[Federal Register Volume 64, Number 5 (Friday, January 8, 1999)]
[Proposed Rules]
[Pages 1152-1155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-355]


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DEPARTMENT OF THE TREASURY

Customs Service

31 CFR Part 1


Privacy Act of 1974; Implementation

AGENCY: Customs Service, Department of the Treasury.

ACTION: Proposed rule.

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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 Seized Asset 
and Case Tracking System (SEACATS) Treasury/ Customs .213 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.

DATES: Comments must be received no later than February 8, 1999.

ADDRESSES: Comments (preferably in triplicate) may be submitted to the 
U.S. Customs Service, Office of Regulations and Rulings, Disclosure Law 
Branch, 1300 Pennsylvania Ave. NW., Washington, DC 20229. Comments will 
be available for inspection and copying at the Disclosure Law Branch, 
1300 Pennsylvania Ave., NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Ellen Mulvenna, Office of Information 
and Technology, U.S. Customs Service, (202) 927-0800.

SUPPLEMENTARY INFORMATION: This computerized database will permit the 
retrieval of information as part of a redesigned work process improving 
the way the Office of Information and Technology uses technology to 
maximize efficiency. The purpose of the newly proposed system of 
records is to provide Customs and the Treasury Executive Office of 
Asset Forfeiture with a comprehensive system for tracking seized and 
forfeited property, penalties and liquidated damages from case 
initiation to final resolution. The system includes investigative 
reports relating to seizures and other law enforcement matters. 
Authority for the system is provided by 5 U.S.C. 301; and 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 
is publishing separately in the Federal Register a notice of a system 
of records entitled Treasury/Customs .213 Seized Assets and Case 
Tracking System (SEACATS). This system of records will assist 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

[[Page 1153]]

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 is proposing to exempt the Seized Asset and 
Case Tracking System (SEACATS) 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 
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 
proposes to exempt the Seized Asset and Case Tracking System (SEACATS) 
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), 
(e)(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)(2) does not 
apply to the Seized Asset and Case Tracking System (SEACATS), the 
Commissioner of Customs exempts the Seized Asset and Case Tracking 
System (SEACATS) 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 Seized Asset and Case 
Tracking System (SEACATS) 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 offices 
supplying information to the Office of Information and Technology to 
carry out their investigation, 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 Seized Asset and Case Tracking 
System (SEACATS) would compromise the ability of the Office of 
Information and Technology to provide useful tactical and strategic 
information to law enforcement agencies. Permitting access to records 
contained in the Seized Asset and Case Tracking System (SEACATS) 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 investigative 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 of 
Information and Technology to carry out its mandate. Furthermore, 
providing access to records contained in the Seized Asset and Case 
Tracking System (SEACATS) 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 
Seized Asset and Case Tracking System (SEACATS) 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 
Information and Technology 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 Seized 
Asset and Case Tracking System (SEACATS) 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 Seized Asset 
and Case Tracking System (SEACATS).
    (4) 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 
Seized Asset and Case Tracking System (SEACATS). 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

[[Page 1154]]

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 Seized Asset and Case Tracking System (SEACATS) 
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 Customs' information 
gathering and analysis systems and permit violators to take steps to 
avoid detection or apprehension.
    (5) 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 Seized Asset 
and Case Tracking System (SEACATS) 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 Seized 
Asset and Case Tracking System (SEACATS).
    (6) Under 5 U.S.C. 552a(e)(4)(I) 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 Seized Asset and Case Tracking System (SEACATS) 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 cited system 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 Seized 
Asset and Case Tracking System (SEACATS) 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 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 Seized Asset and Case Tracking System (SEACATS) should 
be exempted from this provision to avoid impairing the ability of the 
Office of Information and Technology 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''

[[Page 1155]]

and ``disseminate'', application of this provision to the Seized Asset 
and Case Tracking System (SEACATS) 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 SEACATS 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 
Seized Asset and Case Tracking System (SEACATS) 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 Seized Asset and Case Tracking System 
(SEACATS) 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 Seized Asset and Case Tracking System (SEACATS), since 
there are civil remedies for failure to comply with provisions from 
which SEACATS is exempted. Exemption from this provision will also 
protect the Seized Asset and Case Tracking System from baseless civil 
court actions that might hamper its ability to collate, analyze, and 
disseminate investigative intelligence and law enforcement data.
    Consideration will be given to any written comments timely 
submitted to Customs. Comments submitted will be available for public 
inspection in accordance with the Freedom of Information Act (5 U.S.C. 
552), 1.4 Treasury Department Regulations (31 CFR 1.4), Customs 
Regulations (19 CFR 103.11(b)), on regular business days between the 
hours of 9:00 a.m. and 4:30 p.m. at the Office of Regulations and 
Rulings, 1300 Pennsylvania Avenue, NW., Washington, DC.
    After consideration of the comments received, notice will be given 
concerning the exempt status of the system of records. If the 
Department finally exempts as herein proposed, a conforming amendment 
to 31 CFR 1.36 will also be published.
    As required by Executive Order 12866, it has been determined that 
this proposed rule is not a significant regulatory action and, 
therefore, does not require a regulatory impact analysis.
    Pursuant to the requirements of the Regulatory Flexibility Act, 5 
U.S.C. 601-612, it is hereby certified that this rule will not have 
significant economic impact on a substantial number of small entities.
    In accordance with the provisions of the Paperwork Reduction Act of 
1995, the Department of the Treasury has determined that this proposed 
rule would not impose new recordkeeping, application, reporting, or 
other types of information collection requirements.

List of Subjects in 31 CFR Part 1

    Privacy.

    Part 1 of Title 31 of the Code of Federal Regulations is amended as 
follows:

PART 1--[AMENDED]

    1. The authority citation for part 1 continues to read as follows:

    Authority: 5 U.S.C. 301 and 31 U.S.C. 321. Subpart A also issued 
under 5 U.S.C. 522 as amended. Subpart C also issued under 5 U.S.C. 
552a.


Sec. 1.36  [Amended]

    2. Section 1.36 of Subpart C is amended by adding the following 
text in numerical order in paragraphs a.1. and b.1. under the heading 
UNITED STATES CUSTOMS SERVICE:
* * * * *
    a. * * *
    1. * * *
* * * * *
    00.213--Seized Asset and Case Tracking System (SEACATS)
* * * * *
    b. * * *
    1. * * *
* * * * *
    00.213--Seized Asset and Case Tracking System (SEACATS)
* * * * *
    Dated: November 19, 1998.
Shelia Y. McCann,
Deputy Assistant Secretary (Administration).
[FR Doc. 99-355 Filed 1-7-99; 8:45 am]
BILLING CODE 4820-02-P