[Federal Register Volume 70, Number 11 (Tuesday, January 18, 2005)]
[Rules and Regulations]
[Pages 2805-2806]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-916]


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DEPARTMENT OF THE TREASURY

31 CFR Part 1


Privacy Act of 1974; Implementation

AGENCY: Internal Revenue Service, Treasury.

ACTION: Final rule.

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SUMMARY: In accordance with the requirements of the Privacy Act of 
1974, as amended, the Department of the Treasury exempts a new Internal 
Revenue Service (IRS) system of records entitled ``IRS 42.031--Anti-
Money Laundering/Bank Secrecy Act (BSA) and Form 8300 Records'' from 
certain provisions of the Privacy Act.

EFFECTIVE DATE: January 18, 2005.

FOR FURTHER INFORMATION CONTACT: IRS National Anti-Money Laundering 
Program Manager, S: C: CP: RE: AML, 19th Floor, 1601 Market Street, 
Philadelphia, PA 19106, phone (215) 861-1547.

SUPPLEMENTARY INFORMATION: The IRS published a notice of proposed 
rulemaking on April 30, 2004 at 69 FR 23705-23706 exempting the new 
system of records from certain provisions of the Privacy Act of 1974, 
as amended. The IRS published the proposed system notice in its 
entirety at 69 FR 23854 on April 30, 2004. No comments were received by 
the IRS.
    Under 5 U.S.C. 552a(k)(2), the head of an agency may promulgate 
rules to exempt any system of records within the agency from certain 
provisions of the Privacy Act if the system is investigatory material 
compiled for law enforcement purposes. The exemption is from provisions 
552a(c)(3), (d), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f) 
because the system contains investigatory material compiled for law 
enforcement purposes. The following are the reasons why this system of 
records maintained by the IRS is exempt pursuant to 5 U.S.C. 552a(k)(2) 
of the Privacy Act of 1974.
    (1) 5 U.S.C. 552a(c)(3). This provision of the Privacy Act provides 
for the release of the disclosure accounting required by 5 U.S.C. 
552a(c) (1) and (2) to the individual named in the record at his/her 
request. The reasons for exempting this system of records from the 
foregoing provision is:
    (i) The release of disclosure accounting would put the subject of 
an investigation on notice that an investigation exists and that such 
person is the subject of that investigation.
    (ii) Such release would provide the subject of an investigation 
with an accurate accounting of the date, nature, and purpose of each 
disclosure and the name and address of the person or agency to which 
disclosure was made. The release of such information to the subject of 
an investigation would provide the subject with significant information 
concerning the nature of the investigation and could result in the 
altering or destruction of documentary evidence, the improper 
influencing of witnesses, and other activities that could impede or 
compromise the investigation.
    (iii) Release to the individual of the disclosure accounting would 
alert the individual as to which agencies were investigating the 
subject and the scope of the investigation and could aid the individual 
in impeding or compromising investigations by those agencies.
    (2) 5 U.S.C. 552a(d), (e)(4)(G), (e)(4)(H), and (f). These 
provisions of the Privacy Act relate to an individual's right to be 
notified of the existence of records pertaining to such individual; 
requirements for identifying an individual who requested access to 
records, the agency procedures relating to access to records and the 
content of the information contained in such records and the civil 
remedies available to the individual in the event of adverse 
determinations by an agency concerning access to or amendment of 
information contained in record systems. The reasons for exempting this 
system of records from the foregoing provisions are as follows: To 
notify an individual at the individual's request of the existence of an 
investigative file pertaining to such individual or to grant access to 
an investigative file pertaining to such individual could interfere 
with investigative and enforcement proceedings; deprive co-defendants 
of a right to a fair trial or an impartial adjudication; constitute an 
unwarranted invasion of the personal privacy of others; disclose the 
identity of confidential sources and reveal confidential information 
supplied by such sources; and, disclose investigative techniques and 
procedures.
    (3) 5 U.S.C. 552a(e)(1). This provision of the Privacy Act requires 
each agency to 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 
reasons for exempting this system of records from the foregoing are as 
follows:
    (i) The IRS will limit the Anti-Money Laundering/Bank Secrecy Act 
(BSA) and Form 8300 Records to those relevant and necessary for 
identifying, monitoring, and responding to

[[Page 2806]]

complaints, allegations and other information received concerning 
violations or potential violations of the anti-money laundering 
provisions of Title 31 and Title 26 laws. However, an exemption from 
the foregoing is needed because, particularly in the early stages of an 
investigation, it is not possible to determine the relevance or 
necessity of specific information.
    (ii) Relevance and necessity are questions of judgment and timing. 
What appears relevant and necessary when first received may 
subsequently be determined to be irrelevant or unnecessary. It is only 
after the information is evaluated that the relevance and necessity of 
such information can be established with certainty.
    (4) 5 U.S.C. 552a(e)(4)(I). This provision of the Privacy Act 
requires the publication of the categories of sources of records in 
each system of records. The reasons an exemption from this provision 
has been claimed are as follows:
    (i) Revealing categories of sources of information could disclose 
investigative techniques and procedures;
    (ii) Revealing categories of sources of information could cause 
sources that supply information to investigators to refrain from giving 
such information because of fear of reprisal, or fear of breach of 
promises of anonymity and confidentiality.
    As required by Executive Order 12866, it has been determined that 
this rule is not a significant regulatory action, and therefore, does 
not require a regulatory impact analysis.
    The regulation will not have a substantial direct effect on the 
States, on the relationship between the Federal Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, it is determined that this 
rule does not have federalism implications under Executive Order 13132.
    Pursuant to the requirements of the Regulatory Flexibility Act, 5 
U.S.C. 601-612, it is hereby certified that these regulations will not 
significantly affect a substantial number of small entities. The rule 
imposes no duties or obligations on small entities.
    In accordance with the provisions of the Paperwork Reduction Act of 
1995, the Department of the Treasury has determined that this rule 
would not impose new recordkeeping, application, reporting, or other 
types of information collection requirements.

List of Subjects in 31 CFR Part 1

    Privacy.


0
Part 1, subpart C of title 31 of the Code of Federal Regulations is 
amended as follows:

PART 1--[AMENDED]

0
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. 552 as amended. Subpart C also issued under 5 U.S.C. 
552a.


0
2. Section 1.36 paragraph (g)(1)(viii) is amended by adding the 
following text to the table in numerical order.


Sec.  1.36  Systems exempt in whole or in part from provisions of 5 
U.S.C. 522a and this subpart.

* * * * *
    (g) * * *
    (1) * * *
    (viii) * * *

------------------------------------------------------------------------
                  Number                           Name of  system
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                                * * * * *
IRS 42.031................................  Anti-Money Laundering/Bank
                                             Secrecy Act BSA) and Form
                                             8300 Records.
 
                                * * * * *
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* * * * *

    Dated: December 22, 2004.
Arnold I. Havens,
General Counsel.
[FR Doc. 05-916 Filed 1-14-05; 8:45 am]
BILLING CODE 4830-01-P