[Federal Register Volume 61, Number 91 (Thursday, May 9, 1996)]
[Notices]
[Pages 21203-21207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11520]



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INTERNATIONAL TRADE COMMISSION


Investigations Relating to Potential Breaches of Administrative 
Protective Orders, Sanctions Imposed for Actual Violations

AGENCY: U.S. International Trade Commission.

ACTION: Summary of Commission practice relating to administrative 
protective orders.

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SUMMARY: This notice provides a summary by the International Trade 
Commission (Commission) of its investigations of (1) breaches of 
administrative protective orders (APOs) issued in connection with 
investigations under Title VII, and (2) certain violations of the 
Commission's rules.
    This notice is intended to inform the public of the Commission's 
experience with APO breaches. The Commission also intends that this 
notice will educate and alert representatives of parties to Commission 
proceedings as to some specific types of APO breaches encountered by 
the Commission. This notice is illustrative only and does not limit the 
Commission's rules or

[[Page 21204]]

standard APO. The notice does not provide an exclusive list of conduct 
that will be deemed to be a breach of the Commission's APOs, and does 
not indicate how the Commission will rule in future cases.

FOR FURTHER INFORMATION CONTACT: Cynthia P. Johnson, Esq., Office of 
the General Counsel, U.S. International Trade Commission, telephone 
202-205-3098.

SUPPLEMENTARY INFORMATION: The discussion below illustrates APO breach 
investigations that the Commission has completed including a 
description of actions taken in response to breaches. The discussion 
covers breach investigations completed during 1995 with respect to 
antidumping and countervailing duty cases. Also discussed are the 
Commission's investigations completed during 1995 of possible 
violations of Commission rule 207.3, commonly known as the ``24-hour 
rule.''
    The Commission periodically reports a summary of its actions in 
response to violations of Commission APOs in an effort to educate those 
obtaining access to business proprietary information (BPI) under an APO 
of the common problems encountered in handling BPI and confidential 
business information (CBI). This is the sixth notice of its kind, the 
previous ones having been published at 56 Fed. Reg. 4846 (Feb. 6, 
1991), 57 Fed. Reg. 12335 (Apr. 9, 1992), 58 Fed. Reg. 21991 (Apr. 26, 
1993), 59 Fed. Reg. 16834 (Apr. 8, 1994), and 60 Fed. Reg. 24880 (May 
10, 1995). The Commission intends to publish summaries at least 
annually, and more frequently as appropriate.
    As part of the effort to educate practitioners about APO practice, 
the Commission's Secretary issued in September 1991 An Introduction to 
Administrative Protective Order Practice in Antidumping and 
Countervailing Duty Investigations. A revision to the handbook is 
currently pending and is expected to be issued shortly. This document 
is available upon request from the Office of the Secretary, U.S. 
International Trade Commission, 500 E Street, SW, Washington, DC 20436, 
telephone 202-205-2000.

I. Title VII Administrative Protective Orders

A. In General

    APOs are issued in Commission investigations under Title VII of the 
Tariff Act of 1930 to provide certain party representatives access to 
BPI under conditions designed to protect the confidentiality of such 
information. The Commission is required to disclose under APO BPI 
collected by the Commission to authorized representatives of interested 
parties who are parties to such investigations. 19 U.S.C. 1677f. The 
Commission has implemented procedures governing this disclosure, which 
is accomplished under an APO issued by the Secretary to the Commission. 
19 C.F.R. Sec. 207.7. An important provision of the Commission's rules 
relating to APOs is the ``24-hour rule'' that provides parties with an 
extra day in which to file the public version of certain submissions 
containing BPI. 19 C.F.R. Sec. 207.3. The 24-hour rule, which permits 
correction of the bracketing of BPI during that extra day, was intended 
to reduce the incidence of APO breaches caused by inadequate bracketing 
and improper placement of BPI. The Commission urges parties to make use 
of the rule.
    The Commission Secretary provides BPI only to ``authorized 
applicants'' who agree to be bound by the terms and conditions of an 
APO. The Commission has revised its standard APO forms for antidumping 
and countervailing duty investigations to reflect recent regulatory 
changes and Commission practice. The Commission has also created a new 
APO form for use in section 201 investigations. The standard APO form 
for antidumping and countervailing duty investigations issued by the 
Commission in 1995 required the applicant to swear that he or she 
would:
    (1) Not divulge any of the BPI obtained under the APO and not 
otherwise available to him, to any person other than
    (i) Personnel of the Commission concerned with the investigation,
    (ii) The person or agency from whom the BPI was obtained,
    (iii) A person whose application for disclosure of BPI under the 
APO has been granted by the Secretary, and
    (iv) Other persons, such as paralegals and clerical staff, who (a) 
are employed or supervised by and under the direction and control of 
the authorized applicant or another authorized applicant in the same 
firm whose application has been granted; (b) have a need thereof in 
connection with the investigation; (c) are not involved in competitive 
decisionmaking for an interested party which is a party to the 
investigation; and (d) have submitted to the Secretary a signed 
Acknowledgment for Clerical Personnel (the authorized applicant shall 
also sign such acknowledgment and will be deemed responsible for such 
persons' compliance with the APO);
    (2) Use such BPI solely for the purposes of the above-captioned 
Commission investigation or for judicial or binational panel review of 
such Commission investigation;
    (3) Not consult with any person not described in paragraph (1) 
concerning BPI disclosed under the APO without first having received 
the written consent of the Secretary and the party or the attorney of 
the party from whom such BPI was obtained;
    (4) Whenever materials (e.g., documents, computer disks, etc.) 
containing such BPI are not being used, store such material in a locked 
file cabinet, vault, safe, or other suitable container (N.B.: storage 
of BPI on so-called hard disk computer media is to be avoided, because 
mere erasure of data from such media may not irrecoverably destroy the 
BPI and may result in violation of paragraph C of the APO);
    (5) Serve all materials containing BPI disclosed under the APO as 
directed by the Secretary and pursuant to section 207.7(f) of the 
Commission's rules;
    (6) Transmit each document containing BPI disclosed under the APO:
    (i) with a cover sheet identifying the document as containing BPI,
    (ii) with all BPI enclosed in brackets and each page warning that 
the document contains BPI,
    (iii) if the document is to be filed by a deadline, with each page 
marked ``Bracketing of BPI not final for one business day after date of 
filing,'' and
    (iv) if by mail, within two envelopes, the inner one sealed and 
marked ``Business Proprietary Information-- To be opened only by [name 
of recipient]'', and the outer one sealed and not marked as containing 
BPI;
    (7) Comply with the provisions of the APO and section 207.7 of the 
Commission's rules;
    (8) Make true and accurate representations in the authorized 
applicant's application and promptly notify the Secretary of any 
changes that occur after the submission of the application and that 
affect the representations made in the application (e.g., change in 
personnel assigned to the investigation);
    (9) Report promptly and confirm in writing to the Secretary any 
possible breach of the APO; and
    (10) Acknowledge that breach of the APO may subject the authorized 
applicant and other persons to such sanctions as the Commission deems 
appropriate, including the administrative sanctions set out in the APO. 
Breach of the protective order may subject an applicant to:
    (1) Disbarment from practice in any capacity before the Commission 
along

[[Page 21205]]

with such person's partners, associates, employer, and employees, for 
up to seven years following publication of a determination that the 
order has been breached;
    (2) Referral to the United States Attorney;
    (3) In the case of an attorney, accountant, or other professional, 
referral to the ethics panel of the appropriate professional 
association; and
    (4) Such other administrative sanctions as the Commission 
determines to be appropriate, including public release of or striking 
from the record any information or briefs submitted by, or on behalf 
of, the offender or the party represented by the offender, and denial 
of further access to business proprietary information in the current or 
any future investigations before the Commission. In addition, the 
Commission may take actions other than sanctions, such as the issuance 
of letters of warning.
    Commission employees are not signatories to the Commission's APOs 
and do not obtain access to BPI through the APO procedure. 
Consequently, they are not subject to the APOs' requirements with 
respect to the handling of BPI. However, Commission employees are 
subject to strict statutory and regulatory constraints concerning BPI, 
and face potentially severe penalties for noncompliance. See 18 U.S.C. 
Sec. 1905; Title 5, U.S. Code; and Commission personnel policies 
implementing the statutes. Although the Privacy Act (5 U.S.C. 
Sec. 552a) limits the Commission's authority to disclose any personnel 
action against agency employees, this should not lead the public to 
conclude that no such actions have been taken.

B. Investigations of Alleged APO Breaches

    In an antidumping or countervailing duty investigation, the 
investigation of an alleged APO breach generally proceeds as follows. 
The Secretary, acting under delegated authority, issues to the alleged 
breacher a letter of inquiry to ascertain the alleged breacher's views 
on whether a breach has occurred. If, based on the response made to 
such a letter of inquiry, the Commission determines that a breach has 
occurred, the Commission often issues a second letter asking the 
breacher to address the questions of mitigating circumstances and 
possible sanctions or other actions. The Commission then determines 
what action to take in response to the breach. However, in some cases, 
the Commission has determined that although a breach has occurred 
sanctions are not warranted, and therefore has found it unnecessary to 
issue a second letter concerning what sanctions might be appropriate. 
The Commission retains sole authority to make final determinations 
regarding the existence of a breach and the appropriate action to be 
taken if a breach has occurred.
    The records of Commission investigations of alleged APO breaches in 
antidumping and countervailing duty cases are not publicly available 
and are exempt from disclosure under the Freedom of Information Act, 5 
U.S.C. Sec. 552. Section 135(b) of the Customs and Trade Act of 1990, 
19 U.S.C. Sec. 1677f(g).
    The breach most frequently investigated by the Commission involves 
the APO's prohibition on the dissemination of BPI to unauthorized 
persons. Such dissemination usually occurs as the result of failure to 
delete BPI from public versions of documents filed with the Commission 
or of transmission of proprietary versions of documents to unauthorized 
recipients. Other breaches have involved: the failure to properly 
bracket BPI in proprietary documents filed with the Commission; the 
failure to immediately report known violations of an APO; and the 
failure to adequately supervise non-legal personnel in the handling of 
BPI in certain circumstances.
    Sanctions for APO violations serve two basic interests: (a) 
preserving the confidence of submitters of BPI in the Commission as a 
reliable protector of BPI, and (b) disciplining breachers and deterring 
future violations. As the Conference Report to the Omnibus Trade and 
Competitiveness Act of 1988 observed, ``the effective enforcement of 
limited disclosure under administrative protective order depends in 
part on the extent to which private parties have confidence that there 
are effective sanctions against violation.'' H.R. Conf. Rep. No. 576, 
100th Cong., 1st Sess. 623 (1988).
    The Commission has worked to develop consistent jurisprudence, not 
only in determining whether a breach has occurred, but also in 
selecting an appropriate response. In determining the appropriate 
response, the Commission generally considers mitigating factors such as 
whether the breach was unintentional, lack of prior breaches committed 
by the breaching party, the corrective measures taken by the breaching 
party, the promptness with which the breaching party reported the 
violation to the Commission, and any relevant circumstances peculiar to 
the situation. The Commission also considers aggravating circumstances, 
especially whether persons not under the APO actually read the BPI.
    We note that Commission rules permit economists or consultants to 
obtain access to BPI under the APO under the direction and control of 
an attorney under the APO, or upon their own responsibility if the 
economist or consultant appears regularly before the Commission and 
represents an interested party who is a party to the investigation. See 
19 C.F.R. Secs. 207.7(a)(3) (B) and (C). We caution that economists or 
consultants who obtain access to BPI under the APO under the direction 
and control of an attorney nonetheless remain individually responsible 
for complying with the APO. In appropriate circumstances, for example, 
an economist under the direction and control of an attorney may be held 
responsible for a breach of the APO by failing to redact APO 
information from a document that is subsequently filed with the 
Commission and served as a public document. This is so even though the 
attorney exercising direction or control over the economist or 
consultant may also be held responsible for the breach of the APO.

C. Specific Investigations in Which Breaches Were Found

    The following case studies are presented to educate users about the 
types of APO breaches found by the Commission and the sanctions imposed 
and other actions taken by the Commission. In addition, the case 
studies discuss the factors considered by the Commission as mitigating 
the sanctions imposed in particular instances. The Commission has not 
included some of the specific facts in the descriptions of 
investigations where disclosure could reveal the identity of a 
particular breacher. Thus, in some cases, apparent inconsistencies in 
the facts set forth in this notice result from the Commission's 
inability to disclose particular facts more fully.
    Case 1: Several economic consultants misdelivered materials 
containing BPI to persons who were not signatories to the APO. The 
materials were returned unopened. The Commission found that a breach 
had occurred, but determined not to sanction the economists. Instead, 
the Commission issued a warning letter to the economist who instructed 
another to compile and distribute the materials, and to the person who 
actually prepared the materials. A third person, who became involved 
only after the misdeliveries were discovered, was not found to have 
breached the APO. Mitigating factors included the fact the breach was 
unintentional, the persons involved had not been previously found to 
have breached an APO, that the

[[Page 21206]]

persons involved took immediate action to remedy it by retrieving all 
copies, that the Commission was immediately informed of the incident, 
and that the firm in question made changes in-house to prevent a 
recurrence.
    Case 2: Counsel for a party to the investigation failed to bracket 
certain BPI in the confidential version of an attachment to a 
submission and also failed to redact BPI data from the public version 
of the submission. The attachment, prepared by an outside consultant 
who was a signatory to the APO, contained unbracketed proprietary data 
in the confidential version and unredacted BPI in the public version of 
the brief. Upon learning of the error, counsel notified the Secretary's 
office, and arranged for the persons receiving the unbracketed BPI to 
either destroy or return the documents in question. All copies of the 
defective briefs were either returned or destroyed. The Commission 
found the person who was responsible for preparation of the final 
document to have breached the APO. The Commission determined not to 
sanction the attorney, but rather sent a warning letter. Mitigating 
factors included the fact that the breach was inadvertent, the person 
involved had not been associated with any other APO breach inquiry, and 
actions were taken immediately to mitigate any harm resulting from the 
breach. Moreover, the version of the brief involved containing the BPI 
had not been reviewed by anyone not on the administrative protective 
order. The consultant was found not to have breached the APO because it 
was not the consultant's responsibility to prepare the public version 
of the document. Similarly, a colleague of the attorney was found not 
to have been involved in the preparation of the public version of the 
document, and therefore was not found responsible for the breach.
    Case 3: Several economic consultants filed and served a public 
version of a document that contained BPI in a footnote in the document. 
Commission staff discovered the breach. Although the public version of 
the document had been placed in the Commission public files, it had not 
been reviewed by a member of the public before discovery of the breach. 
The Commission determined that a breach had occurred, and held the 
individuals responsible for preparing the public version of the 
submission and reviewing it for BPI responsible for the breach. The 
Commission did not sanction the individuals, however, but instead sent 
warning letters. Mitigating factors included the fact that the breach 
was inadvertent, none of the individuals charged with the breach had 
breached an APO previously, and the individuals took immediate actions 
to mitigate any harm arising from the breach in the investigation, once 
they were informed that it had occurred. The Commission also considered 
the fact that although the information was received by a person not on 
the APO, the recipient did not review the information, and it was 
returned unread. The clerk who prepared the document was not held 
responsible for the breach, since the individual's activities appeared 
to be clerical in nature, and did not appear to involve reviewing the 
document to ensure that all BPI had been deleted. Additionally, a 
consultant whose name appeared on the document was not held responsible 
for the breach since the individual was not involved in preparing the 
public version of the document or in reviewing the document for BPI.
    Case 4: An attorney failed to update the APO service list and as a 
result, improperly served copies of the confidential version of a 
submission on persons no longer subject to the APO. The Commission 
determined that the person responsible for improperly serving the APO 
version of the submission had breached the APO. The Commission decided 
not to sanction the attorney, but instead sent a warning letter. 
Mitigating factors included the fact that the breach was inadvertent, 
that the individual responsible for the breach had not previously 
breached an APO, and that immediate action was taken to mitigate any 
harm arising from the breach. Finally, although the document containing 
BPI was received by non-APO signatories, the Commission investigation 
revealed that the document was not actually viewed by anyone not on the 
APO. Two other attorneys who were involved in the Commission 
investigation were found not to be responsible for the breach.
    Case 5: An attorney filed and served a public version of a document 
in which the attorney failed to properly redact information in 
brackets. The Commission determined that the attorney had breached the 
protective order. The Commission did not sanction the attorney, but 
instead issued a warning letter. Mitigating circumstances included the 
fact that the breach was inadvertent, the individual had not previously 
breached an APO, and the individual discovered the breach and took 
immediate actions to mitigate any harm arising from the breach. 
Additionally, the document was not actually reviewed by anyone not on 
the APO.
    Case 6: Counsel filed a public version of a document and 
inadvertently filed with the Commission the master copy of the public 
version consisting of confidential pages with removable (and not always 
opaque) redaction tape covering the BPI. Commission staff discovered 
the defect in the filing and notified counsel prior to placement of the 
document in the public file. The Commission found an attorney and legal 
secretary responsible for the breach. The Commission determined to hold 
the legal secretary responsible for the breach because that individual 
was directly responsible for placing the copies of the public version 
of the documents into the envelopes that were delivered to the 
Commission. The Commission did not sanction the secretary, but instead 
issued a warning letter. In deciding not to sanction the secretary, the 
Commission took into account the fact that the breach was inadvertent, 
no BPI was disclosed to any party not under an APO, and it was the 
individual's first breach. The Commission also determined that the 
attorney responsible for overall supervision of the non-attorney staff, 
and who signed the public version of the brief that was filed, had 
breached the APO. The Commission sent a private letter of reprimand to 
the attorney because it was the individual's second breach of an APO in 
a relatively short period of time. A colleague was found not to have 
breached the APO since the individual was not in the office the day 
that the breach occurred.
    Case 7: Counsel for a party to the investigation filed and served a 
public version of a document in which counsel failed to properly 
bracket and redact BPI that appeared in a footnote. Upon learning of 
the error, counsel immediately arranged for the individuals under the 
APO receiving the unbracketed BPI to delete the information before 
forwarding the document to any person not on the APO. Counsel also 
notified the Commission and filed replacement pages correcting the 
error. The Commission determined that a breach had occurred and held 
the individuals responsible for preparation and review of the document 
for confidential information responsible for the breach. The Commission 
did not sanction the individuals, but instead issued warning letters. 
Mitigating factors included the fact that the breach was inadvertent, 
the individuals had not previously breached an APO, and immediate 
actions were taken to mitigate any harm arising from the breach. 
Further, the version of the

[[Page 21207]]

document containing the BPI was not viewed by anyone not on the APO.

D. Investigations Involving the ``24-hour Rule''

    During 1995, the Commission completed five investigations of 
apparent violations of the 24-hour rule, set forth in 19 C.F.R. 
Sec. 207.3. All of these apparent violations of the Commission's rules 
involved changes to a document other than bracketing and deletion of 
BPI. The rule specifically states that changes other than bracketing 
and deletion of BPI are not permitted. Practitioners should be aware 
that there is no express provision in the Commission rules that allows 
a party to make corrections, other than bracketing corrections, to a 
submission. If a party wishes to make changes to a document other than 
bracketing, such as typographical changes or other corrections, it must 
ask for an extension of time to file an amended document pursuant to 
rule 201.14(b)(2).
    Case 1: Counsel filed a letter with the Commission enclosing 
replacement pages for the confidential version of their submission and 
noting numerous typographical errors in their submission. Counsel added 
the changes to the public version of their submission during the 24-
hour period allowed to correct bracketing. Only one of the changes 
involved bracketing or deletion of business proprietary information. 
Counsel did not request leave of the Commission to make the non-
bracketing changes. The Commission determined that the 24-hour rule had 
been violated. Counsel was not sanctioned, but instead all of the 
signatories on the document were issued warning letters. The Commission 
considered the fact that counsel notified the Commission of the changes 
in their cover letter and replacement page; the changes were relatively 
minor; and the attorneys involved had no previous record of violations 
of the 24-hour rule.
    Case 2: Counsel filed a public version of a document which 
contained numerous changes to the wording in an exhibit from the 
confidential version filed the previous day. Counsel explained that the 
reason for the change was that a prior electronic draft of the document 
was inadvertently used to prepare the public version. The Commission 
determined not to sanction counsel, but instead issued warning letters 
to lead counsel and the person who transmitted the corrected pages. In 
deciding to issue a warning instead of a sanction, the Commission 
considered the fact that the changes were relatively minor, technical 
in nature and seemingly inadvertent.
    Case 3: Counsel for a party in an investigation filed a public 
version of the brief during the 24-hour period. Due to the number of 
bracketing changes, counsel refiled an entire confidential brief rather 
than replacement pages. In addition to changing brackets, counsel 
included a table of contents, which was not filed with the original 
confidential brief. Counsel's letter of transmittal made no mention of 
the change, nor did counsel seek permission to file the table of 
contents. The Commission found that the 24-hour rule had been violated. 
The Commission did not sanction counsel, but instead issued a warning 
letter. The Commission considered the fact that the addition of a table 
of contents to counsel's submission was only a minor change, which was 
technical in nature and seemingly inadvertent, and neither added new 
information nor altered the substance of the information provided. 
Counsel was reminded, however, that the 24-hour rule cannot be used to 
cure defects in original filings.
    Case 4: Counsel for a party to the investigation filed a public 
version of a brief during the 24-hour period which contained additional 
words. Counsel also filed replacement pages for the confidential 
version of the document which contained the same changes. While counsel 
did point out the change in its cover letter, counsel did not seek 
leave of the Commission to make the change. The Commission determined 
that counsel had violated the 24-hour rule. The Commission issued a 
warning letter to the attorney who signed the cover letter and who 
admitted responsibility for the preparation of the letter and changes 
to the document. In determining not to sanction the individual, the 
Commission considered the fact that the change was only a minor 
technical correction which did not add any new information or alter the 
substance of the information provided. Additionally, the Commission 
considered the fact that counsel, in its letter, notified the 
Commission of the change and its location, and therefore it did not 
appear that counsel was attempting to circumvent rule 207.3(c).
    Case 5: Counsel for a party in the investigation filed an errata 
sheet in response to a Commission ruling regarding BPI, attempting to 
delete a word and replace it with a phrase. The submission was rejected 
for filing by the Secretary and was stricken from the record. The 
Commission determined that the 24-hour rule was violated but that no 
further action was necessary.

    Issued: May 1, 1996.

    By order of the Commission.
Donna R. Koehnke,
Secretary.
[FR Doc. 96-11520 Filed 5-8-96; 8:45 am]
BILLING CODE 7020-02-P