1505-AC32
Privacy Act Exemptions
AGENCY: Departmental Offices, Department of the Treasury.
ACTION: Final rule.
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SUMMARY: In accordance with the Privacy Act of 1974, as amended
(Privacy Act), the Department of the Treasury, Departmental Offices is
issuing a final rule, exempting a new system of records entitled
``Department of the Treasury, Departmental Offices .413--Outbound
Investment Security Program Notification System'' from certain
provisions of the Privacy Act. The Outbound Investment Security Program
Notification System is being established for information collected in
connection with the implementation of Executive Order 14105 of August
9, 2023. The exemption is intended to comply with the legal
prohibitions against the disclosure of certain kinds of information and
to protect certain information maintained in this system of records.
DATES: This rule is effective on January 16, 2025.
FOR FURTHER INFORMATION CONTACT: For general questions and questions
regarding privacy issues, please contact: Ryan Law, Deputy Assistant
Secretary for Privacy, Transparency, and Records, Department of the
Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220; telephone:
(202) 622-5710.
SUPPLEMENTARY INFORMATION:
Background
The Department of the Treasury (Treasury) published a notice of
proposed rulemaking (Systems Exemption NPRM) in the Federal Register,
89 FR 76783 (published September 19, 2024), proposing to exempt
portions of the system of records from one or more provisions of the
Privacy Act.
As background, on August 9, 2023, the President issued Executive
Order 14105, 88 FR 54867 (the Outbound Order), which declares a
national emergency to address the threat to the United States posed by
countries of concern, which seek to develop and exploit sensitive
technologies or products critical for military, intelligence,
surveillance, or cyber-enabled capabilities. Among other things, the
Outbound Order directs the Secretary of the Treasury to issue
regulations that require U.S. persons to provide notification of
information to Treasury regarding certain transactions involving a
person of a country of concern that is engaged in certain activities
involving covered national security technologies and products that may
contribute to the threat to the national security of the United States
as identified in the Outbound Order. The Outbound Order also directs
the Secretary of the Treasury to issue regulations that prohibit
certain transactions by a U.S. person involving a person of a country
of concern that is engaged in certain activities involving covered
national security technologies and products that pose a particularly
acute national security threat to the United States. The Outbound Order
authorizes the Secretary of the Treasury to exempt from applicable
prohibitions or notification requirements any transaction determined to
be in the national interest of the United States. On August 9, 2023,
Treasury issued an advance notice of proposed rulemaking, 88 FR 54961
(published August 14, 2023), to explain initial considerations and seek
public comment on implementation of the Outbound Order.
On June 21, 2024, Treasury issued a notice of proposed rulemaking
to seek public comment on the proposed rule, 89 FR 55846 (published
July 5, 2024). On October 28, 2024, Treasury issued a final rule, [89
FR 90398] (published November 15, 2024) (the Outbound Rule), setting
forth the regulations that implement the Outbound Order. The Outbound
Rule requires U.S. persons to provide notification of certain
transactions. This information will include relevant details on the
U.S. person(s) involved in the transaction as well as information on
the transaction and the foreign person(s) involved. These notifications
will increase the U.S. Government's visibility into transactions by
U.S. persons or their controlled foreign entities and involving
technologies and products relevant to the threat to the national
security of the United States due to the policies and actions of
countries of concern. These notifications would also be helpful in
highlighting aggregate sector trends and related capital flows as well
as informing future policy development. The Outbound Rule also requires
any U.S. person seeking a national interest exemption for a particular
transaction to submit information to Treasury regarding the scope of
that transaction including, as applicable, the information that would
be required for a notification under the Outbound Rule.
Treasury's Departmental Offices published separately the notice of
a new system of records, 89 FR 76917 (published September 19, 2024),
for information collected in connection with the implementation of the
Outbound Order.
Public Comments
Treasury received five comments on the Systems Exemption NPRM. Four
commenters support the proposed exemptions because of their importance
to protect national security. One commenter urged Treasury to consider
the importance of transparency and accountability in government, as
well as the impact exemptions to the Privacy Act could have on public
trust. The commenter expressed concern that the Systems Exemption NPRM
was too broad and noted that exemptions to the Privacy Act should be
clearly defined and limited to situations implicating national
security. The commenter also questioned whether there were any checks
and balances in place to ensure that data is only collected in the
interest of national security and public safety.
[[Page 101888]]
Treasury notes the importance of transparency and accountability
and the role of the Privacy Act in supporting those goals. As noted in
the Systems Exemption NPRM, notification is limited to those
transactions that may contribute to the threat to the national security
of the United States identified in the Outbound Order, and the scope of
notifiable transactions is linked to subsets of technologies and
products and based on specific descriptions and technical thresholds
provided in the Outbound Rule. In addition, the specific information
required to be submitted to Treasury in the notifications is a limited
universe of information related to the relevant transaction.
Furthermore, as noted in the Outbound Rule, Treasury recognizes the
importance of safeguarding sensitive information and has included
specific confidentiality provisions in the regulations. Among the
checks and balances in place, the Outbound Order requires annual
reports be submitted to the President with an assessment of the
effectiveness of the measures imposed under the Outbound Order in
addressing threats to the national security of the United States, among
other things. Treasury makes no changes to this final rule in response
to these comments.
Privacy Act
Treasury is hereby promulgating a final rule to exempt the Outbound
Investment Security Program Notification System from certain provisions
of the Privacy Act pursuant to 5 U.S.C. 552a(k)(1) and (k)(2) and the
authority vested in the Secretary of the Treasury by 31 CFR 1.23(c).
Under 5 U.S.C. 552a(k)(1), the head of a Federal 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 subject to the exemption
contained in section 552(b)(1) of this title. (Freedom of Information
Act, exemption (b)(1) protects from disclosure information that has
been deemed classified ``under criteria established by an Executive
order to be kept secret in the interest of national defense or foreign
policy'' and is ``in fact properly classified pursuant to such
Executive order.'')
Under 5 U.S.C. 552a(k)(2), the head of a Federal agency may
promulgate rules to exempt a system of records from certain provisions
of 5 U.S.C. 552a if the system of records contains investigatory
materials compiled for law enforcement purposes that are not within the
scope of subsection (j)(2) of the Privacy Act (which applies to
agencies and components thereof that perform as their principal
function any activity pertaining to the enforcement of criminal laws).
To the extent that this system of records contains classified
information protected by 5 U.S.C. 552a(k)(1) or investigatory materials
compiled for law enforcement purposes protected by 5 U.S.C. 552a(k)(2),
Treasury exempts the following system of records from various
provisions of the Privacy Act:
DO .413--Outbound Investment Security Program Notification System
Under 5 U.S.C. 552a(k)(1) and (k)(2), Treasury exempts certain
records in the above-referenced system of records be exempt from 5
U.S.C. 552a(c)(3), (d)(1) through (4), (e)(1), (e)(4)(G) through (I),
and (f) of the Privacy Act. See 31 CFR 1.36.
The following are the reasons why the classified records and
investigatory materials contained in the above-referenced system of
records may be exempted from various provisions of the Privacy Act
pursuant to 5 U.S.C. 552a(k)(1) and (k)(2).
1. 5 U.S.C. 552a(c)(3) requires an agency to make any accounting of
disclosures of records required by 5 U.S.C. 552a(c)(1) available to the
individual named in the record upon his or her request. Exemption from
this requirement is appropriate because release of the accounting of
disclosures of the records in this system could alert individuals
whether they have been identified as the subject of an analysis related
to the national security interests of the United States, to the
existence of the analysis, and reveal the interest on the part of
Treasury as well as the recipient agency. Disclosure of the accounting
would present a serious impediment to efforts to protect national
security interests by giving individuals an opportunity to learn
whether they have been identified as subjects of a national security-
related analysis. As further described in the following paragraph,
access to such knowledge would impair Treasury's ability to carry out
its mission, since individuals could:
i. Take steps to avoid analysis;
ii. inform associates that a national security analysis is in
progress;
iii. learn the nature of the national security analysis;
iv. learn the scope of the national security analysis;
v. begin, continue, or resume conduct that may pose a threat to
national security upon inferring they may not be part of a national
security analysis because their records were not disclosed; or
vi. destroy information relevant to the national security analysis.
2. 5 U.S.C. 552a(d)(1) through (4) grant individuals access to
records containing information about them and permit them to request
amendment of a record pertaining to them and require the agency either
to amend the record or note the disputed portion of the record and, if
the agency refuses to amend the record, to provide a copy of the
individual's statement of disagreement with the agency's refusal, to
persons or other agencies to whom the record is thereafter disclosed.
Exemption from this requirement is appropriate because access to a
portion of the records contained in this system of records could inform
individuals whether they have been identified as the subject of an
analysis related to the national security interests of the United
States, to the existence of the analysis and reveal the interest on the
part of Treasury or another agency. Access to the records would present
a serious impediment to efforts to protect national security interests
by permitting the individual who is the subject of a record to learn
whether they have been identified as a subject of a national security-
related analysis. Access to such knowledge would impair Treasury's
ability to carry out its mission, since individuals could take steps to
impede the analysis and avoid detection, including the steps described
in paragraph 1.i-through vi of this section. Amendment of the records
would interfere with ongoing analysis and impose an impossible
administrative burden. The information contained in the system may also
include classified information, the release of which would pose a
threat to the national security of the United States. In addition,
permitting access and amendment to such information could disclose
sensitive security information that could be detrimental to Treasury.
3. 5 U.S.C. 552a(e)(1) requires an agency to maintain in its
records only such information about an individual as is relevant and
necessary to accomplish a purpose of the agency required to be
accomplished by statute or Executive order. Exemption from this
requirement is appropriate because what information is relevant and
necessary may not always be apparent at the time of collection. In the
interests of national security, it is appropriate to include a broad
range of information that may aid in identifying and assessing the
nature and scope of national security threats to the United States.
Additionally, the accuracy of information obtained or introduced
occasionally may be unclear, or the information may not be strictly
relevant or necessary to a specific analysis. In the interests of
national security, it is appropriate to retain all
[[Page 101889]]
information that may aid in establishing patterns of suspicious
activity.
4. 5 U.S.C. 552a(e)(4)(G) through (I) and 5 U.S.C. 552a(f) require
an agency to publish the agency procedures whereby individuals can be
notified if the system of records pertains to them, how they can gain
access to any record pertaining to them in the system of records and
contest its content, and the categories of sources of records in the
system. Exemption from these requirements is appropriate because, as
noted above, this system is exempt from the access and amendment
provisions of subsection (d).
Any records from another Treasury system of records or another
Executive Branch agency's system of records for which an exemption is
claimed under 5 U.S.C. 552a(j) or (k) that may also be included in this
system of records retains the same exempt status as such records have
in the system for which such exemption is claimed.
Regulatory Analysis
This rule is not a ``significant regulatory action'' under
Executive Order 12866. Pursuant to the requirements of the Regulatory
Flexibility Act (RFA), 5 U.S.C. 601 et seq., it is hereby certified
that this rule will not have a significant economic impact on a
substantial number of small entities. This rule, issued pursuant to 5
U.S.C. 552a(k), exempts certain information maintained by Treasury in
the above-referenced systems of records from certain provisions of the
Privacy Act. Small entities, as defined in the RFA, are not provided
rights under the Privacy Act and are outside the scope of this
regulation.
The related information collections have been submitted to the
Office of Management and Budget on July 8, 2024 under control number:
1505-0282.
List of Subjects in 31 CFR Part 1
Courts, Freedom of Information, Government Employees, Privacy.
For the reasons stated in the preamble, part 1 of title 31 of the
Code of Federal Regulations is amended as follows:
PART 1--DISCLOSURE OF RECORDS
0
1. The authority citation for part 1 continues to read as follows:
Authority: 5 U.S.C. 301, 552, 552a, 553; 31 U.S.C. 301, 321; 31
U.S.C. 3717.
0
2. Amend Sec. 1.36 by adding, in alphanumeric order, entries for ``DO
.413--Outbound Investment Security Program Notification System'' in
table 8 to paragraph (e)(1)(ii) and table 11 to paragraph (g)(1)(ii) to
read as follows:
Sec. 1.36 Systems exempt in whole or in part from provisions of the
Privacy Act and this part.
* * * * *
(e) * * *
(1) * * *
(ii) * * *
Table 8 to Paragraph (e)(1)(ii)
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No. Name of system
------------------------------------------------------------------------
* * * * * * *
------------------------------------------------------------------------
DO .413.................. Outbound Investment Security Program
Notification System.
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* * * * *
(g) * * *
(1) * * *
(ii) * * *
Table 11 to Paragraph (g)(1)(ii)
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No. Name of system
------------------------------------------------------------------------
* * * * * * *
------------------------------------------------------------------------
DO .413.................. Outbound Investment Security Program
Notification System.
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* * * * *
Dated: December 11, 2024.
Ryan Law,
Deputy Assistant Secretary for Privacy, Transparency, and Records.
[FR Doc. 2024-29596 Filed 12-16-24; 8:45 am]
BILLING CODE 4810-AK-P
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</html>Indexed from Federal Register on December 17, 2024.
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