[Federal Register Volume 67, Number 251 (Tuesday, December 31, 2002)]
[Rules and Regulations]
[Pages 79858-79859]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-33005]


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POSTAL SERVICE

39 CFR Part 266


Revision of Regulations To Exempt Privacy Act System of Records

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: The U.S. Postal Service is amending its regulations 
implementing the Privacy Act of 1974, 5 U.S.C. 552a.

[[Page 79859]]

The amendment modifies existing regulations at 39 CFR 266.9 to exempt 
system of records, USPS 050.080, Finance Records--Suspicious 
Transaction Reports, from certain provisions of the Privacy Act and 
corresponding regulations.

DATES: This rule is effective December 31, 2002.

FOR FURTHER INFORMATION CONTACT: Henry Gibson, (202) 268-4203.

SUPPLEMENTARY INFORMATION: The Postal Service published a proposed rule 
on December 27, 2000, to amend 39 CFR 266.9 to apply certain Privacy 
Act exemptions to Privacy Act systems of records 050.080. Pursuant to 
the Bank Secrecy Act, 31 U.S.C. 5318(g), anti-money laundering 
provisions, and implementing regulations of the U.S. Treasury, 31 CFR 
part 103, the Postal Service is required to report to the Department of 
the Treasury certain suspicious financial transactions that are 
relevant to a possible violation of law or regulation. Further, the 
Postal Service is prohibited from notifying any participant in the 
transaction that a report has been made. 31 U.S.C. 5318(g)(2).
    In order to permit compliance with the non-notification requirement 
of the Bank Secrecy Act, the Postal Service is adopting an exemption 
from the Privacy Act provisions related to individual access. 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) of this section.'' Comments on the proposed rule were 
due on or before January 26, 2001. We did not receive any comments. 
Therefore, the rule is adopted as final without change.
    The Postal Service is hereby giving notice of a final rule to 
exempt the Suspicious Transaction Report system from certain provisions 
of the Privacy Act pursuant to 5 U.S.C. 552a(k)(2). The reasons for 
exempting the system of records from sections (c)(3), (d), (e)(1), 
(e)(4)(G), (e)(4)(H), (e)(4)(I), and (f) of the Privacy Act are set 
forth in the proposed rule.

List of Subjects in 39 CFR Part 266

    Privacy.

    For the reasons set out in the preamble, the Postal Service is 
amending part 266 of 39 CFR as follows:

PART 266--PRIVACY OF INFORMATION

    1. The authority citation for part 266 continues to read as 
follows:

    Authority: 39 U.S.C. 401; 5 U.S.C. 552a.

    2. Section 266.9 is amended by adding paragraph (b)(7) to read as 
follows:
* * * * *
    (b) * * *
    (7) Finance Records--Suspicious Transaction Reports, USPS 050.080. 
This system is exempt from 5 U.S.C. 552a (c)(3), (d)(1) through (4), 
(e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f) to the extent that 
information in the system is subject to exemption pursuant to 5 U.S.C. 
552a(k)(2) as material compiled for law enforcement purposes. The 
reasons for exemption follow.
    (i) Disclosure to the record subject pursuant to subsections (c)(3) 
through (d)(1) through (4) would violate the non-notification provision 
of the Bank Secrecy Act, 31 U.S.C. 5318(g)(2), under which the Postal 
Service is prohibited from notifying a transaction participant that a 
suspicious transaction report has been made. In addition, the access 
provisions of subsections (c)(3) and (d) would alert individuals that 
they have been identified as suspects or possible subjects of 
investigation and thus seriously hinder the law enforcement purposes 
underlying the suspicious transaction reports.
    (ii) This system is in compliance with subsection (e)(1), because 
maintenance of the records is required by law. Strict application of 
the relevance and necessity requirements of subsection (e)(1) to 
suspicious transactions would be impractical, however, because the 
relevance or necessity of specific information can often be established 
only after considerable analysis and as an investigation progresses.
    (iii) The requirements of subsections (e)(4)(G), (H), and (I) and 
subsection (f) do not apply because this system is exempt from the 
individual access and amendment provisions of subsection (d). 
Nevertheless, the Postal Service has published notice of the record 
source categories and the notification, access, and contest procedures.
    An appropriate revision of 39 CFR 266.9 to reflect the final change 
will be published.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 02-33005 Filed 12-30-02; 8:45 am]
BILLING CODE 7710-12-P