[Federal Register Volume 72, Number 99 (Wednesday, May 23, 2007)]
[Rules and Regulations]
[Pages 28851-28854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-9966]


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FEDERAL TRADE COMMISSION

16 CFR Part 4


Access Requests From Foreign Law Enforcement Agencies for 
Consumer Protection Materials

AGENCY: Federal Trade Commission.

ACTION: Final rule amendment.

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SUMMARY: The Federal Trade Commission is amending Rule 4.11 of its 
Rules of Practice, which addresses disclosure requests, to add a new 
provision, Rule 4.11(j). The new provision conforms the agency's rules 
to its authority to share confidential information in non-antitrust 
matters with foreign law enforcers, with appropriate confidentiality 
assurances and subject to certain restrictions, as provided for under 
the recently-enacted U.S. SAFE WEB Act of 2006, Pub. L. No. 109-455, 
120 Stat. 3372 (2006). The Commission is also amending Rules 4.10(d) 
and (e), which describe certain materials subject to prohibitions on 
disclosures and exceptions for specified circumstances, to cross-
reference the new Rule 4.11(j).

DATES: Effective Date: May 23, 2007.

FOR FURTHER INFORMATION CONTACT: Joannie T. Wei, Attorney, Office of 
the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue, 
NW., Washington, DC 20580, (202) 326-2840, [email protected].

SUPPLEMENTARY INFORMATION: The Undertaking Spam, Spyware and Fraud 
Enforcement With Enforcers beyond Borders Act of 2006 (U.S. SAFE WEB 
Act), Pub. L. No. 109-455, 120 Stat. 3372 (2006), was enacted to 
enhance the Federal Trade Commission's enforcement activities against a 
range of practices that harm U.S. consumers, including illegal spam, 
spyware, cross-border fraud and deception, misleading health and safety 
advertising, privacy and security breaches, and other law violations. 
The practices the FTC enforces against are increasingly global in 
nature, and the U.S. SAFE WEB Act improves the FTC's ability to 
cooperate with its foreign counterparts to combat such practices.
    Authority to share certain materials with foreign law enforcement 
agencies. Information sharing is one area in which the U.S. SAFE WEB 
Act strengthens the

[[Page 28852]]

Commission's authority to cooperate with its foreign counterparts. 
Sections 4 and 6 of the U.S. SAFE WEB Act amend sections 6(f) and 
21(b)(6) of the Federal Trade Commission Act to allow the Commission to 
share certain confidential and compelled information in its files with 
foreign law enforcement agencies.\1\ 15 U.S.C. 46(f), 57b-2(b)(6). 
These sections of the U.S. SAFE WEB Act do not provide authority for 
the disclosure of material obtained in connection with the 
administration of the Federal antitrust laws or foreign antitrust laws 
(as defined in paragraphs (5) and (7), respectively, of section 12 of 
the International Antitrust Enforcement Assistance Act of 1994 (15 
U.S.C. 6211)). 15 U.S.C. 57b-2(b)(6).
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    \1\ ``Foreign law enforcement agency'' means--(1) any agency or 
judicial authority of a foreign government, including a foreign 
state, a political subdivision of a foreign state, or a 
multinational organization constituted by and comprised of foreign 
states, that is vested with law enforcement or investigate authority 
in civil, criminal, or administrative matters; and (ii) any 
multinational organization, to the extent that it is acting on 
behalf of an entity described in paragraph (i). 15 U.S.C. 44.
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    The Commission's disclosure authority under the U.S. SAFE WEB Act 
is subject to appropriate limitations and assurances. Under section 6 
of the statute, the Commission must obtain certification from an 
appropriate official of the foreign law enforcement agency, either by 
prior agreement or memorandum of understanding or by other written 
certification, that such material will be maintained in confidence and 
will only be used for official law enforcement purposes. 15 U.S.C. 57b-
2(b)(6). The foreign law enforcement agency must have set forth a bona 
fide legal basis for its authority to maintain the material in 
confidence. In addition, the foreign law enforcement agency must be 
using the materials for purposes of investigating or engaging in 
enforcement proceedings related to possible violations of: (1) Foreign 
laws prohibiting fraudulent or deceptive practices or other practices 
substantially similar to practices prohibited by any law administered 
by the Commission; (2) a law administered by the Commission if 
disclosure would further a Commission investigation or proceeding; or 
(3) with the approval of the Attorney General, other foreign criminal 
laws that are encompassed in an applicable mutual legal assistance 
treaty. 15 U.S.C. 57b-2(b)(6)(A), 57b-2(b)(6)(B).
    If the materials to be provided to the foreign law enforcement 
agency are requested for the purpose of investigating or engaging in 
enforcement proceedings based on possible violations by a bank, savings 
and loan institution, or Federal credit union, the material will not be 
disclosed unless the appropriate Federal banking agency, or the 
National Credit Union Administration in the case of a Federal credit 
union, has given its prior approval. 15 U.S.C. 57b-2(b)(6)(C).
    Further, section 6 of the U.S. SAFE WEB Act does not permit 
disclosure to foreign law enforcement agencies from foreign states that 
the Secretary of State has determined, in accordance with section 6(j) 
of the Export Administration Act of 1979, 50 U.S.C. App. 2405, have 
repeatedly provided support for acts of international terrorism, unless 
and until such determination has been rescinded pursuant to section 
6(j)(4) of that Act, 50 U.S.C. App. 2405(j)(4).
    Rule provisions. To implement this new authority under the U.S. 
SAFE WEB Act, the Commission's Rules of Practice have been amended to 
create a new provision, Rule 4.11(j), that delineates the internal 
procedure for handling requests from foreign law enforcement agencies 
for nonpublic material other than material subject to disclosure 
pursuant to other delegations. Rule 4.11(j) is not intended to 
supersede existing Commission delegations or to preclude additional 
future delegations, subject to any statutory constraints.
    The new provision, Rule 4.11(j), generally adopts the procedures of 
the current Rule 4.11(c) (sharing confidential information with Federal 
and State law enforcement agencies), and incorporates the requirements 
and restrictions of the U.S. SAFE WEB Act. Under the new provision, 
requests for nonpublic records from foreign law enforcement agencies 
will be addressed to the Director of the Office of International 
Affairs or the Director's designee. For any material requested that is 
subject to the disclosure restrictions in sections 6(f) \2\ or 21(b) 
\3\ of the FTC Act or Rule 4.10(d) of the Commission's Rules of 
Practice,\4\ the Director or the Director's designee will obtain any 
certification required by the U.S. SAFE WEB Act from an appropriate 
official of such foreign law enforcement agency. Rule 4.11(j)(3) 
establishes the requirements for access to such material in accordance 
with the U.S. SAFE WEB Act. The Director will then, with approval of 
the Bureau of Consumer Protection, forward the requests to the General 
Counsel with recommendations for disposition. The General Counsel or 
the General Counsel's designee is delegated the authority to dispose of 
the requests in accordance with the requirements of the U.S. SAFE WEB 
Act. Under Rule 4.11(j), the General Counsel may refer such requests to 
the Commission for determination, and must do so when the Bureau of 
Consumer Protection or the Office of International Affairs do not agree 
with the General Counsel's proposed disposition.
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    \2\ Section 6(f) of the FTC Act protects from public disclosure 
``any trade secret or any commercial or financial information which 
is obtained from any person and which is privileged or 
confidential,'' except in certain specified circumstances. 15 U.S.C. 
46(f).
    \3\ Section 21(b) of the FTC Act protects from public disclosure 
material received by the Commission ``pursuant to compulsory process 
in an investigation, a purpose of which is to determine whether any 
person may have violated any provision of the laws administered by 
the Commission,'' except in certain specified circumstances. 15 
U.S.C. 57b-2(b).
    \4\ In addition to the two categories listed above, Rule 4.10(d) 
also protects from mandatory disclosure under the Freedom of 
Information Act, 5 U.S.C. 552, material submitted to the Commission 
voluntarily in lieu of compulsory process in a law enforcement 
investigation and marked or otherwise identified as confidential. 16 
CFR 4.10(d).
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    The Commission has also amended Rules 4.10(d) and (e) of its Rules 
of Practice, which describe materials that the Commission generally 
cannot make public at all or can make public only after finding the 
material is not confidential and giving ten days' notice to the 
submitter. These provisions also set forth exceptions to these 
restrictions, including, inter alia, certain disclosures to Federal and 
State law enforcement agencies. Rules 4.10(d) and (e) have been amended 
to include disclosure to foreign law enforcement agencies pursuant to 
the new Rule 4.11(j) as a specifically stated exception.
    The amendments to Rules 4.10(d) and (e) and Rule 4.11(j)(3) will 
apply to all material that is subject to the disclosure restrictions in 
sections 6(f) and 21(b) of the FTC Act or in Rule 4.10(d) of the 
Commission's Rules of Practice, and that was submitted to the 
Commission on or after December 22, 2006, the date of enactment of the 
U.S. SAFE WEB Act.
    Procedural matters. These amendments adopted herein will reconcile 
the Commission's rules with existing agency memoranda of understanding 
(MOUs), under which the Commission has an obligation to use its best 
efforts to share relevant consumer protection law enforcement material 
requested by applicable foreign agencies to the extent consistent with 
national laws, international obligations, enforcement policies and 
other important interests. Under these MOUs, the Commission has the 
implied obligation to implement any internal procedures required to 
allow the Commission to take into account all applicable laws, 
including the new U.S. SAFE WEB Act authority, in processing and 
considering applicable foreign

[[Page 28853]]

agency requests for information. Because failure to make the proposed 
amendments would impair the Commission's ability to meet its foreign 
obligations, the amendments are exempt, by virtue of the foreign 
affairs exemption to the Act, 5 U.S.C. 553(a)(1), from both the 
Administrative Procedure Act's notice and comment requirement, 5 U.S.C. 
553(b), and its restriction on the rules' effective date, 5 U.S.C. 
553(d).
    These amendments are also exempt from the notice and comment 
requirement and effective date restriction of the Commission's Rules of 
Practice by virtue of the good cause exceptions in Rules 1.26(b) and 
1.26(e). 16 CFR 1.26(b), (e). In these circumstances, providing a 
period of public comment would delay implementation of these rules and 
is both unnecessary and contrary to the public interest.\5\
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    \5\ See Int'l Brotherhood of Teamsters v. Pe[ntilde]a, 17 F. 3d 
1478 (D.C. Cir. 1994) (applying APA foreign affairs exemption and 
good cause exception of agency rule).
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    Finally, these amendments are not a collection of information for 
purposes of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and 
are not subject to the requirements of the Regulatory Flexibility Act, 
5 U.S.C. 601(2).

List of Subjects in 16 CFR Part 4

    Administrative practice and procedure, Freedom of Information Act, 
Sunshine Act.


0
For the reasons set forth in the preamble, the Federal Trade Commission 
amends Title 16, chapter I, subchapter A, of the Code of Federal 
Regulations as follows:

Subchapter A--Organization, Procedures, And Rules Of Practice

PART 4--MISCELLANEOUS RULES

0
1. The authority citation for part 4 continues to read as follows:

    Authority: 15 U.S.C. 46, unless otherwise noted.


0
2. Amend Sec.  4.10 by revising paragraphs (d) and (e) to read as 
follows:


Sec.  4.10  Nonpublic material.

* * * * *
    (d) Except as provided in paragraphs (f) or (g) of this section or 
in Sec.  4.11(b), (c), (d), (i), or (j), no material that is marked or 
otherwise identified as confidential and that is within the scope of 
Sec.  4.10(a)(8), and no material within the scope of Sec.  4.10(a)(9) 
that is not otherwise public, will be made available without the 
consent of the person who produced the material, to any individual 
other than a duly authorized officer or employee of the Commission or a 
consultant or contractor retained by the Commission who has agreed in 
writing not to disclose the information. All other Commission records 
may be made available to a requester under the procedures set forth in 
Sec.  4.11 or may be disclosed by the Commission except where 
prohibited by law.
    (e) Except as provided in paragraphs (f) or (g) of this section or 
in Sec.  4.11(b), (c), (d), (i), or (j), material not within the scope 
of Sec.  4.10(a)(8) or Sec.  4.10(a)(9) that is received by the 
Commission and is marked or otherwise identified as confidential may be 
disclosed only if it is determined that the material is not within the 
scope of Sec.  4.10(a)(2), and the submitter is provided at least ten 
days notice of the intent to disclose the material.
* * * * *

0
3. Amend Sec.  4.11 by adding a new paragraph (j) to the end that reads 
as follows:


Sec.  4.11  Disclosure requests.

* * * * *
    (j)(1) The procedures specified in this section apply to 
disclosures of certain records to foreign law enforcement agencies in 
specified circumstances in accordance with the U.S. SAFE WEB Act of 
2006. Nothing in this section authorizes the disclosure of material 
obtained in connection with the administration of the Federal antitrust 
laws or foreign antitrust laws, as defined in paragraph (j)(5)(i) of 
this section.
    (2) Requests from foreign law enforcement agencies, as defined in 
paragraph (j)(5)(ii) of this section, for nonpublic records shall be 
addressed to the Director of the Office of International Affairs or the 
Director's designee, who shall forward them to the General Counsel with 
recommendations for disposition after obtaining any required 
certification described in paragraph (j)(3) of this section and 
approval of the Bureau of Consumer Protection. With respect to requests 
under this paragraph, the General Counsel or the General Counsel's 
designee is delegated the authority to dispose of them. Alternatively, 
the General Counsel may refer such requests to the Commission for 
determination, except that requests must be referred to the Commission 
for determination where the Bureau of Consumer Protection or the Office 
of International Affairs disagrees with the General Counsel's proposed 
disposition.
    (3) Access under this section to any material subject to the 
disclosure restrictions in sections 6(f) or 21(b) of the FTC Act or 
Sec.  4.10(d) may not be granted unless--
    (i) An appropriate official of the foreign law enforcement agency 
has certified, either by prior agreement or memorandum of understanding 
or by other written certification, that such material will be 
maintained in confidence and will be used only for official law 
enforcement purposes; and
    (ii)(A) The foreign law enforcement agency has set forth a bona 
fide legal basis for its authority to maintain the material in 
confidence;
    (B) The materials are to be used for purposes of investigating, or 
engaging in enforcement proceedings related to, possible violations of:
    (1) Foreign laws prohibiting fraudulent or deceptive commercial 
practices, or other practices substantially similar to practices 
prohibited by any law administered by the Commission;
    (2) A law administered by the Commission, if disclosure of the 
material would further a Commission investigation or enforcement 
proceeding; or
    (3) With the approval of the Attorney General, other foreign 
criminal laws, if such foreign criminal laws are offenses defined in or 
covered by a criminal mutual legal assistance treaty in force between 
the government of the United States and the foreign law enforcement 
agency's government;
    (C) The appropriate Federal banking agency, (as defined in section 
3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)) or, in 
the case of a Federal credit union, the National Credit Union 
Administration has given its prior approval if the materials to be 
provided under paragraph (j)(3)(ii)(B) of this section are requested by 
the foreign law enforcement agency for the purpose of investigating, or 
engaging in enforcement proceedings based on, possible violations of 
law by a bank, a savings and loan institution described in section 
18(f)(3) of the Federal Trade Commission Act (15 U.S.C. 57a(f)(3)), or 
a Federal credit union described in section 18(f)(4) of the Federal 
Trade Commission Act (15 U.S.C. 57a(f)(4)); and
    (D) The foreign law enforcement agency is not from a foreign state 
that the Secretary of State has determined, in accordance with section 
6(j) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)), 
has repeatedly provided support for acts of international terrorism, 
unless and until such determination is rescinded pursuant to section 
6(j)(4) of that Act (50 U.S.C. App. 2405(j)(4)).
    (4) A copy of the certificate described in paragraph (j)(3) of this 
section will be forwarded to the submitter of the

[[Page 28854]]

information at the time the request is granted unless the foreign law 
enforcement agency requests that the submitter not be notified.
    (5) For purposes of this section:
    (i) ``Federal antitrust laws'' and ``foreign antitrust laws'' are 
to be interpreted as defined in paragraphs (5) and (7), respectively, 
of section 12 of the International Antitrust Enforcement Assistance Act 
of 1994 (15 U.S.C. 6211); and
    (ii) ``Foreign law enforcement agency'' is defined as:
    (A) Any agency or judicial authority of a foreign government, 
including a foreign state, a political subdivision of a foreign state, 
or a multinational organization constituted by and comprised of foreign 
states, that is vested with law enforcement or investigative authority 
in civil, criminal, or administrative matters and
    (B) Any multinational organization, to the extent that it is acting 
on behalf of an entity described in paragraph (j)(5)(i)(A) of this 
section.

    By direction of the Commission.
Donald S. Clark,
Secretary.
 [FR Doc. E7-9966 Filed 5-22-07; 8:45 am]
BILLING CODE 6750-01-P