[Federal Register Volume 61, Number 181 (Tuesday, September 17, 1996)]
[Proposed Rules]
[Pages 48855-48862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23727]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 61, No. 181 / Tuesday, September 17, 1996 / 
Proposed Rules  

[[Page 48855]]



OFFICE OF MANAGEMENT AND BUDGET

5 CFR Part 1312

RIN 0348-AB34


Classification, Downgrading, Declassification and Safeguarding of 
National Security Information

AGENCY: Office of Management and Budget, Executive Office of the 
President.

ACTION: Notice of proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Management and Budget (OMB) seeks public comment 
on a proposed rule that would set forth the procedures to be followed 
by OMB staff regarding the classification, downgrading, 
declassification and safeguarding of national security information. In 
addition, this information lists OMB staff who are authorized to 
originally classify information at the top secret and secret level. 
These regulations also contain guidance on the procedures to be used by 
OMB when other government agencies and the public request that 
classified information in OMB files be reviewed for possible 
declassification and release. If such information may not be released 
these procedures also provide guidance on how to appeal such an action.

DATES: Comments must be received no later than November 18, 1996.

ADDRESSES: Comments on the proposed rule should be addressed to: 
Darrell A. Johnson, Deputy Assistant Director for Administration, 
Office of Management and Budget, Room 9026, New Executive Office 
Building, Washington, D.C. 20503. Comments up to three pages in length 
may be submitted via facsimile to (202) 395-3504. Electronic mail 
comments may be submitted via Internet to [email protected]. Please 
include the full body of electronic mail comments in the text and not 
as an attachment. Please include the name, title, organization, postal 
address, and E-mail address in the text of the message.

FOR FURTHER INFORMATION CONTACT: Darrell A. Johnson, Deputy Assistant 
Director for Administration, Office of Management and Budget, at (202) 
395-5715.

SUPPLEMENTARY INFORMATION: OMB is revising its regulations concerning 
the classification, downgrading, declassification and safeguarding of 
national security information. This revision is necessary to ensure 
conformity with guidelines in Executive Order 12958, April 20, 1995 and 
its implementing directives. The Office of Management and Budget is 
repealing its existing Part 1312 and replacing it with the new Part 
1312.

Regulatory Flexibility Act, Unfunded Mandates Reform Act, and Executive 
Orders 12866 and 12875

    For purposes of the Regulatory Flexibility Act (5 U.S.C. Sec. 601 
et seq.), the proposed rule will not, if promulgated, have a 
significant economic effect on a substantial number of small entities; 
the proposed rule addresses only the procedures to be followed in the 
production or disclosure of OMB materials and information in 
litigation. For purposes of the Unfunded Mandates Reform Act of 1995 
(P.L. 104-4), as well as Executive Orders No. 12866 and 12875, the 
proposed rule would not significantly or uniquely affect small 
governments, and would not result in increased expenditures by State, 
local, and tribal governments, or by the private sector, of $100 
million or more.

    Issued in Washington, D.C., September 11, 1996.
Jacob J. Lew,
Acting Director.

    For the reasons set forth in the preamble, OMB proposes to amend 5 
CFR Chapter III by revising Part 1312 to read as follows:

PART 1312--CLASSIFICATION, DOWNGRADING, DECLASSIFICATION AND 
SAFEGUARDING OF NATIONAL SECURITY INFORMATION

Subpart A--Classification and Declassification of National Security 
Information

Sec.
1312.1  Purpose and authority.
1312.2  Responsibilities.
1312.3  Classification requirements.
1312.4  Classified designations.
1312.5  Authority to classify
1312.6  Duration of classification.
1312.7  Derivative classification.
1312.8  Standard identification and markings.
1312.9  Downgrading and declassification.
1312.10  Systematic review guidelines.
1312.11  Challenges to classifications.
1312.12  Security Program Review Committee.

Subpart B--Control and Accountability of Classified Information

1312.21  Purpose and authority.
1312.22  Responsibilities.
1312.23  Access to classified information.
1312.24  Access by historical researchers and former Presidential 
appointees.
1312.25  Storage.
1312.26  Control of secret and confidential material.
1312.27  Top secret control.
1312.28  Transmission of classified material.
1312.29  Destruction.
1312.30  Loss or possible compromise.
1312.31  Security violations.

Subpart C--Mandatory Declassification Review

1312.32  Purpose and authority.
1312.33  Responsibility.
1312.34  Information in the custody of OMB.
1312.35  Information classified by another agency.
1312.36  Appeal procedure.
1312.37  Fees.

    Authority: Executive Order 12958, 60 FR 19825, 3 CFR, 1995 
Comp., p. 333.

Subpart A--Classification and Declassification of National Security 
Information


Sec. 1312.1  Purpose and authority.

    This subpart sets forth the procedures for the classification and 
declassification of national security information in the possession of 
the Office of Management and Budget. It is issued under the authority 
of Executive Order 12958, April 20, 1995, Information Security 
Oversight Office Directive No 1, (60 FR 53492, October 13, 1995), and 
is applicable to all OMB employees.


Sec. 1312.2  Responsibilities.

    The effectiveness of the classification and declassification 
program in OMB depends entirely on the amount of attention paid to it 
by supervisors and their staffs in those offices and divisions that 
possess or produce classified material. Officials who originate 
classified information are responsible

[[Page 48856]]

for proper assignment of a classification to that material and for the 
decision as to its declassification. Officials who produce documents 
containing classified information must determine the source of the 
classification for that information and must ensure that the proper 
identity of that source is shown on the document. Custodians of 
classified material are responsible for its safekeeping and for 
ensuring that such material is adequately marked as to current 
classification. Custodians are also responsible for the control of and 
accounting for all classified material within their area of 
jurisdiction as prescribed in OMB Manual Section 1030.
    (a) EOP Security Officer. In cooperation with the Associate 
Director for Administration, the EOP Security Officer supervises the 
administration of this section and develops programs to assist in the 
compliance with the Order. Specifically, he:
    (1) Promotes the correct understanding of this section by all 
employees by providing annual security refresher briefings and ensures 
that new employees attend initial briefings about overall security 
procedures and policies.
    (2) Issues and keeps current such classification guides and 
guidelines for review for declassification as are required by the 
Order.
    (3) Conducts periodic reviews of classified documents produced and 
provides assistance and guidance where necessary.
    (4) Maintains and publishes a current listing of all officials who 
have been designated in writing to have Top Secret, Secret, and 
Confidential original classification authority.
    (b) Heads of divisions or offices. The head of each division or 
major organizational unit is responsible for the administration of this 
section within his or her area. Appropriate internal guidance should be 
issued to cover special or unusual conditions within an office.


Sec. 1312.3  Classification requirements.

    United States citizens must be kept informed about the activities 
of their Government. However, in the interest of national security, 
certain official information must be subject to constraints on its 
dissemination or release. This information is classified in order to 
provide that protection.
    (a) Information shall be considered for classification if it 
concerns:
    (1) military plans, weapons systems, or operations;
    (2) foreign government information;
    (3) intelligence activities (including special activities), 
intelligence sources or methods, or cryptology;
    (4) foreign relations or foreign activities of the United States, 
including confidential sources;
    (5) scientific, technological, or economic matters relating to the 
national security;
    (6) United States Government programs for safeguarding nuclear 
materials or facilities; or
    (7) vulnerabilities or capabilities of systems, installations, 
projects or plans relating to the national security.
    (b) When information is determined to meet one or more of the 
criteria in paragraph (a) of this section, it shall be classified by an 
original classification authority when he/she determines that its 
unauthorized disclosure reasonably could be expected to cause at least 
identifiable damage to the national security.
    (c) Unauthorized disclosure of foreign government information, 
including the identity of a confidential foreign source of intelligence 
sources or methods, is presumed to cause damage to the national 
security.
    (d) Information classified in accordance with this section shall 
not be declassified automatically as a result of any unofficial or 
inadvertent or unauthorized disclosure in the United States or abroad 
of identical or similar information.


Sec. 1312.4  Classified designations.

    (a) Except as provided by the Atomic Energy Act of 1954, as 
amended, or the National Security Act of 1947, as amended, the 
Executive Order 12958 provides the only basis for classifying 
information. Information which meets the test for classification may be 
classified in one of the following three designations:
    (1) Top Secret. This classification shall be applied only to 
information the unauthorized disclosure of which reasonably could be 
expected to cause exceptionally grave damage to the national security 
that the original classification authority is able to identify or 
describe.
    (2) Secret. This classification shall be applied only to 
information the unauthorized disclosure of which reasonably could be 
expected to cause serious damage to the national security that the 
original classification authority is able to identify or describe.
    (3) Confidential. This classification shall be applied only to 
information the unauthorized disclosure of which reasonably could be 
expected to cause damage to the national security that the original 
classification authority is able to identify or describe.
    (b) If there is significant doubt about the need to classify 
information it shall not be classified. If there is significant doubt 
about the appropriate level of classification it shall be classified at 
the lower level.


Sec. 1312.5  Authority to classify.

    (a) The authority to originally classify information or material 
under these regulations shall be limited to those officials concerned 
with matters of national security. The officials listed below are 
granted authority by the Director, OMB, to assign original 
classifications as indicated to information or material that is 
originated by OMB staff and relating to the national security of the 
United States:
    (1) Top Secret and below:
    (i) Deputy Director.
    (ii) Deputy Director for Management.
    (iii) Associate Director for National Security and International 
Affairs.
    (iv) Associate Director for Natural Resources, Energy and Science.
    (2) Secret and below:
    (i) Deputy Associate Director for National Security.
    (ii) Deputy Associate Director for International Affairs.
    (iii) Deputy Associate Director for Energy and Science.
    (b) Classification authority is not delegated to persons who only 
reproduce, extract, or summarize classified information, or who only 
apply classification markings derived from source material or from a 
classification guide.


Sec. 1312.6  Duration of classification.

    (a) When determining the duration of classification for information 
originally classified under Executive Order 12958, an original 
classification authority shall follow the following sequence:
    (1) He/She shall attempt to determine a date or event that is less 
than 10 years from the date of original classification, and which 
coincides with the lapse of the information's national security 
sensitivity, and shall assign such date or event as the 
declassification instruction;
    (2) If unable to determine a date or event of less than 10 years, 
he/she shall ordinarily assign a declassification date that is 10 years 
from the date of the original classification decision;
    (3) He/She may extend the duration of classification or reclassify 
specific information for a period not to exceed 10 additional years if 
such action is consistent with the exemptions as outlined in Section 
1.6(d) of the Executive Order. This provision does

[[Page 48857]]

not apply to information contained in records that are more than 25 
years old and have been determined to have permanent historical value 
under Title 44 United States Code.
    (4) May exempt from declassification within 10 years specific 
information, which is consistent with the exemptions as outlined in 
Section 1.6 (d) of the Executive Order.
    Extending Duration of Classification. Extensions of classification 
is not automatic. If an original classification authority with 
jurisdiction over the information does not extend the classification of 
information assigned a date or event for declassification, the 
information is automatically declassified upon the occurrence of the 
date or event. If an original classification authority has assigned a 
date or event for declassification that is 10 years or less from the 
date of classification, an original classification authority with 
jurisdiction over the information may extend the classification 
duration of such information for additional periods not to exceed 10 
years at a time. Records determined to be of historical value may not 
exceed the duration of 25 years.
    (b) When extending the duration of classification, the original 
classification authority must:
    (1) Be an original classification authority with jurisdiction over 
the information.
    (2) Ensure that the information continues to meet the standards for 
classification under the Executive Order.
    (3) Make reasonable attempts to notify all known holders of the 
information. Information classified under prior orders marked with a 
specific date or event for declassification is automatically 
declassified upon that date or event. Information classified under 
prior orders marked with Originating Agency's Determination Required 
(OADR) shall:
    (i) Be declassified by a declassification authority as defined in 
Section 3.1 of the Order.
    (ii) Be re-marked by an authorized original classification 
authority with jurisdiction over the information to establish a 
duration of classification consistent with the Order.
    (iii) Be subject to Section 3.4 of the Order if the records are 
determined to be of historical value and are to remain classified for 
25 years from the date of its original classification.


Sec. 1312.7  Derivative classification.

    A ``derivative classification'' means that the information is in 
substance the same information that is currently classified, usually by 
another agency or classification authority. The application of 
derivative classification markings is the responsibility of the person 
who incorporates, restates, paraphrases, or generates in new form 
information that is already classified, or one who applies such 
classification markings in accordance with instructions from an 
authorized classifier or classification guide. Extreme care must be 
taken to continue classification and declassification markings when 
such information is incorporated into OMB documents. The duplication or 
reproduction of existing classified information is not derivative 
classification. Persons who use derivative classification need not 
possess original classification authority.


Sec. 1312.8  Standard identification and markings.

    (a) Original Classification. At the time classified material is 
produced, the classifier shall apply the following markings on the face 
of each originally classified document, including electronic media:
    (1) Classification Authority. The name/personal identifier, and 
position title of the original classifier shall appear on the 
``Classified By'' line.
    (2) Agency and Office of Origin. If not otherwise evident, the 
agency and office of origin shall be identified and placed below the 
name on the ``Classified By'' line.
    (3) Reasons for Classification. Identify the reason(s) to classify. 
The classifier shall include, at a minimum, a brief reference to the 
pertinent classification category(ies), or the number 1.5 plus the 
letter(s) that corresponds to that classification category in Section 
1.5 of the Order.
    (4) Declassification instructions. These instructions shall 
indicate the following:
    (i) The duration of the original classification decision shall be 
placed on the ``Declassify On'' line.
    (ii) The date or event for declassification that corresponds to the 
lapse of the information's national security sensitivity, which may not 
exceed 10 years from the date of the original decision.
    (iii) When a specific date or event within 10 years cannot be 
established, the classifier will apply the date that is 10 years from 
the date of the original decision.
    (iv) The exemption category from declassification. Upon 
determination that the information must remain classified beyond 10 
years, the classifier will apply the letter ``X'' plus a brief 
recitation of the exemption category(ies), or the letter ``X'' plus the 
number that corresponds to the exemption category(ies) in Section 
1.6(d) of the Order.
    (v) An original classification authority may extend the duration of 
classification for successive periods not to exceed 10 years at a time. 
The ``Declassify On'' line shall be revised to include the new 
declassification instructions and shall include the identity of the 
person authorizing the extension and the date of the action.
    (vi) Information exempted from automatic declassification at 25 
years should on the ``Declassify On'' line be revised to include the 
symbol ``25X'' plus a brief reference to the pertinent exemption 
categories/numbers of the Executive Order.
    (5) The overall classification of the document is the highest level 
of information in the document and will be conspicuously placed stamped 
at the top and bottom of the outside front and back cover, on the title 
page, and on the first page.
    (6) The highest classification of individual pages will be stamped 
at the top and bottom of each page, to include ``unclassified'' when it 
is applicable.
    (7) The classification of individual portions of the document, 
(ordinarily a paragraph, but including subjects, titles, graphics) 
shall be marked by using the abbreviations (TS), (S), (C), or (U), will 
be typed or marked at the beginning or end of each paragraph or section 
of the document. If all portions of the document are classified at the 
same level, this may be indicated by a statement to that effect.
    (b) Derivative Classification. Information classified derivatively 
on the basis of source documents shall carry the following markings on 
those documents:
    (1) The derivative classifier shall concisely identify the source 
document(s) or the classification guide on the ``Derived From'' line, 
including the agency and where available the office of origin and the 
date of the source or guide. When a document is classified derivatively 
on the basis of more than one source document or classification guide, 
the ``Derived From'' line shall appear as ``Derived From: Multiple 
Sources''.
    (2) The derivative classifier shall maintain the identification of 
each source with the file or record copy of the derivatively classified 
document. Where practicable the copies of the document should also have 
this list attached.
    (3) A document derivatively classified on the basis of a source 
document that is itself marked ``Multiple Sources''

[[Page 48858]]

shall cite the source document on its ``Derived From'' line rather than 
the term ``Multiple Sources''.
    (4) The reason for the original classification decision, as 
reflected in the source document, is not required to be transferred in 
a derivative classification action.
    (5) Declassification instructions shall carry forward the 
instructions on the ``Declassify On'' line from the source document to 
the derivation document or the duration instruction from the 
classification guide. Where there are multiple sources, the longest 
duration of any of its sources shall be used.
    (6) When a source document or classification guide contains the 
declassification instruction ``Originating Agency's Determination 
Required'' (OADR) the derivative document shall carry forward the fact 
that the source document(s) were so marked and the date of origin of 
the most recent source document(s).
    (7) The derivatively classified document shall be conspicuously 
marked with the highest level of classification of information.
    (8) Each portion of a derivatively classified document shall be 
marked in accordance with its source.
    (9) Each office shall, consistent with Section 3.8 of the order, 
establish and maintain a database of information that has been 
declassified.
    (c) Additional Requirements. (1) Markings other than ``Top 
Secret'', ``Secret'', and ``Confidential'' shall not be used to 
identify classified national security information.
    (2) Transmittal documents will be stamped to indicate the highest 
classification of the information transmitted, and shall indicate 
conspicuously on its face the following or something similar 
``Unclassified When classified Enclosure Removed'' to indicate the 
classification of the transmittal document standing alone.
    (3) The classification data for material other than documents will 
be affixed by tagging, stamping, recording, or other means to insure 
that recipients are aware of the requirements for the protection of the 
material.
    (4) Documents containing foreign government information shall 
include the markings ``This Document Contains (country of origin) 
Information'' * * * If the identity of the specific government must be 
concealed, the document shall be marked ``This Document Contains 
Foreign Government Information,'' and pertinent portions marked ``FGI'' 
together with the classification level, e.g., ``(FGI-C)''. In such 
cases, separate document identifying the government shall be maintained 
in order to facilitate future declassification actions.
    (5) Documents, regardless of medium, which are expected to be 
revised prior to the preparation of a finished product--working 
papers--shall be dated when created, marked with highest 
classification, protected at that level, and destroyed when no longer 
needed. When any of the following conditions exist, the working papers 
shall be controlled and marked in the same manner as prescribed for a 
finished classified document:
    (i) Released by the originator outside the originating activity;
    (ii) Retained more than 180 days from the date of origin;
    (iii) Filed permanently.
    (6) Information contained in unmarked records, or Presidential or 
related materials, and which pertain to the national defense or foreign 
relations of the U.S. and has been maintained and protected as 
classified information under prior orders shall continue to be treated 
as classified information under this Order and is subject to its 
provisions regarding declassification.


Sec. 1312.9  Downgrading and declassification.

    Classified information originated by OMB offices will be downgraded 
or declassified as soon as it no longer qualifies for continued 
protection under the provisions of the classification guides. Authority 
to downgrade or declassify OMB-originated information is granted to 
those authorized to classify (See Sec. 1312.5). Additionally, the 
Associate Director for Administration is authorized to exercise 
downgrading and declassification actions up to and including the Top 
Secret level.
    (a) Transferred material. Information which was originated by an 
agency that no longer exists, or that was received by OMB in 
conjunction with a transfer of functions, is deemed to be OMB-
originated material. Information which has been transferred to another 
agency for storage purposes remains the responsibility of OMB.
    (b) Periodic review of classified material. Each office possessing 
classified material will review that material on an annual basis or in 
conjunction with the transfer of files to non-current record storage 
and take action to downgrade or declassify all material no longer 
qualifying for continued protection at that level. All material 
transferred to non-current record storage must be properly marked with 
correct downgrade and declassification instructions.


Sec. 1312.10  Systematic review guidelines.

    The EOP Security Officer will prepare and keep current such 
guidelines as are required by Executive Order 12958 for the downgrading 
and declassification of OMB material that is in the custody of the 
Archivist of the United States.


Sec. 1312.11  Challenges to classifications.

    OMB employees are encouraged to familiarize themselves with the 
provisions of Executive Order 12958, April 20, 1995 and with OMB Manual 
Sections 1010, 1020, and 1030. Employees are also encouraged to 
question or to challenge those classifications they believe to be 
improper, unnecessary, or for an inappropriate time. Such questions or 
challenges may be addressed to the originator of the classification, 
unless the challenger desires to remain anonymous, in which case the 
question may be directed to the EOP Security Officer.


Sec. 1312.12  Security Program Review Committee.

    The Associate Director for Administration will chair the OMB 
Security Program Review Committee, which will act on suggestions and 
complaints about the OMB security program.

Subpart B--Control and Accountability of Classified Information


Sec. 1312.21  Purpose and authority.

    This subpart sets forth procedures for the receipt, storage, 
accountability, and transmission of classified information at the 
Office of Management and Budget. It is published under the authority of 
Executive Order 12958, April 20, 1995 as implemented by Directive No. 
1, Information Security Oversight Office (60 FR 53492, October 13, 
1995), and is applicable to all OMB employees.


Sec. 1312.22  Responsibilities.

    The effective direction by supervisors and the alert performance of 
duty by employees will do much to ensure the adequate security of 
classified information in the possession of OMB offices. Each employee 
has a responsibility to protect and account for all classified 
information that he/she knows of within his/her area of responsibility.
    Such information will be made available only to those persons who 
have an official need to know and who have been granted the appropriate 
security clearance. Particular care must be taken not to discuss 
classified information over unprotected communications circuits (to 
include intercom and closed-circuit TV), at non-

[[Page 48859]]

official functions, or at any time that it might be revealed to 
unauthorized persons. Classified information may only be entered into 
computer systems meeting the appropriate security criteria.
    (a) EOP Security Officer. In cooperation with the Associate 
Director for Administration, the EOP Security Officer supervises the 
administration of this section. Specifically, he/she:
    (1) Promotes the correct understanding of this section and insures 
that initial and annual briefings about security procedures are given 
to all new employees.
    (2) Provides for periodic inspections of office areas and reviews 
of produced documents to ensure full compliance with OMB regulations 
and procedures.
    (3) Takes prompt action to investigate alleged violations of 
security, and recommends appropriate administrative action with respect 
to violators.
    (4) Supervises the annual inventories of Top Secret material.
    (5) Ensures that containers used to store classified material meet 
the appropriate security standards and that combinations to security 
containers are changed as required.
    (b) Heads of Offices. The head of each division or office is 
responsible for the administration of this section in his/her area. 
These responsibilities include:
    (1) The appointment of accountability control clerks as prescribed 
in Part 1312.26 below.
    (2) The maintenance of the prescribed control and accountability 
records for classified information within the office.
    (3) Establishing internal procedures to ensure that classified 
material is properly safeguarded at all times.


Sec. 1312.23  Access to classified information.

    Classified information may be made available to a person only when 
the possessor of the information establishes that the person has a 
valid ``need to know'' and the access is essential to the 
accomplishment of official government duties. The proposed recipient is 
eligible to receive classified information only after he/she has been 
granted a security clearance by the EOP Security Officer. Cover sheets 
will be used to protect classified documents from inadvertent 
disclosure while in use. An SF-703 will be used for Top Secret 
material; an SF-704 for Secret material, and an SF-705 for Confidential 
material. The cover sheet should be removed prior to placing the 
document in the files.


Sec. 1312.24  Access by historical researchers and former Presidential 
appointees.

    (a) The requirements of Section 4.2(a)(3) of Executive Order 12958 
may be waived for persons who are engaged in historical research 
projects, or who previously have occupied policy-making positions to 
which they were appointed by the President.
    Waivers may be granted only if the Associate Director for 
Administration, in cooperation with the EOP Security Officer:
    (1) Determines in writing that access is consistent with the 
interest of national security;
    (2) Takes appropriate steps to protect classified information from 
unauthorized disclosure or compromise, and ensures that the information 
is safeguarded in a manner consistent with the order; and
    (3) Limits the access granted to former Presidential appointees to 
items that the person originated, reviewed, signed, or received while 
serving as a Presidential appointee.
    (b) In the instances described in paragraph (a) of this section, 
the Associate Director for Administration, in cooperation with the EOP 
Security Officer, will make a determination as to the trustworthiness 
of the requestor and will obtain written agreement from the requestor 
to safeguard the information to which access is given. He/She will also 
obtain written consent to the review by OMB of notes and manuscripts 
for the purpose of determining that no classified information is 
contained therein. Upon the completion of these steps, the material to 
be researched will be reviewed by the division/office of primary 
interest to ensure that access is granted only to material over which 
OMB has classification jurisdiction.


Sec. 1312.25  Storage.

    All classified material in the possession of OMB will be stored in 
GSA-approved, steel safes possessing three-position, dial-type, 
changeable combination locks, or in vault-type rooms approved for Top 
Secret storage. Under the direction of the EOP Security Officer, 
combinations to safes used in the storage of classified material will 
be changed when the equipment is placed in use, whenever a person 
knowing the combination no longer requires access to it, whenever the 
combination has been subjected to possible compromise, whenever the 
equipment is taken out of service, or at least once a year. Knowledge 
of combinations will be limited to the minimum number of persons 
necessary, and records of combinations will be assigned a 
classification no lower than the highest level of classified 
information stored in the equipment concerned. An SF-700, Security 
Container Information, will be used in recording safe combinations. 
Standard Form-702, Security Container check sheet, will be posted to 
each safe and will be used to record opening, closing, and checking the 
container whenever it is used.


Sec. 1312.26  Control of secret and confidential material.

    Classified material will be accounted for by the office having 
custody of the material. OMB For 87, Classified Document Control, will 
be used to establish accountability controls on all Secret material 
received or produced within OMB offices. No accountability controls are 
prescribed for Confidential material, but offices desiring to control 
and account for such material should use the procedures applicable to 
Secret material. Information classified by another agency shall not be 
disclosed without that agency's authorization.
    (a) Accountability Control Clerks. Each division or office head 
will appoint one person as the Accountability Control Clerk (ACC). The 
ACC will be the focal point for the receipt, routing, accountability, 
dispatch, and declassification downgrading or destruction of all 
classified material in the possession of the office.
    (b) OMB Form 87. One copy of OMB Form 87 will be attached to the 
document, and one copy retained in the accountability control file for 
each active document within the area of responsibility of the ACC. 
Downgrading or destruction actions, or, other actions removing the 
document from the responsibility of the ACC will be recorded on the OMB 
Form 87, and the form filed in an inactive file. Inactive control forms 
will be cut off annually, held for two additional years, then 
destroyed.
    (c) Working Papers and Drafts. Working papers and drafts of 
classified documents will be protected according to their security 
classification, but will not be subject to accountability control 
unless they are forwarded outside of OMB.
    (d) Typewriter Ribbons. Typewriter ribbons, cassettes, and other 
devices used in the production of classified material will be removed 
from the machine after each use and protected as classified material 
not subject to controls. Destruction of such materials will be as 
prescribed in Part 1312.29 below.
    (e) Reproduction. Classified material will be reproduced only as 
required unless prohibited by the originator for the conduct of 
business and reproduced copies are subject to the same controls as are 
the original documents. Top

[[Page 48860]]

Secret material will be reproduced only with the written permission of 
the originating agency.


Sec. 1312.27  Top secret control.

    The EOP Security Officer serves as the Top Secret Control Officer 
(TSCO) for OMB. He will be assisted by the Alternate TSCOs in each 
division/office Holding Top Secret material. The ATSCOs will be 
responsible for the accountability and custodianship of Top Secret 
material within their divisions/offices. The provisions of this section 
do not apply to special intelligence material, which will be processed 
as prescribed by the controlling agency.
    (a) Procedures. All Top Secret material produced or received in OMB 
will be taken to the appropriate ATSCO for receipting, establishment of 
custodianship, issuance to the appropriate action officer, and, as 
appropriate, obtaining a receipt. Top Secret material in the custody of 
the TSCO or ATSCO will normally be segregated from other classified 
material and will be stored in a safe under his or her control. Such 
material will be returned to the appropriate ATSCO by action officers 
as soon as action is completed. OMB Form 87 will be used to establish 
custody, record distribution, routing, receipting and destruction of 
Top Secret material. Top Secret Access Record and Cover Sheet (Standard 
Form 703) will be attached to each Top Secret document while it is in 
the possession of OMB.
    (b) Inventory. The Associate Director for Administration will 
notify each appropriate OMB office to conduct an inventory of its Top 
Secret material by May 1 each year. The head of each office will notify 
the EOP Security Officer when the inventory has been satisfactorily 
completed. Each Top Secret item will be examined to determine whether 
it can be downgraded or declassified, and the inventory will be 
adjusted accordingly. Discrepancies in the inventory, indicating loss 
or possible compromise, will be thoroughly investigated by the EOP 
Security Officer or by the Federal Bureau of Investigation, as 
appropriate. Each ATSCO will retain his/her division's inventory in 
accordance with the security procedures set forth herein.


Sec. 1312.28  Transmission of classified material.

    Prior to the transmission of classified material to offices outside 
OMB, such material will be enclosed in opaque inner and outer covers or 
envelopes. The inner cover will be sealed and marked with the 
classification, and the address of the sender and of the addressee. The 
receipt for the document, OMB Form 87, (not required for Confidential 
material) will be attached to or placed within the inner envelope to be 
signed by the recipient and returned to the sender. Receipts will 
identify the sender, the addressee, and the document, and will contain 
no classified information. The outer cover or envelope will be sealed 
and addressed with no identification of its contents.
    (a) Transmittal of Top Secret Material. The transmittal of Top 
Secret material shall be by personnel specifically designated by the 
EOP Security Officer, or by Department of State diplomatic pouch, by a 
messenger-courier system specifically created for that purpose. 
Alternatively, it shall be taken to the White House Situation Room for 
transmission over secure communications circuits.
    (b) Transmittal of Secret Material. The transmittal of Secret 
material shall be as follows:
    (1) Within and between the fifty States, the District of Columbia, 
and Puerto Rico: Use one of the authorized means for Top Secret 
material, or transmit by U.S. Postal Service express or registered 
mail.
    (2) Other Areas. Use the same means authorized for Top Secret, or 
transmit by U.S. registered mail through Military Postal Service 
facilities.
    (c) Transmittal of Confidential Material. As identified above, or 
transmit by U.S. Postal Service Certified, first class, or express mail 
service within and between the fifty States, the District of Columbia, 
and Puerto Rico.
    (d) Transmittal Between OMB Offices and Within the EOP Complex. 
Classified material will normally be hand carried within and between 
offices in the Executive Office of the President complex by cleared OMB 
employees. Documents so carried must be protected by the appropriate 
cover sheet or outer envelope. Top Secret material will always be hand 
carried in this manner. Secret and Confidential material may be 
transmitted between offices in the EOP complex by preparing the 
material as indicated above (double envelope) and forwarding it by 
special messenger service provided by the messenger center. The 
messenger shall be advised that the material is classified. Receipts 
shall be obtained if Top Secret or Secret material is being transmitted 
outside of OMB. Classified material will never be transmitted in the 
Standard Messenger Envelope (SF Form 65), or by the Mail Stop system.


Sec. 1312.29  Destruction.

    The destruction of classified material will be accomplished under 
the direction of the TSCO or the appropriate ATSCO, who will assure 
that proper accountability records are kept. Classified official record 
material will be processed to the OA Records Management Branch, NEOB 
Room 5208, in accordance with OMB Manual Section 540. Classified 
nonrecord material will be destroyed as soon as it becomes excess to 
the needs of the office. The following destruction methods are 
authorized:
    (a) Shredding. Using the equipment approved for that purpose within 
OMB offices. Shredders will not accommodate typewriter ribbons or 
cassettes. Shredding is the only authorized means of Destroying Top 
Secret material.
    (b) Burn Bag. Classified documents, cassettes, ribbons, and other 
materials at the Secret level or below, not suitable for shredding, may 
be destroyed by using burn bags, which can be obtained from the supply 
store. They will be disposed of as follows:
    (1) OEOB: Unless on an approved list for pick-up of burn bags, all 
other burn bags should be delivered to Room 096 OEOB between 8:00 a.m. 
and 4:30 p.m. Burn bags are not to be left in hallways.
    (2) NEOB: Hours for delivery of burn bag materials to the NEOB 
Loading Dock Shredder Room are Monday through Friday from 8:00 a.m. to 
9:30 a.m.; 10:00 a.m. to 11:00 a.m.; 11:45 a.m. to 1:30 p.m. and 2:00 
p.m. to 3:30 p.m. The phone number of the Shredder Room is 395-1593. In 
the event the Shredder Room is not manned, do not leave burn bags 
outside the Shredder Room as the security of that material may be 
compromised.
    (3) Responsibility for the security of the burn bag remains with 
the OMB office until it is handed over to the authorized representative 
at the shredder room. Accountability records will be adjusted after the 
burn bags have been delivered. Destruction actions will be recorded on 
OMB Form 87 by the division TSCO or by the appropriate ATSCO at the 
time the destruction is accomplished or at the time the burn bag is 
delivered to the U.D. Officer.
    (c) Technical Guidance. Technical guidance concerning appropriate 
methods, equipment, and standards for destruction of electronic 
classified media, processing equipment components and the like, may be 
obtained by submitting all pertinent information to NSA/CSS Directorate 
for Information Systems Security, Ft. Meade, Maryland 20755. 
Specifications concerning appropriate equipment and

[[Page 48861]]

standards for destruction of other storage media may be obtained from 
the General Services Administration.


Sec. 1312.30  Loss or possible compromise.

    Any person who has knowledge of the loss or possible compromise of 
classified information shall immediately secure the material and then 
report the circumstances to the EOP Security Officer. The EOP Security 
Officer will immediately initiate an inquiry to determine the 
circumstances surrounding the loss or compromise for the purpose of 
taking corrective measures and/or instituting appropriate 
administrative, disciplinary, or legal action. The agency originating 
the information shall be notified of the loss or compromise so that the 
necessary damage assessment can be made.


Sec. 1312.31  Security violations.

    (a) A security violation notice is issued by the United States 
Secret Service when an office/division fails to properly secure 
classified information. Upon discovery of an alleged security 
violation, the USSS implements their standard procedures which include 
the following actions:
    (1) Preparation of a Record of Security Violation form;
    (2) When a document is left on a desk or other unsecured area, the 
officer will remove the classified document(s) and deliver to the 
Uniformed Division's Control Center, and
    (3) Where the alleged violation involves an open safe, the officer 
will remove one file bearing the highest classification level, annotate 
it with his or her name, badge number, date and time, and return the 
document to the safe, which will then be secured. A description of the 
document will be identified in the Record of Security Violations and a 
copy of the violation will be left in the safe.
    (b) Office of Record. The EOP Security Office shall serve as the 
primary office of record for OMB security violations. Reports of 
violations will remain in the responsible individual's security file 
until one year after the individual departs the Executive Office of the 
President, at which time all violation reports will be destroyed.
    (c) Compliance. All Office of Management and Budget employees will 
comply with this section. Additionally, personnel on detail or 
temporary duty will comply with this section, however, their parent 
agencies will be provided with a copy of any security violation 
incurred during their period of service to OMB.
    (d) Responsibilities for Processing Security Violations. (1) EOP 
Security Officer. The EOP Security Officer shall provide OMB with 
assistance regarding Agency security violations. Upon receipt of a 
Record of Security Violation alleging a security violation, the EOP 
Security Officer shall:
    (i) Prepare a memorandum to the immediate supervisor of the office/
division responsible for the violation requesting that an inquiry be 
made into the incident. Attached to the memorandum will be a copy of 
the Record of Security Violation form. The receiving office/division 
will prepare a written report within five working days of its receipt 
of the Security Officer's memorandum.
    (ii) Provide any assistance needed for the inquiry conducted by the 
office/division involved in the alleged violation.
    (iii) Upon receipt of the report of inquiry from the responsible 
office/division, the EOP Security Officer will:
    (A) Consult with the OMB Associate Director for Administration and 
the General Counsel;
    (B) Determine if a damage assessment report is required. A damage 
assessment will be made by the agency originating the classified 
information, and will be prepared after it has been determined that the 
information was accessed without authorization; and
    (C) Forward the report with a recommendation to the OMB General 
Counsel.
    (2) Immediate Supervisors. Upon receipt of the EOP Security 
Officer's security violation memorandum, the immediate supervisor will 
make an inquiry into the alleged incident, and send a written report of 
inquiry to the EOP Security Officer. The inquiry should determine, and 
the related report should identify, at a minimum:
    (i) Whether an actual security violation occurred,
    (ii) The identity of the person(s) responsible; and
    (iii) The probability of unauthorized access.
    (3) Deputy Associate Directors (or the equivalent) will:
    (i) Review and concur or comment on the written report; and
    (ii) In conjunction with the immediate supervisor, determine what 
action will be taken to prevent, within their area of responsibility, a 
recurrence of the circumstances giving rise to the violation.
    (e) Staff Penalties for OMB Security Violations. When assessing 
penalties in accordance with this section, only those violations 
occurring within the calendar year (beginning January 1) will be 
considered. However, reports of all previous violations remain in the 
security files. These are the standard violation penalties that will be 
imposed. At the discretion of the Director or his designee, greater or 
lesser penalties may be imposed based upon the circumstances giving 
rise to the violation, the immediate supervisor's report of inquiry, 
and the investigation and findings of the EOP Security Officer and/or 
the OMB Associate Director for Administration.
    (1) First violation. (i) Written notification of the violation will 
be filed in the responsible individual's security file; and
    (ii) The EOP Security Officer and/or the Associate Director for 
Administration will consult with the respective immediate supervisor, 
and the responsible individual will be advised of the penalties that 
may be applied should a second violation occur.
    (2) Second violation. (i) Written notification of the violation 
will be filed in the responsible individual's security file;
    (ii) The EOP Security Officer and/or the Associate Director for 
Administration will consult with the respective Deputy Associate 
Director (or the equivalent) and immediate supervisor and the 
responsible individual who will be advised of the penalties that may be 
applied should a third violation occur; and
    (iii) A letter of Warning will be placed in the Disciplinary Action 
file maintained by the Office of Administration, Human Resources 
Management Division.
    (4) Third violation. (i) Written notification of the violation will 
be filed in the responsible individual's security file;
    (ii) The EOP Security Officer and/or the Associate Director for 
Administration will consult with the OMB Deputy Director, General 
Counsel, the respective Deputy Associate Director (or equivalent), and 
the immediate supervisor and the responsible individual who will be 
advised of the penalties that may be applied should a fourth violation 
occur; and
    (iii) A Letter of Reprimand will be placed in the Disciplinary 
Action file maintained by the OA/HRMD.
    (4) Fourth Violation. (i) Written notification of the violation 
will be filed in the responsible individual's security file;
    (ii) The EOP Security Officer and/or the Associate Director for 
Administration will consult with the OMB Director, Deputy Director, 
General Counsel, the respective Deputy Associate Director (or the 
equivalent), and immediate supervisor;

[[Page 48862]]

    (iii) The responsible individual may receive a suspension without 
pay for a period not to exceed 14 days; and
    (iv) The responsible individual will be advised that future 
violations could result in the denial of access to classified material 
or other adverse actions as may be appropriate, including dismissal.

Subpart C--Mandatory Declassification Review


Sec. 1312.32  Purpose and authority.

    Other government agencies, and individual members of the public, 
frequently request that classified information in OMB files be reviewed 
for possible declassification and release. This subpart prescribes the 
procedures for such review and subsequent release or denial. It is 
issued under the authority of Executive Order 12958, April 20, 1995, as 
implemented by Directive No. 1, Information Security Oversight Office 
(60 FR 53402, October 13, 1995).


Sec. 1312.33  Responsibility.

    All requests for the mandatory declassification review of 
classified information in OMB files should be addressed to the 
Associate Director for Administration, who will acknowledge receipt of 
the request. When a request does not reasonably describe the 
information sought, the requester shall be notified that unless 
additional information is provided, or the scope of the request is 
narrowed, no further action will be taken. All requests will receive a 
response within 180 days of receipt of the request.


Sec. 1312.34  Information in the custody of OMB.

    Information contained in OMB files and under the exclusive 
declassification jurisdiction of the office will be reviewed by the 
office of primary interest to determine whether, under the 
declassification provisions of the Order, the requested information may 
be declassified. If so, the information will be made available to the 
requestor unless withholding is otherwise warranted under applicable 
law. If the information may not be released, in whole or in part, the 
requestor shall be given a brief statement as to the reasons for 
denial, a notice of the right to appeal the determination to the Deputy 
Director, OMB, and a notice that such an appeal must be filed within 60 
days in order to be considered.


Sec. 1312.35  Information classified by another agency.

    When a request is received for information that was classified by 
another agency, the Associate Director for Administration will forward 
the request, along with any other related materials, to the appropriate 
agency for review and determination as to release. Recommendations as 
to release or denial may be made if appropriate. The requester will be 
notified of the referral, unless the receiving agency objects on the 
grounds that its association with the information requires protection.


Sec. 1312.36  Appeal procedure.

    Appeals received as a result of a denial, see Sec. 1312.34, will be 
routed to the Deputy Director who will take action as necessary to 
determine whether any part of the information may be declassified. If 
so, he will notify the requester of his determination and make that 
information available that is declassified and otherwise releasable. If 
continued classification is required, the requestor shall be notified 
by the Deputy Director of the reasons thereafter. Determinations on 
appeals will normally be made within 60 working days following receipt. 
If additional time is needed, the requestor will be notified and this 
reason given for the extension. The agency's decision can be appealed 
to the Interagency Security Classification Appeals Panel.


Sec. 1312.37  Fees.

    There will normally be no fees charged for the mandatory review of 
classified material for declassification under this section.

[FR Doc. 96-23727 Filed 9-16-96; 8:45 am]
BILLING CODE 3110-01-P