[Federal Register Volume 59, Number 171 (Tuesday, September 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21774]


[[Page Unknown]]

[Federal Register: September 6, 1994]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 103

RIN 1515-AB58

 

Disclosure or Production of Customs Information Pursuant to Legal 
Process

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to amend the Customs Regulations to 
clarify the procedures to be followed when subpoenas or other demands 
of courts and other authorities, except Congress, are issued to compel 
the disclosure or production of Customs information, i.e., documents, 
information, or employee testimony, for use in federal, state, local, 
and foreign proceedings. The proposed procedures will be applicable to 
current and former Customs employees and to litigants who seek to 
compel Customs employees to disclose or produce Customs information. 
Specifically, the amendments seek to centralize in the Office of Chief 
Counsel determinations concerning the disclosure of such information. 
The goal of this proposal is to ensure the uniform processing of 
subpoenas served on Customs employees and the more efficient use of 
Customs personnel resources in responding to requests in a timely 
manner. The amendments also propose to restructure the general 
organizational scheme of part 103 of the Customs Regulations to clarify 
their application.

DATES: Comments must be received on or before November 7, 1994.

ADDRESSES: Written comments (preferably in triplicate) may be addressed 
to the Regulations Branch, Office of Regulations and Rulings, U.S. 
Customs Service, Franklin Court, 1301 Constitution Avenue, NW., 
Washington, D.C. 20229. Comments submitted may be inspected at the 
Regulations Branch, Office of Regulations and Rulings, U.S. Customs 
Service, Franklin Court, 1099 14th St., NW, Suite 4000, Washington, 
D.C.

FOR FURTHER INFORMATION CONTACT: Senoria Clarke, Office of the Chief 
Counsel (202) 927-6900.
SUPPLEMENTARY INFORMATION:

Background

    Customs enforces some 600 laws for 60 agencies while facilitating 
the flow of merchandise in international commerce. In addition to 
maintaining records relevant to its enforcement functions, Customs also 
maintains information that has a bearing on other law enforcement 
provisions. Many of the records Customs maintains contain confidential 
business information subject to the Trade Secrets Act, 18 U.S.C. 1905, 
which prohibits the unauthorized disclosure of such information by an 
officer or employee of the United States.
    Regulations pertaining to Customs release of information, i.e., 
documents, information, or employee testimony, subpoenaed for use in 
judicial proceedings are found at Sec. 103.17 of the Customs 
Regulations (19 CFR 103.17). But while Sec. 103.17 provides some 
procedures regarding the disclosure of information, e.g., the testimony 
of employees, and the production of documents pursuant to a subpoena 
duces tecum in cases both where the agency is and is not a party to a 
legal proceeding, it does not adequately describe the procedures for 
determining whether and how the information should be released in 
response to such demands.
    In 1992, Customs information was subpoenaed in connection with at 
least 440 cases. In 1993, the number of cases increased to 
approximately 550. These demands for Customs information necessarily 
draw personnel and other resources away from the agency's mission to 
administer the customs and related laws concerning the importation of 
merchandise. As litigants increasingly subpoena information in the 
possession, custody or control of Customs, the need to provide clear 
procedures both to Customs personnel and to litigants is urgent. 
Clarification of the procedures would allow Customs to manage more 
effectively the just, speedy, and inexpensive determination of such 
demands while ensuring Customs has adequate time to properly consider 
whether the information sought should be made available.
    Accordingly, Customs proposes to restructure the organizational 
scheme of part 103 of the regulations in general, to clarify their 
application, and to amend the provisions of Sec. 103.17 in particular, 
to set forth procedures applicable to demands for the disclosure and 
production of Customs-maintained information. In proposing to revise 
Sec. 103.17, we have considered other federal agencies' positions in 
this regard, particularly those of the Department of Justice (28 CFR 
Part 16, subpart B), bearing in mind the unique mission of the Customs 
Service as the principal border enforcement agency of the United 
States. Furthermore, the Federal Rules of Civil Procedure, 28 U.S.C. 
App., were relied upon concerning the appropriate burden litigants must 
bear when they subpoena information from the Federal government.
    In proposing to revise the provisions of Sec. 103.17, a balance has 
been sought to provide clear procedures for Customs employees and 
litigants to follow when Customs information is sought in Federal, 
State, local, and foreign proceedings. So that limited government 
resources will not be inordinately tied up with the processing of 
subpoena demands, the proposed regulations require litigants demanding 
Customs-maintained information to demonstrate that the information 
sought is (a) relevant and material to the action pending, (b) 
genuinely necessary to the proceeding, i.e., a showing of substantial 
need is made, and (c) unavailable from other sources. In addition, 
Customs will examine whether the scope of the request is reasonable. 
Customs is also proposing that copies of the summons and complaint be 
attached to the subpoena, and that the information sought be described 
with particularity, so that it can be located quickly and reviewed for 
privilege, confidentiality, law enforcement sensitivities, and other 
Customs matters that impact the decision whether to withhold or release 
the information.

Section-by-Section Analysis and Discussion

Section 103.0

    It is proposed to revise the scope section to state that the extent 
of production/disclosure of requested Customs information depends, to 
some extent, upon whether the information is requested pursuant to 
statutes, i.e., the Freedom of Information Act, as amended (5 U.S.C. 
552), or the Privacy Act of 1974, as amended (5 U.S.C. 552a), or 
demanded on other legal bases, i.e., pursuant to a subpoena.

Sections 103.1-103.13

    These sections are grouped under a new Subpart A, which carries the 
heading ``Production of documents/disclosure of information pursuant to 
the FOIA''. No changes to these regulatory provisions are proposed.

Sections 103.14-103.16 and section 103.18

    These sections are reordered and redesignated as Secs. 103.31 
through 103.34 and grouped under a new Subpart C, which carries the 
heading ``Other information subject to restricted access''. Although no 
changes to these regulatory provisions are proposed, because 
redesignated Sec. 103.18 (Sec. 103.33, see below) has a specific 
statutory basis (19 U.S.C. 1628), this authority citation is added 
under the authority section for part 103.

Section 103.17

    This section is redesignated and expanded to embrace seven sections 
(Secs. 103.21-103.27), all grouped under a new Subpart B, which carries 
the heading ``Production/disclosure in Federal, State, Local, and 
Foreign proceedings''. The provisions of the proposed new sections are 
as follows:
    New Sec. 103.21, headed ``Purpose and definitions,'' is in eight 
paragraphs ((a) through (h)). Paragraph (a) indicates both the types of 
information covered and the circumstances under which the regulations 
apply. Paragraphs (b), (c), and (d) define the terms ``Customs 
employee'', ``Customs documents'', and ``originating component'', 
respectively. Paragraphs (e) through (g) serve to limit the scope of 
the regulations, by providing that they are not intended to impede or 
restrict the appropriate disclosure of: (1) any information to federal, 
state, local, or foreign law enforcement or regulatory agencies 
(paragraph e); (2) any information to certain federal attorneys and 
judges in connection with Customs cases referred by the Department of 
the Treasury to the Department of Justice for prosecution or defense 
(paragraph (f)); or, (3) any non-Customs information, in cases where a 
Customs employee, in a personal capacity, is either a party or witness 
to a proceeding (paragraph g). Paragraph (h) provides that these 
regulations do not create any rights or benefits, substantive or 
procedural, enforceable by any party against the United States.
    New Sec. 103.22, headed ``Procedure in the event of a demand for 
Customs information in any federal, state, or local civil proceeding,'' 
is in eight paragraphs ((a) through (h)). Paragraph (a) generally 
prohibits the production or disclosure of Customs documents or 
testimony by employees in Federal proceedings or State or local civil 
proceedings, absent the prior approval of the Chief Counsel's Office. 
Paragraph (b) requires Customs employees to report a demand for 
information under these regulations to the Regional or District 
Counsel, or to the Office of the Chief Counsel, depending on the 
employee's location, and then await instructions. Paragraph (c) 
requires that parties seeking Customs documents or testimony provide an 
affidavit (or, if an affidavit is not feasible, a statement) to Customs 
summarizing the information sought and its relevance to the proceeding 
in question. Paragraph (c) also restricts disclosure of Customs 
information to the scope of the demand and authorizes Chief Counsel to 
waive the foregoing requirements for cause shown. Paragraph (d) 
requires service of the affidavit (or statement) at least five working 
days prior to the scheduled date of the requested disclosure. Paragraph 
(e) provides that Chief Counsel shall immediately upon receipt of the 
affidavit (or statement) advise the official in charge of the Office or 
Division of the employee on whom process was served. Paragraph (f) sets 
forth the conditions for authorizing the disclosure of Customs 
information. Paragraph (g) provides that Chief Counsel will authorize 
the disclosure of Customs information, after any necessary consultation 
with the originating component and such efforts to limit disclosure as 
are in accordance with the factors specified in Sec. 103.23.
    New Sec. 103.23, headed ``Factors in determining whether to 
disclose information pursuant to a demand'', is in two paragraphs. 
Paragraph (a) requires Chief Counsel to consider the applicable rules 
of procedure and substantive law of privilege in deciding whether to 
make disclosures. The regulation adopts a general approach instead of 
detailing a list of specific considerations because the application of 
rules of procedure and the substantive law concerning privilege may 
vary according to the nature of the demand. Paragraph (b), however, 
specifically identifies certain circumstances in which disclosure of 
Customs information will not be authorized. These circumstances, in 
essence, identify several areas of privilege or legally prohibited, 
restricted, or discretionary disclosure that are most relevant to 
Customs operations. They are intended to be compatible with the Freedom 
of Information Act, 5 U.S.C. 552(b), the Privacy Act, 5 U.S.C. 552a, 
and other treaties, statutes, and applicable rules of procedure. These 
standards are generally consistent and parallel with those issued under 
analogous Department of Justice regulations.
    New Sec. 103.24, headed ``Procedure in the event a decision 
concerning a demand is not made prior to the time a response to the 
demand is required'', provides that when a response is required before 
appropriate subpoena instructions have been received from Chief 
Counsel, the U.S. Attorney, his/her assistant, or other appropriate 
legal representative, shall be requested to appear with the employee 
upon whom demand has been made. Such legal representative shall then 
furnish the court with a copy of the regulations and request a stay of 
the demand, pending receipt of the instructions. This section parallels 
the Department of Justice regulations.
    New Sec. 103.25, headed ``Procedure in the event of an adverse 
ruling'', provides that when a court does not grant a stay as requested 
under the preceding section, the employee shall respectfully decline to 
comply with the demand. This section again parallels the Department of 
Justice regulations.
    New Sec. 103.26, headed ``Procedure in the event of a demand for 
Customs information in a state or local criminal proceeding'', provides 
that Customs Regional Commissioners, special agents in charge, and 
chiefs of field laboratories may authorize employees under their 
supervision to attend trials and administrative hearings in state or 
local criminal cases to produce records and testify as to facts in 
their knowledge in their official capacities on behalf of the 
government. However, in the event that a defendant requests or demands 
testimony, document production, or information, Chief Counsel 
authorization is required as under this subpart. This section thus 
clarifies circumstances relating to requests in state and local 
proceedings in which Chief Counsel authorization is necessary.
    New Sec. 103.27, headed ``Procedure in the event of a demand for 
Customs information in a foreign proceeding where Customs is not a 
party'', is in five paragraphs ((a) through (e)). Paragraph (a) 
requires Chief Counsel authorization, as described in paragraph (b), 
prior to disclosure of documents or information, or the giving of 
testimony in response to a demand or request in a foreign proceeding in 
which Customs is not a party. Paragraph (b) requires Customs employees 
receiving such demands concerning pre-clearance activities, if in the 
field, to notify immediately the Regional or District Counsel for the 
region or district having jurisdiction over the pre-clearance location. 
In connection with all other demands, they are to notify immediately 
the Office of the Chief Counsel. The employee shall then await 
appropriate subpoena instructions from the office so notified. This 
paragraph provides procedural clarification not provided in the current 
regulations. Paragraph (c) requires Chief Counsel to immediately 
acknowledge receipt of a demand to the Customs official in charge of 
the office or division of Customs--collectively referred to as the 
``originating component''--that employs or employed the person 
concerned, as a measure to enhance government efficiency in processing 
such demands. Paragraph (d) provides for the authorization of 
disclosure where the originating component has no objection and where 
disclosure is otherwise appropriate within the terms of Sec. 103.23. 
These procedures protect Customs interests while facilitating 
international cooperation in judicial proceedings. Paragraph (e) 
additionally provides that, in cases where the information requested is 
related to Customs litigation or investigation, Chief Counsel will seek 
to limit the demands through negotiation.

Comments

    Before adopting this proposal as a final rule, consideration will 
be given to any written comments timely submitted to Customs. Comments 
submitted will be available for public inspection in accordance with 
the Freedom of Information Act (5 U.S.C. 552), Sec. 1.4 of the Treasury 
Department Regulations (31 CFR 1.4), and Sec. 103.11(b) of the Customs 
Regulations (19 CFR 103.11(b)), on regular business days between the 
hours of 9 a.m. and 4:30 p.m. at the Regulations Branch, U.S. Customs 
Service, Franklin Court, 1099 14th St., NW, Suite 4000, Washington, 
D.C.

Inapplicability of the Regulatory Flexibility Act and Executive 
Order 12866

    Although this document is being issued with notice for public 
comment, it is exempt from the notice and public procedure requirements 
of 5 U.S.C. 553 because it relates to agency management and 
organization. Accordingly, this document is not subject to the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
This document does not meet the criteria for a ``significant regulatory 
action'' as specified in E.O. 12866.

List of Subjects in 19 CFR Part 103

    Administrative practice and procedure, Confidential business 
information, Courts, Exports, Freedom of Information, Imports, Law 
enforcement, Privacy, Reporting and recordkeeping requirements, 
Subpoenas.

Proposed Amendment to the Regulations

    For the reasons set forth above, it is proposed to amend part 103, 
Customs Regulations (19 CFR part 103), as set forth below:
    1. The table of contents of part 103 is revised to read as set 
forth below to reflect the amendments that follow:

PART 103--AVAILABILITY OF INFORMATION

Sec.
103.0  Scope.

Subpart A--Production of documents/disclosure of information 
pursuant to the FOIA

103.1  Public reading rooms.
103.2  Information available to the public.
103.3  Publication of information in the Federal Register.
103.4  Public inspection and copying.
103.5  Specific requests for records.
103.6  Grant or denial of initial request.
103.7  Administrative appeal of initial determination.
103.8  Time extensions.
103.9  Judicial review.
103.10  Fees for services.
103.11  Specific Customs Service records subject to disclosure.
103.12  Exemptions.
103.13  Segregability of records.

Subpart B--Production/disclosure in Federal, State, Local, and 
Foreign proceedings

103.21  Purpose and definitions.
103.22  Procedure in the event of a demand for Customs information 
in any federal, state, or local proceeding.
103.23  Factors in determining whether to disclose information 
pursuant to a demand.
103.24  Procedure in the event a decision concerning a demand is not 
made prior to the time a response to the demand is required.
103.25  Procedure in the event of an adverse ruling.
103.26  Procedure in the event of a demand for Customs information 
in a state or local criminal proceeding.
103.27  Procedure in the event of a demand for Customs information 
in a foreign proceeding where Customs is not a party.

Subpart C--Other Information Subject to Restricted Access

103.31  Information on vessel manifests and summary statistical 
reports.
103.32  Information concerning fines, penalties, and forfeitures 
cases.
103.33  Release of information to foreign agencies.
103.34  Sanctions for improper actions by Customs officers or 
employees.
    2. The general authority citation for part 103 is revised and 
specific authority citations for Secs. 103.33 and 103.34 are added to 
read as follows:

    Authority: 5 U.S.C. 301, 552, 552a; 19 U.S.C. 66, 1624; 31 
U.S.C. 9701.

    Section 103.33 also issued under 19 U.S.C. 1628;
    Section 103.34 also issued under 18 U.S.C. 1905.

    3. Section 103.0 is revised to read as follows:


Sec. 103.0   Scope.

    This part governs the production/disclosure of agency-maintained 
documents/information requested pursuant to various disclosure laws 
and/or legal processes. Thus, the extent of disclosure of requested 
information may be dependent on whether the request is pursuant to the 
provisions of the Freedom of Information Act (FOIA), as amended (5 
U.S.C. 552), the Privacy Act of 1974, as amended (5 U.S.C. 552a), and/
or under other statutory or regulatory authorities, as required by 
administrative and/or legal processes. The regulations for this part 
contain a discussion of applicable fees for the search, duplication, 
review, and other tasks associated with processing information requests 
pursuant to the FOIA, and also provide for the appeal of agency 
decisions and sanctions for the improper withholding and/or the 
untimely release of requested information. As information obtained by 
Customs is derived from a myriad of sources, persons seeking 
information should consult with the Chief, Disclosure Law Branch, 
Office of Regulations and Rulings, United States Customs Service, 
Washington, DC 20229, or the appropriate regional commissioner of 
Customs or the public information officer for the region (see locations 
at Sec. 101.3) before invoking the formal procedures set forth in this 
part. These regulations supplement the regulations of the Department of 
the Treasury regarding public access to records, which are found at 31 
CFR part 1, and, in the event of any inconsistency between these 
regulations and those of the Department of the Treasury, the latter 
shall prevail. For purposes of this part, the Office of the Chief 
Counsel is considered a part of the United States Customs Service.
    4. Sections 103.1 through 103.13 are designated as subpart A and 
the heading for subpart A is added to read as follows:

Subpart A--Production of Documents/Disclosure of Information Under 
the FOIA

    5. Sections 103.14, 103.15, 103.16, and 103.18 are redesignated as 
Secs. 103.31, 103.34, 103.32, and 103.33, respectively, and designated 
as subpart C and a new heading for subpart C is added to read as 
follows:

Subpart C--Other Information Subject to Restricted Access

    6. Section 103.17 is removed.
    7. A new subpart B, consisting of Secs. 103.21 through 103.27 is 
added to read as follows:

Subpart B--Production or Disclosure in Federal, State, Local, and 
Foreign Proceedings


Sec. 103.21   Purpose and definitions.

    (a) Demands for Customs information subject to regulations. This 
subpart sets forth procedures to be followed with respect to the 
production/disclosure of any documents contained in Customs files, any 
information relating to material contained in Customs files, any 
testimony by a Customs employee, or any information acquired by any 
person, as part of that person's performance of official duties as a 
Customs employee or because of that person's official status 
(hereinafter, collectively referred to as ``information''), in all 
federal, state, local, and foreign proceedings when a subpoena, notice 
of deposition (either upon oral examination or written interrogatory), 
order, or demand (hereinafter, collectively referred to as a 
``demand'') of a court, administrative agency, or other authority is 
issued for such information.
    (b) Customs employee. For purposes of this subpart, the term 
``Customs employee'' includes all present and former officers and 
employees of the United States Customs Service.
    (c) Customs documents. For purposes of this subpart, the term 
``Customs documents'' includes any document (including copies thereof), 
no matter what media, produced by, obtained by, furnished to, or coming 
to the knowledge of, any Customs employee while acting in his/her 
official capacity, or because of his/her official status, with respect 
to the administration or enforcement of laws administered or enforced 
by the Customs Service.
    (d) Originating component. For purposes of this subpart, the term 
``originating component'' references the Customs official in charge of 
the office or division of Customs that employs or employed the person, 
or the official's designee, served with a subpoena or other demand for 
Customs information.
    (e) Disclosure to government law enforcement or regulatory 
agencies. Nothing in the subpart is intended to impede the appropriate 
disclosure of information by Customs to federal, state, local, and 
foreign law enforcement or regulatory agencies.
    (f) Disclosure to federal attorneys and the Court of International 
Trade. Nothing in this subpart is intended to restrict the disclosure 
of Customs information requested by the Court of International Trade, 
U.S. Attorneys, or attorneys of the Department of Justice, for use in 
cases which arise under the laws administered or enforced by, or 
concerning, the Customs Service and which are referred by the 
Department of the Treasury to the Department of Justice for prosecution 
or defense.
    (g) Disclosure of non-Customs information. Nothing in the subpart 
is intended to impede the appropriate disclosure of non-Customs 
information by Customs employees in any proceeding in which they are a 
party or witness solely in their personal capacities.
    (h) Failure of Customs employee to follow procedures. The failure 
of any Customs employee to follow the procedures specified in this 
subpart neither creates nor confers any rights, privileges, or benefits 
on any person or party.


Sec. 103.22   Procedure in the event of a demand for Customs 
information in any federal, state, or local civil proceeding.

    (a) General prohibition against disclosure. In any federal, state, 
or local civil proceeding in which the Customs Service is not a party, 
no Customs employee shall, in response to a demand, furnish Customs 
documents or testimony as to any material contained in Customs files, 
any information relating to or based upon material contained in Customs 
files, or any information or material acquired as part of the 
performance of that person's official duties (or because of that 
person's official status) without the prior written approval of the 
Office of Chief Counsel, as described in paragraph (b) of this section.
    (b) Employee notification to Counsel. Whenever a demand for 
information, as described in paragraph (a) of this section, is made 
upon a Customs employee, that employee shall immediately notify the 
Regional or District Counsel for the region or district where the 
employee is located. If the employee is located at Headquarters or 
outside of the United States, the employee shall immediately notify the 
Office of the Chief Counsel. The Customs employee shall await 
instructions from the Regional Counsel, District Counsel, Chief 
Counsel, or their designees concerning the response to the demand.
    (c) Requesting party's initial burden. An affidavit, or, if that is 
not feasible, a statement by the party seeking Customs information, 
that sets forth a summary of the documents or testimony sought and its 
relevance to the proceeding, must be furnished to the appropriate 
Office of the Chief Counsel, as provided in paragraph (b) of this 
section. Any disclosure authorization for documents or testimony by a 
Customs employee shall be limited to the scope of the demand as 
summarized in such affidavit or statement. The Chief Counsel may, upon 
request and for good cause shown, waive the requirements of this 
paragraph.
    (d) Required processing time. A demand for Customs documents or 
testimony, together with the affidavit or statement, shall be served at 
least five (5) working days prior to the scheduled date of production 
or disclosure, to ensure that the Chief Counsel has adequate time to 
consider the demand.
    (e) Counsel notification to originating component. Upon receipt of 
a demand and its accompanying affidavit or statement, the Chief Counsel 
shall immediately advise the originating component.
    (f) Conditions for authorization of disclosure. The Chief Counsel, 
subject to the terms of paragraph (h) of this section, may authorize 
the disclosure of Customs documents or the appearance and testimony of 
a Customs employee if:
    (1) The demanded documents or testimony, in the judgment of the 
Chief Counsel, are appropriate under the factors specified in 
Sec. 103.23(a) of this subpart; and
    (2) None of the factors specified in Sec. 103.23(b) of this subpart 
exist with respect to the demanded documents or testimony.
    (g) Limitations on the scope of authorized disclosure. The Chief 
Counsel shall, following any necessary consultation with the 
originating component, authorize the disclosure of Customs information 
by a Customs employee without further authorization from Customs 
officials whenever possible: Provided, that, when the information 
demanded relates to that collected, assembled, or prepared in 
connection with litigation or an investigation supervised by a Customs 
Office, Chief Counsel, prior to authorizing such disclosure, seeks to 
limit the demand to that which would be consistent with the factors 
specified in Sec. 103.23 of this subpart. The Chief Counsel shall seek 
to limit the demand through negotiation with appropriate authority.
    (h) Disclosure of commercial information. In the case of a demand 
for commercial information or commercial documents concerning 
importations or exportations, the Chief Counsel or his/her designee 
shall obtain the authorization of the Assistant Commissioner 
(Commercial Operations) or his/her designee prior to the Chief Counsel 
authorizing the production/disclosure of such documents/information.


Sec. 103.23   Factors in determining whether to disclose information 
pursuant to a demand.

    (a) General considerations. In authorizing disclosures pursuant to 
a demand, the Chief Counsel should consider the following factors:
    (1) Whether the requesting party has demonstrated that the 
information requested is--
    (i) Relevant and material to the action pending, based on copies of 
the summons and complaint that are required to be attached to the 
subpoena duces tecum or other demand;
    (ii) Genuinely necessary to the proceeding, i.e., a showing of 
substantial need has been made;
    (iii) Unavailable from other sources; and,
    (iv) Reasonable in its scope, i.e., the documents, information, or 
testimony sought are described with particularity.
    (2) Whether such disclosure is appropriate under the rules of 
procedure governing the case or matter in which the demand arose; and
    (3) Whether disclosure or testimony is appropriate under the 
relevant substantive law concerning privilege.
    (b) Circumstances where disclosure will not be made. Among the 
demands in response to which disclosure will not be authorized by the 
Chief Counsel are those demands with respect to which any of the 
following factors exist:
    (1) Disclosure would violate a treaty, statute (such as the Privacy 
Act, 5 U.S.C. 552a, or the income tax laws, 26 U.S.C. 6103 and 7213), 
or a rule of procedure, such as the grand jury secrecy rule, Fed. R. 
Crim. Proc. rule 6(e) (18 U.S.C. App.);
    (2) Disclosure would violate a specific regulation;
    (3) Disclosure would reveal classified or confidential information;
    (4) Disclosure would reveal a confidential source or informant;
    (5) Disclosure would reveal investigatory records compiled for law 
enforcement purposes, interfere with enforcement proceedings, or 
disclose investigative techniques and procedures;
    (6) Disclosure would improperly reveal trade secrets without the 
owner's consent;
    (7) Disclosure relates to documents which were produced by another 
agency or entity;
    (8) Disclosure would unduly interfere with the orderly conduct of 
Customs business; or
    (9) Customs has no interest, records, or other official information 
regarding the matter in which disclosure is sought.


Sec. 103.24   Procedure in the event a decision concerning a demand is 
not made prior to the time a response to the demand is required.

    If response to a demand is required before the instructions from 
the Chief Counsel are received, the U.S. Attorney, his/her assistant, 
or other appropriate legal representative shall be requested to appear 
with the Customs employee upon whom the demand has been made. The U.S. 
Attorney, his/her assistant, or other appropriate legal representative 
shall furnish the court or other authority with a copy of the 
regulations contained in this subpart, inform the court or other 
authority that the demand has been or is being, as the case may be, 
referred for the prompt consideration of the Chief Counsel, and shall 
respectfully request the court or authority to stay the demand pending 
receipt of the requested instructions.


Sec. 103.25  Procedure in the event of an adverse ruling.

    If the court or other authority declines to stay the effect of the 
demand in response to a request made in accordance with Sec. 103.22 of 
this chapter pending receipt of instructions, or if the court or other 
authority rules that the demand must be complied with irrespective of 
instructions rendered in accordance with Secs. 103.22, 103.23, 103.26, 
and 103.27 of this subpart not to produce the documents or disclose the 
information sought, the Customs employee upon whom the demand has been 
made shall, pursuant to this subpart, respectfully decline to comply 
with the demand. See, United States ex rel. Touhy v. Ragen, 340 U.S. 
462 (1951).


Sec. 103.26   Procedure in the event of a demand for Customs 
information in a state or local criminal proceeding.

    Customs Regional Commissioners, special agents in charge, and 
chiefs of field laboratories may, in the interest of federal, state, 
and local law enforcement, upon receipt of demands of state or local 
authorities, and at the expense of the state, authorize employees under 
their supervision to attend trials and administrative hearings on 
behalf of the government in any state or local criminal case, to 
produce records, and to testify as to facts coming to their knowledge 
in their official capacities. However, in cases where a defendant in a 
state or local criminal case demands testimony or the production of 
customs documents or information, authorization from the Chief Counsel 
or his/her designees is required as under Sec. 103.22 of this subpart. 
No disclosure of information under this section shall be made if any of 
the factors listed in Sec. 103.23(b) of this subpart are present.


Sec. 103.27   Procedure in the event of a demand for Customs 
information in a foreign proceeding where Customs is not a party.

    (a) Required prior approval for disclosure. In any foreign 
proceeding in which the Customs Service is not a party, no Customs 
employee shall, in response to a demand, furnish Customs documents or 
testimony as to any material contained in Customs files, any 
information relating to or based upon material contained in Customs 
files, or any information or material acquired as part of the 
performance of that person's official duties (or because of that 
person's official status) without the prior approval of the Office of 
the Chief Counsel, as described in paragraph (b) of this section.
    (b) Employee notification to Counsel. Whenever a demand in a 
foreign proceeding is made upon a Customs employee concerning pre-
clearance activities within the territory of the foreign country, that 
party shall immediately notify the Regional or District Counsel for the 
region or district having jurisdiction over the pre-clearance location. 
All other demands in a foreign proceeding shall be reported by Customs 
employees to the Office of the Chief Counsel at Headquarters. The party 
shall await instructions from either the Regional/District Counsel or 
the Office of Chief Counsel, or their designees, concerning the 
appropriate response to the demand.
    (c) Counsel notification to originating component. Upon receipt of 
a demand, the Chief Counsel shall immediately acknowledge its receipt 
to the originating component.
    (d) Conditions for authorization of disclosure. The Chief Counsel, 
subject to the terms of paragraph (e) of this section, may authorize 
the disclosure of Customs documents or the appearance and testimony of 
a Customs employee if:
    (1) There is no objection after inquiry of the originating 
component;
    (2) The disclosure, in the judgment of the Chief Counsel, is 
appropriate under the factors specified in Sec. 103.23(a) of this 
subpart; and
    (3) The disclosure, in the judgment of the Chief Counsel, is 
consistent with the factors specified in Sec. 103.23(b) of this 
subpart.
    (e) Limitations on the scope of authorized disclosure. The Chief 
Counsel shall, following any necessary consultation with the 
originating component, authorize the disclosure of Customs information 
by a Customs employee without further authorization from Customs 
officials whenever possible: Provided, that, when the information 
demanded relates to that collected, assembled, or prepared in 
connection with litigation or an investigation supervised by a Customs 
Office, Chief Counsel, prior to authorizing such disclosure, seeks to 
limit the demand to that which would be consistent with the factors 
specified in Sec. 103.23 of this subpart. The Chief Counsel shall seek 
to limit the demand through negotiation with appropriate authority.
George J. Weise,
Commissioner of Customs.
    Approved: August 12, 1994.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 94-21774 Filed 9-2-94; 8:45 am]
BILLING CODE 4820-02-P