[Federal Register Volume 61, Number 231 (Friday, November 29, 1996)]
[Rules and Regulations]
[Pages 60559-60562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30280]


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DEPARTMENT OF THE TREASURY
Customs Service

31 CFR Part 1


 Privacy Act of 1974, as Amended; Exemption of System of Records 
From Certain Provisions

AGENCY: Customs Service, Treasury.

ACTION: Final Rule; determination.

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SUMMARY: In accordance with the Privacy Act of 1974, as amended, 
Customs has determined to exempt a system of records, the Pacific Basin 
Reporting Network (Treasury/ Customs .171) from certain provisions of 
the Privacy Act. The exemptions are intended to increase the value of 
the system of records for law enforcement purposes, to comply with 
legal prohibitions against the disclosure of certain kinds of 
information, and to protect the privacy of individuals identified in 
the system of records.

EFFECTIVE DATE: November 29, 1996.

FOR FURTHER INFORMATION CONTACT: Marvin M. Amernick, Acting Chief, 
Disclosure Law Branch, Office of Regulations and Rulings, U.S. Customs 
Service, (202) 482-6970.

SUPPLEMENTARY INFORMATION: As a law enforcement agency, the U.S. 
Customs Service has a wide variety of

[[Page 60560]]

investigatory responsibilities including, for example, investigations 
of smuggling, narcotics trafficking, the importation of prohibited or 
restricted merchandise, violations of the Neutrality Act, 
investigations of organized crime activities, commercial fraud 
investigations and many others. Among the activities in which Customs 
is involved is the clearance of aircraft and vessels and their crews 
into the customs territory of the United States. The purpose of the 
Pacific Basin Reporting Network system of records is to collect and 
store information with respect to potential violations of Customs and 
other domestic and international laws and where appropriate to disclose 
this information to other law enforcement agencies which have an 
interest in this information. Authority for the system is provided by 5 
U.S.C. 301; 19 U.S.C. 1433, 1459; 19 U.S.C. 1644(a); Treasury 
Department Order No. 165, Revised, as amended.
     Pursuant to the Privacy Act of 1974, as amended, 5 U.S.C.552a, the 
Department of the Treasury published in the Federal Register of 
November 9, 1995 (60 FR 56648), all of its systems of records including 
the Pacific Basin Reporting Network--Treasury/Customs .171. This system 
of records assists Customs in the proper performance of its functions 
under the statutes and Treasury Department Order No. 165 cited above.
     Under 5 U.S.C. 552a(j)(2), the head of an agency may promulgate 
rules to exempt a system of records from certain provisions of 5 U.S.C. 
552a if the system of records is maintained by an agency or component 
thereof which performs as its principal function any activity 
pertaining to the enforcement of criminal laws, including police 
efforts to prevent,control, or reduce crime or to apprehend criminals, 
and the activities of prosecutors, courts, correctional, probation, 
pardon, or parole authorities, and which consists of: (a) Information 
compiled for the purpose of identifying individual criminal offenders 
and alleged offenders and consisting only of identifying data and 
notations of arrests, the nature and disposition of criminal charges, 
sentencing, confinement, release and parole and probation status; (b) 
information compiled for the purpose of a criminal investigation, 
including reports of informants and investigators, and associated with 
an identifiable individual; or (c) reports identifiable to an 
individual compiled at any stage of the process of enforcement of the 
criminal laws from arrest or indictment through release from 
supervision.
     In addition, under 5 U.S.C. 552a(k)(2), the head of an agency may 
promulgate rules to exempt a system of records from certain provisions 
of 5 U.S.C. 552a if the system of records is investigatory material 
compiled for law enforcement purposes other than material within the 
scope of subsection (j)(2) set forth above.
     Accordingly, pursuant to the authority contained in section 
1.23(c) of the regulations of the Department of the Treasury (31 CFR 
1.23(c)), the Commissioner of Customs has determined to exempt the 
Pacific Basin Reporting Network from certain provisions of the Privacy 
Act pursuant to 5 U.S.C. 552a(j)(2), (k)(2) and 31 CFR 1.23(c). The 
proposed rule announcing the determination was published in the Federal 
Register on November 19, 1992, at 57 FR 54539. No comments were 
received in response to the proposed rule. The specific provisions and 
the reasons for exempting the system of records from each specific 
provision of 5 U.S.C. 552a are set forth below as required by 5 U.S.C. 
552a(j)(2) and (k)(2).

General Exemption Under 5 U.S.C. 552a(j)(2)

     Pursuant to 5 U.S.C. 552a(j)(2), the Commissioner of Customs 
exempts the Pacific Basin Reporting Network from the following 
provisions of the Privacy Act of 1974, as amended, 5 U.S.C. 552a(c)(3) 
and (4); (d)(1), (2), (3) and (4); (e)(1),(2),(3), (4)(G),(H) and 
(I);(e)(5) and (8); (f) and (g).

Specific Exemptions Under 5 U.S.C. 552a(k)(2)

     To the extent the exemption under 5 U.S.C. 552a(j) does not apply 
to the Pacific Basin Reporting Network, the Commissioner of Customs 
exempts the Pacific Basin Reporting Network from the following 
provisions of 5 U.S.C. 552a pursuant to 5 U.S.C. 552(k)(2): 5 U.S.C. 
552a(c)(3); (d)(1),(2), (3) and (4); (e)(1), (e)(4)(G), (H) and (I); 
and (f).

Reasons for Exemption Under 5 U.S.C. 552a(j)(2) and (k)(2)

     Although more specific explanations are contained in 31 CFR 1.36 
under the heading United States Customs Service, the following 
explanations for exemptions will be helpful.
    (1) Pursuant to 5 U.S.C. 552a(e)(4)(G) and (f)(1), individuals may 
inquire whether a system of records contains records pertaining to 
them. Application of these provisions to the Pacific Basin Reporting 
Network would give individuals an opportunity to learn whether they 
have been identified as either suspects or subjects of investigation. 
As further described in the following subsection, access to such 
knowledge would impair the ability of the Office of Investigations to 
carry out its mission, since individuals could take steps to avoid 
detection, inform associates that an investigation is in progress: 
learn whether they are only suspects or identified as law violators; 
begin, continue, or resume illegal conduct upon learning that they are 
not identified in the system of records; or destroy evidence needed to 
prove the violation.
    (2) Pursuant to 5 U.S.C.552a(d)(1), (e)(4)(H) and (f)(2), (3) and 
(5), individuals may gain access to records pertaining to them. The 
application of these provisions to the Pacific Basin Reporting Network 
would compromise the ability of the Office of Investigations to provide 
useful tactical and strategic information to law enforcement agencies. 
Permitting access to records contained in the Pacific Basin Reporting 
Network would provide individuals with information concerning the 
nature of any current investigations concerning them and would enable 
them to avoid detection or apprehension. By discovering the collection 
of facts which would form the basis of their arrest, by enabling them 
to destroy or alter evidence of criminal conduct that would form the 
basis for their arrest, and by learning that criminal investigators had 
reason to believe that a crime was about to be committed, they could 
delay the commission of the crime or change the scene of the crime to a 
location which might not be under surveillance.
     Permitting access to either on-going or closed investigations 
files would also reveal investigative techniques and procedures, the 
knowledge of which could enable individuals planning crimes to 
structure their operations in such a way as to avoid detection or 
apprehension and thereby neutralize law enforcement officers' 
established investigative tools and procedures.
     Permitting access to investigative files and records could, 
moreover, disclose the identity of confidential sources and informers 
and the nature of the information supplied and thereby endanger the 
physical safety of sources of information by exposing them to reprisals 
for having provided the information. Confidential sources and informers 
might refuse to provide criminal investigators with valuable 
information if they could not be secure in the knowledge that their 
identities would not be revealed through disclosure of either their 
names or the nature of the information they supplied. Loss of access to 
such sources would seriously impair the ability of the Office

[[Page 60561]]

of Investigations to carry out its mandate.
     Furthermore, providing access to records contained in the Pacific 
Basin Reporting Network could reveal the identities of undercover law 
enforcement officials who compiled information regarding the 
individual's criminal activities and thereby endanger the physical 
safety of those undercover officers or their families by exposing them 
to possible reprisals.
     By compromising the law enforcement value of the Pacific Basin 
Reporting Network for the reasons outlined above, permitting access in 
keeping with these provisions would discourage other law enforcement 
and regulatory agencies, foreign and domestic, from freely sharing 
information with the Office of Investigations and thus would restrict 
the Office's access to information necessary to accomplish its mission 
most effectively.
    (3) Pursuant to 5 U.S.C. 552a(d)(2),(3), and (4),(e)(4)(H), and 
(f)(4) an individual may request amendment of a record pertaining to 
him or her and the agency must either amend the record, or note the 
disputed portion of the record and provide a copy of the individual's 
statement of disagreement with the agency's refusal to amend a record 
to persons or other agencies to whom the record is thereafter 
disclosed. Since these provisions depend on the individual's having 
access to his or her records, and since these rules exempt the Pacific 
Basin Reporting Network from provisions of 5 U.S.C. 552a, as amended, 
relating to access to records, for the reasons set out in (2) above, 
these provisions should not apply to the Pacific Basin Reporting 
Network.
    (4) Under 5 U.S.C. 552a(c)(4) an agency must inform any person or 
other agency about any correction or notation of dispute that the 
agency made in accordance with 5 U.S.C. 552a(d) to any record that the 
agency disclosed to the person or agency if an accounting of the 
disclosure was made. Since this provision depends on an individual's 
having access to and an opportunity to request amendment of records 
pertaining to him or her, and since these rules exempt the Pacific 
Basin Reporting Network from the provisions of 5 U.S.C. 552a relating 
to access to and amendment of records, for the reasons set out in 
paragraph (3) above, this provision ought not apply to the Pacific 
Basin Reporting Network.
    (5) Under 5 U.S.C. 552a(c)(3) an agency is required to make an 
accounting of disclosure of records available to the individual named 
in the record upon his or her request. The accounting must state the 
date, nature, and purpose of each disclosure of the record and the name 
and address of the recipient.
     The application of this provision would impair the ability of 
enforcement agencies outside the Department of the Treasury to make 
effective use of information provided by the Pacific Basin Reporting 
Network. Making an accounting of disclosure available to the subjects 
of an investigation would alert those individuals to the fact that 
another agency is conducting an investigation into their criminal 
activities and could reveal the geographic location of the other 
agency's investigation, the nature and purpose of that investigation, 
and dates on which that investigation was active. Violators possessing 
such knowledge would be able to take measures to avoid detection or 
apprehension by altering their operations, by transferring their 
criminal activities to other geographical areas, or by destroying or 
concealing evidence that would form the basis for arrest.
     Moreover, providing accounting to the subjects of investigations 
would alert them to the fact that the Pacific Basin Reporting Network 
has information regarding their criminal activities and could inform 
them of the general nature of that information. Access to such 
information could reveal the operation of the Office of Investigation's 
information gathering and analysis systems and permit violators to take 
steps to avoid detection or apprehension.
    (6) Under 5 U.S.C. 552a(e)(4)(1) an agency is required to publish a 
general notice listing the categories of sources for information 
contained in a system of records. The application of this provision to 
the Pacific Basin Reporting Network could compromise its ability to 
provide useful information to law enforcement agencies, since revealing 
sources for the information could disclose investigative techniques and 
procedures, result in threats or reprisals against informers by the 
subjects of investigations, and cause informers to refuse to give full 
information to criminal investigators for fear of having their 
identities as sources disclosed.
    (7) 5 U.S.C. 552a(e)(1) requires that an agency maintain in its 
records only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required to be 
accomplished by statute or executive order. The term ``maintain'' as 
defined in 5 U.S.C. 552a(a)(3) includes ``collect'' and 
``disseminate.'' At the time that information is collected by the 
Customs Service, there is often insufficient time to determine whether 
the information is relevant and necessary to accomplish a purpose of 
the Customs Service; in many cases information collected may not be 
immediately susceptible to a determination of whether the information 
is relevant and necessary, particularly in the early stages of 
investigation, and in many cases information which initially appears to 
be irrelevant and unnecessary may, upon further evaluation or upon 
continuation of the investigation, prove to have particular relevance 
to an enforcement program of the Customs Service. Further, not all 
violations of law discovered during a Customs Service criminal 
investigation fall within the investigative jurisdiction of the Customs 
Service; in order to promote effective law enforcement, it often 
becomes necessary and desirable to disseminate information pertaining 
to such violations to other law enforcement agencies which have 
jurisdiction over the offense to which the information relates. The 
Customs Service should not be placed in a position of having to ignore 
information relating to violations of law not within its jurisdiction 
where that information comes to the attention of the Customs Service 
through the conduct of a lawful Customs Service investigation. The 
Customs Service therefore believes that it is appropriate to exempt the 
above-listed systems of records from the provisions of 5 U.S.C. 
552a(e)(1).
    (8) Under 5 U.S.C. 552a(e)(2) an agency is requested to collect 
information to the greatest extent practicable directly from the 
subject individual when the information may result in adverse 
determinations about an individual's rights, benefits, and privileges 
under Federal programs. The application of this provision to the 
Pacific Basin Reporting Network would impair the ability to collate, 
analyze, and disseminate investigative intelligence and enforcement 
information.
     Most information collected about an individual under criminal 
investigation is obtained from third parties, such as witnesses and 
informers. It is usually not feasible to rely upon the subject of the 
investigation as a source for information regarding his criminal 
activities. An attempt to obtain information from the subject of a 
criminal investigation will often alert that individual to the 
existence of an investigation, thereby affording the individual an 
opportunity to attempt to conceal his criminal activities so as to 
avoid apprehension. In certain instances, the subject of a criminal 
investigation is not required to supply

[[Page 60562]]

information to criminal investigators as a matter of legal duty. During 
criminal investigations it is often a matter of sound investigative 
procedure to obtain information from a variety of sources to verify 
information already obtained.
    (9) Pursuant to 5 U.S.C. 552a(e)(3) an agency must inform each 
individual whom it asks to supply information, on the form that it uses 
to collect the information or on a separate form that the individual 
can retain, the agency's authority for soliciting the information; 
whether the disclosure of information is voluntary or mandatory; the 
principal purposes for which the agency will use the information and 
the effects on the individual of not providing all or part of the 
information. The Pacific Basin Reporting Network should be exempted 
from this provision to avoid impairing the ability of the Office of 
Investigation to collect and collate investigative intelligence and 
enforcement data.
     Confidential sources or undercover law enforcement officers often 
obtain information under circumstances in which it is necessary to keep 
the true purpose of their actions secret so as not to let the subject 
of the investigation or his or her associates know that a criminal 
investigation is in progress. If it became known that the undercover 
officer was assisting in a criminal investigation, the officer's 
physical safety could be endangered through reprisal, and that officer 
may not be able to continue working on the investigation.
     Further, individuals for personal reasons often would feel 
inhibited in talking to a person representing a criminal law 
enforcement agency but would be willing to talk to a confidential 
source or undercover officer whom they believe not to be involved in 
law enforcement activities. Providing a confidential source of 
information with written evidence that he or she was a source, as 
required by this provision, could increase the likelihood that the 
source of information would be subject to retaliation by the subject of 
the investigation. Further, application of the provision could result 
in an unwarranted invasion of the personal privacy of the subject of 
the criminal investigation, where further investigation reveals that 
the subject was not involved in any criminal activity.
    (10) Pursuant to 5 U.S.C. 552a(e)(5) an agency must maintain all 
records it uses in making any determination about any individual with 
such accuracy, relevance, timeliness, and completeness as is reasonably 
necessary to assure fairness to the individual in the determination.
     Since 5 U.S.C. 552a(a)(3) defines ``maintain'' to include 
``collect'' and ``disseminate'', application of this provision to the 
Pacific Basin Reporting Network would hinder the initial collection of 
any information that could not, at the moment of collection, be 
determined to be accurate, relevant, timely, and complete. Similarly, 
application of this provision would seriously restrict the ability of 
Customs to disseminate information from the Pacific Basin Reporting 
Network pertaining to a possible violation of law to law enforcement 
and regulatory agencies. In collecting information during a criminal 
investigation, it is often impossible or unfeasible to determine 
accuracy, relevance, timeliness or completeness prior to collection of 
the information.
     Information that may initially appear inaccurate, irrelevant, 
untimely, or incomplete may, when collected and analyzed with other 
available information, become more pertinent as an investigation 
progresses. In addition, application of this provision could seriously 
impede criminal investigators and intelligence analysts in the exercise 
of their judgment in reporting results obtained during criminal 
investigations.
    (11) Under 5 U.S.C. 552a(e)(8) an agency must make reasonable 
efforts to serve notice on an individual when the agency makes any 
record on the individual available to any person under compulsory legal 
process, when such process becomes a matter of public record. The 
Pacific Basin Reporting Network should be exempted from this provision 
to avoid revealing investigative techniques and procedures outlined in 
those records and to prevent revelation of the existence of an ongoing 
investigation where there is need to keep the existence of the 
investigation secret.
    (12) Under 5 U.S.C. 552a(g) civil remedies are provided to an 
individual when an agency wrongfully refuses to amend a record or to 
review a request for amendment, when an agency wrongfully refuses to 
grant access to a record, when an agency fails to maintain accurate, 
relevant, timely, and complete records which are used to make a 
determination adverse to the individual, and when an agency fails to 
comply with any other provision of 5 U.S.C. 552a so as to adversely 
affect the individual.
    The Pacific Basin Reporting Network is exempted from this provision 
to the extent that the civil remedies may relate to this provision of 5 
U.S.C. 552a from which these rules exempt the Pacific Basin Reporting 
Network, since there are civil remedies for failure to comply with 
provisions from which the Pacific Basin Reporting Network is exempted. 
Exemption from this provision will also protect the Pacific Basin 
Reporting Network from baseless civil court actions that might hamper 
its ability to collate, analyze, and disseminate investigative 
intelligence and law enforcement data.
     A conforming amendment to 31 CFR 1.36 will be published at a later 
date in the Federal Register by the Department of the Treasury.

George J. Weise,
Commissioner of Customs.
Approved:

Dated: November 14, 1996.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).

Dated: November 18, 1996.
 Alex Rodriguez,
Deputy Assistant Secretary (Administration).

[FR Doc. 96-30280 Filed 11-27-96; 8:45 am]
BILLING CODE 4820-02-F