Privacy Act Exemptions

DEPARTMENT OF THE TREASURY <CFR>31 CFR Part 1</CFR> <SUBJECT>Privacy Act Exemptions</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Departmental Offices, Department of the Treasury. <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> In accordance with the Privacy Act of 1974, as amended (Privacy Act), the Department of the Treasury (Treasury), Departmental Offices gives notice of a proposed exemption for 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 the Executive order 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. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Written comments must be received by October 21, 2024. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Comments may be submitted by any of the following methods: • <E T="03">Federal E-rulemaking Portal: https://www.regulations.gov.</E> Follow the instructions for submitting comments. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment and ensures timely receipt. • <E T="03">Mail:</E> U.S. Department of the Treasury, Attention: Meena R. Sharma, Director, Office of Investment Security Policy and International Relations, 1500 Pennsylvania Avenue NW, Washington, DC 20220. Treasury encourages comments to be submitted via <E T="03">https://www.regulations.gov.</E> All comments submitted, including attachments and other supporting material, will be made public, including any personally identifiable or confidential business information that is included in a comment. Therefore, commenters should submit only information that they wish to make publicly available. Commenters who wish to remain anonymous should not include identifying information in their comments. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> 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. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Background</HD> 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 the Department of the Treasury (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 under the 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 or transactions 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 Order. On June 21, 2024, Treasury issued a notice of proposed rulemaking (NPRM) to seek public comment on the proposed rule, 89 FR 55846 (published July 5, 2024). Treasury intends to require U.S. persons to provide notification of certain transactions under its implementing regulations. This information would 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 would 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. Treasury also intends to require 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 implementing regulations. These transactions are the subject of this document. In a systems of records notice published elsewhere in this issue of the <E T="04">Federal Register</E> <E T="03">,</E> Treasury's Departmental Offices is proposing to establish a system of records for information collected in connection with the implementation of the Order. <HD SOURCE="HD1">Privacy Act</HD> Treasury, Departmental Offices is hereby giving notice of a proposed 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 proposes to exempt the following system of records from various provisions of the Privacy Act: <HD SOURCE="HD2">DO .413—Outbound Investment Security Program Notification System</HD> Under 5 U.S.C. 552a(k)(1) and (k)(2), Treasury proposes that 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 (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 disagreemen ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 16k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━