[Federal Register Volume 75, Number 244 (Tuesday, December 21, 2010)]
[Rules and Regulations]
[Pages 79947-79949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32000]
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Rules and Regulations
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Federal Register / Vol. 75, No. 244 / Tuesday, December 21, 2010 /
Rules and Regulations
[[Page 79947]]
DEPARTMENT OF HOMELAND SECURITY
Office of the Secretary
6 CFR Part 5
[Docket No. DHS-2010-0089]
Privacy Act of 1974: Implementation of Exemptions; Department of
Homeland Security/ALL-031 Information Sharing Environment Suspicious
Activity Reporting Initiative System of Records
AGENCY: Privacy Office, DHS.
ACTION: Final rule.
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SUMMARY: The Department of Homeland Security is issuing a final rule to
amend its regulations to exempt portions of a newly established system
of records titled, ``Department of Homeland Security/ALL-031
Information Sharing Environment Suspicious Activity Reporting
Initiative System of Records'' from certain provisions of the Privacy
Act. Specifically, the Department exempts portions of the ``Department
of Homeland Security/ALL-031 Information Sharing Environment Suspicious
Activity Reporting Initiative System of Records'' from one or more
provisions of the Privacy Act because of criminal, civil, and
administrative enforcement requirements.
DATES: Effective Date: This final rule is effective December 21, 2010.
FOR FURTHER INFORMATION CONTACT: For general questions please contact:
Ronald Athmann (202-447-4332), Office of Intelligence and Analysis,
Department of Homeland Security, Washington, DC 20528. For privacy
issues please contact: Mary Ellen Callahan (703-235-0780), Chief
Privacy Officer, Privacy Office, Department of Homeland Security,
Washington, DC 20528.
SUPPLEMENTARY INFORMATION:
Background
The Department of Homeland Security (DHS) published a notice of
proposed rulemaking in the Federal Register, 75 FR 55290, September 10,
2010, proposing to exempt portions of the system of records from one or
more provisions of the Privacy Act because of criminal, civil, and
administrative enforcement requirements. The system of records is the
DHS/ALL-031 Information Sharing Environment (ISE) Suspicious Activity
Reporting (SAR) Initiative System of Records. The DHS/ALL-031 ISE-SAR
Initiative system of records notice was published concurrently in the
Federal Register, 75 FR 55335, September 10, 2010, and comments were
invited on both the notice of proposed rulemaking (NPRM) and system of
records notice (SORN).
Public Comments
DHS received four comments on the NPRM. One commenter submitted the
same set of comments for both the NPRM and the SORN.
All four comment submissions were in support of the DHS ISE-SAR
Initiative and the proposed exemptions to the Privacy Act. One of the
four commenters, BITS, a membership organization comprised of financial
intuitions and financial-services vendors who own, operate, and/or
develop critical infrastructure information systems, requested
clarification on the scope of the ISE-SAR Initiative and the potential
use of SAR filed by financial institutions and the proposed public-
private partnership. In addition, the organization commented on the
application of Freedom of Information Act (FOIA) exemptions
particularly to any potential plans to collect cybersecurity
information from private entities regarding cyber attacks. Lastly, the
organization requested that the Department consider providing
protections to private sector regulated entities that submit ISE-SARs
to DHS.
BITS Comment: It is our understanding that the purpose of the DHS-
ALL/031 ISE-SAR Initiative System of Records is to create a database of
physical security threats and would not include the Bank Secrecy Act
(BSA) related SARs filed with FinCEN. The ISE-Functional Standards do
not expressly exclude BSA-related SARs, but the ISE Functional
Standards restrict the scope of a SAR to ``official documentation of
observed behavior reasonably indicative of pre-operational planning
related to terrorism or other criminal activity.'' Likewise, the ISE-
Functional Standards guidance criteria for determining whether a SAR
constitutes an ISE-SAR, does not embrace financial crimes. Given these
parameters, BITS questions whether BSA-related SARs may be included in
the ISE-SARs database because of their potential nexus to terrorism
information, as defined in the Intelligence Reform and Terrorism
Prevention Act (IRTPA).
BITS respectfully asks the Department to clarify whether the
proposed ISE-SARs database will include or exclude ISE-SARs filed
pursuant to the BSA and Anti-Money Laundering regulations. The
government's use of the classified sources and materials and aggregated
BSA data could provide Federal agencies with a rich source of
investigative leads relating to terrorism financing. These leads may
flag previously unidentified anomalous behavior that becomes suspicious
only when it is combined with aggregated investigative data sources,
such as FinCEN's database of cross-border electronic funds
transactions. BTS asks the Department to balance the potential benefits
of this broad interpretation with the potential privacy, operational,
and legal hazards.
Response: DHS participation in the Nationwide Suspicious Activity
Reporting Initiative (NSI), which is overseen by the Department of
Justice, adheres to the requirements established by the NSI requiring
participants to apply the ISE-SAR Functional Standard Version 1.5 in
determining whether a suspicious activity is an ISE-SAR. DHS would like
to clarify that suspicious activities that meet the ISE-SAR Functional
Standard Version 1.5 are not limited to physical security threats.
Further, DHS submission of ISE-SARs to the NSI Shared Space does not
explicitly exclude, nor does it include any specific category or source
of information; rather DHS submissions of ISE-SARs to the NSI Shared
Space adhere to the ISE-SAR Functional Standard Version 1.5. For
further clarification on the scope and application of the ISE-SAR
Functional Standard Version 1.5, DHS recommends that BITS reach out to
the NSI Program
[[Page 79948]]
Management Office and review materials available on the NSI Web site
available at http://nsi.ncirc.gov.
BITS Comment: BITS values the Department's commitment and efforts
to improve information-sharing of security threats between the public
and private sector. As partners with law enforcement, we have a long
history of positive collaboration with law enforcement officials in the
areas of cybersecurity, fraud, and money laundering. The financial
services industry has a vested interest in protecting the financial
system from illicit activities that could harm national security. As
such, we are interested in the Department's plan to make the ISE-SARs
available to ``federal departments and agencies, state, local, and
tribal law enforcement agencies, and the private sector.'' We hope the
Department will provide additional information about: (1) the
identities of the as-yet unnamed ``private sector'' partners or
industries who would have access to ISE-SARs; and (2) private-sector
and public law-enforcement credentialing requirements.
Response: DHS would like to clarify that DHS's contribution of ISE-
SARs to the NSI Shared Space will make this information available only
to authorized NSI participants. DHS does not maintain a list of private
sector partners or entities who are authorized NSI participants. As
previously noted, the NSI is not just a DHS initiative; it is overseen
by the Department of Justice and authorized participants may include
federal departments, state, local, and tribal law enforcement agencies,
and the private sector. Accordingly, DHS recommends that BITS reach out
to the Department of Justice NSI PMO regarding information on private
sector industries who would have access to the NSI Shared Space as well
as any requirements for becoming an authorized participant. Information
about NSI partners is available at the NSI Web site at https://nsi.ncirc.gov.
BITS Comment: We applaud the Department's promulgation of an
explicit exemption from certain parts of the Freedom of Information Act
(FOIA) for the ISE-SARs program, although we encourage the Department
to revisit the strength and application of the exemption, particularly
if the Department plans to collect cybersecurity information from
private entities regarding cyber attacks.
Because of the sensitivity and potential for severe damage
associated with reported cyber attacks and vulnerabilities, we hope the
Department will provide a blanket exemption from FOIA for ISE-SARs
filed by a private-sector entity reporting an information-security
related attack. A blanket FOIA exemption would further the Department's
goals of information-sharing because it would increase the likelihood
that institutions would voluntarily report suspected or confirmed cyber
attacks that are not required to be reported. In the past, institutions
have been reluctant to share information regarding suspected cyber
attacks because of the potential for endangering their customers and
their institutions. The creation of a standard, blanket exemption for
the identifying information of the reporting entity would eliminate the
reticence in the private sector and support more robust participation
levels.
Response: DHS would like to clarify that the NPRM is exempting the
DHS/ALL-031 ISE-SAR Initiative System of Records from certain portions
of the Privacy Act, not the FOIA, as commenter suggests. When DHS
processing either a Privacy Act or FOIA request, both applicable
Privacy Act and appropriate FOIA exemptions are applied. With respect
to applying FOIA exemptions, DHS applies FOIA exemptions available
under current law. The FOIA currently does not provide for a standard
``blanket exception'' for ISE-SARs data filed by a private-sector
entity reporting an information-security related attack. Nevertheless,
if DHS were to receive a FOIA request for such information, it would
apply applicable FOIA exemptions (e.g., Exemption 4 which applies to
trade secrets and commercial or financial information obtained from a
person that is privileged or confidential may apply in this instance).
BITS Comment: Given the likelihood that BSA-related ISE-SARs may be
aggregated into the ISE-SAR central data warehouse, we urge the
Department to consider providing a dual ``safe-harbor'' provision to
protect private-sector, regulated entities that submit reports to the
ISE-SAR database.
First, a safe harbor should be created to address the liabilities
associated with the provision of personally identifiable information to
the ISE. We understand that the Department will exercise the utmost
caution to protect the integrity of PII, but we also recognize that the
provision of PII in such a large scale to federal agencies or private
entities inevitably raises the specter of data compromise, identity
theft, and fraud. Thus, we respectfully request that entities providing
such PII in the requisite format be shielded from civil and criminal
liability arising from the provision of PII to the ISE-SAR database.
We also suggest the creation of a ``safe harbor'' to protect
prudentially regulated, private-sector entities (such as financial
institutions) who: (1) Are compliant with relevant federal regulations;
and (2) submit data to the ISE-SAR database in good faith, from adverse
regulatory findings based on conclusions resulting from governmental
use of the ISE-SAR database.
Response: DHS is one of many authorized NSI participants and
therefore cannot comment on whether a ``large scale of BSA-related ISE-
SARs'' will be included in the NSI Shared Space. To the extent DHS
enters in ISE-SAR data obtained from an external entity into the NSI
Shared Space, it will entail the use of the Summary ISE-SAR Information
format, which excludes privacy fields or data elements that contain PII
as identified in Section IV of the ISE-SAR Functional Standard. It is
believed the data contained within a Summary ISE-SAR Information format
will support sufficient trending and pattern recognition to trigger
further analysis and/or investigation where additional information can
be requested from the submitting organization. Accordingly, DHS does
not see the need to create a ``dual safe harbor provision'' as the
commenter suggests.
After consideration of public comments, the Department will
implement the rulemaking as proposed.
List of Subjects in 6 CFR Part 5
Freedom of information, Privacy.
0
For the reasons stated in the preamble, DHS amends Chapter I of Title
6, Code of Federal Regulations, as follows:
PART 5--DISCLOSURE OF RECORDS AND INFORMATION
0
1. The authority citation for part 5 continues to read as follows:
Authority: 6 U.S.C. 101 et seq.; Pub. L. 107-296, 116 Stat.
2135; 5 U.S.C. 301. Subpart A also issued under 5 U.S.C. 552.
Subpart B also issued under 5 U.S.C. 552a.
0
2. Add at the end of appendix C to part 5, the following new paragraph
``52'':
Appendix C to Part 5--DHS Systems of Records Exempt From the Privacy
Act
* * * * *
52. The DHS/ALL--031 ISE SAR Initiative System of Records
consists of electronic records and will be used by DHS and its
components. The DHS/ALL--031 ISE SAR Initiative System of Records is
a repository of information held by DHS in connection with its
several and varied missions and functions, including, but not
limited to the enforcement of civil and criminal laws;
investigations, inquiries, and proceedings there under;
[[Page 79949]]
national security and intelligence activities; and protection of the
President of the U.S. or other individuals pursuant to Section 3056
and 3056A of Title 18. The DHS/ALL--031 ISE SAR Initiative System of
Records contains information that is collected by, on behalf of, in
support of, or in cooperation with DHS, its components, as well as
other federal, state, local, tribal, or foreign agencies or private
sector organization and may contain personally identifiable
information collected by other federal, state, local, tribal,
foreign, or international government agencies. The Secretary of
Homeland Security has exempted this system from the following
provisions of the Privacy Act, subject to the limitations set forth
in 5 U.S.C. 552a(c)(3) and (4); (d); (e)(1), (e)(2), (e)(3),
(e)(4)(G), (e)(4)(H), (e)(4)(I), (e)(5), (e)(8), and (e)(12); (f);
(g)(1); and (h) of the Privacy Act pursuant to 5 U.S.C. 552a(j)(2).
Additionally, the Secretary of Homeland Security has exempted this
system from the following provisions of the Privacy Act, subject to
the limitation set forth in 5 U.S.C. 552a(c)(3); (d); (e)(1),
(e)(4)(G), (e)(4)(H), (e)(4)(I); and (f) of the Privacy Act pursuant
to 5 U.S.C. 552a(k)(2) and (k)(3). Exemptions from these particular
subsections are justified, on a case-by-case basis to be determined
at the time a request is made, for the following reasons:
(a) From subsection (c)(3) and (c)(4) (Accounting for
Disclosures) because release of the accounting of disclosures could
alert the subject of an investigation of an actual or potential
criminal, civil, or regulatory violation to the existence of that
investigation and reveal investigative interest on the part of DHS
as well as the recipient agency. Disclosure of the accounting would
therefore present a serious impediment to law enforcement efforts
and/or efforts to preserve national security. Disclosure of the
accounting would also permit the individual who is the subject of a
record to impede the investigation, to tamper with witnesses or
evidence, and to avoid detection or apprehension, which would
undermine the entire investigative process.
(b) From subsection (d) (Access to Records) because access to
the records contained in this system of records could inform the
subject of an investigation of an actual or potential criminal,
civil, or regulatory violation to the existence of that
investigation and reveal investigative interest on the part of DHS
or another agency. Access to the records could permit the individual
who is the subject of a record to impede the investigation, to
tamper with witnesses or evidence, and to avoid detection or
apprehension. Amendment of the records could interfere with ongoing
investigations and law enforcement activities and would impose an
unreasonable administrative burden by requiring investigations to be
continually reinvestigated. In addition, permitting access and
amendment to such information could disclose security-sensitive
information that could be detrimental to homeland security.
(c) From subsection (e)(1) (Relevancy and Necessity of
Information) because in the course of investigations into potential
violations of federal law, the accuracy of information obtained or
introduced occasionally may be unclear, or the information may not
be strictly relevant or necessary to a specific investigation. In
the interests of effective law enforcement, it is appropriate to
retain all information that may aid in establishing patterns of
unlawful activity.
(d) From subsection (e)(2) (Collection of Information from
Individuals) because requiring that information be collected from
the subject of an investigation would alert the subject to the
nature or existence of the investigation, thereby interfering with
that investigation and related law enforcement activities.
(e) From subsection (e)(3) (Notice to Subjects) because
providing such detailed information could impede law enforcement by
compromising the existence of a confidential investigation or reveal
the identity of witnesses or confidential informants.
(f) From subsections (e)(4)(G), (e)(4)(H), and (e)(4)(I) (Agency
Requirements) and (f) (Agency Rules), because portions of this
system are exempt from the individual access provisions of
subsection (d) for the reasons noted above, and therefore DHS is not
required to establish requirements, rules, or procedures with
respect to such access. Providing notice to individuals with respect
to existence of records pertaining to them in the system of records
or otherwise setting up procedures pursuant to which individuals may
access and view records pertaining to themselves in the system would
undermine investigative efforts and reveal the identities of
witnesses, and potential witnesses, and confidential informants.
(g) From subsection (e)(5) (Collection of Information) because
with the collection of information for law enforcement purposes, it
is impossible to determine in advance what information is accurate,
relevant, timely, and complete. Compliance with subsection (e)(5)
would preclude DHS agents from using their investigative training
and exercise of good judgment to both conduct and report on
investigations.
(h) From subsection (e)(8) (Notice on Individuals) because
compliance would interfere with DHS's ability to obtain, serve, and
issue subpoenas, warrants, and other law enforcement mechanisms that
may be filed under seal and could result in disclosure of
investigative techniques, procedures, and evidence.
(i) From subsection (e)(12) (Computer Matching) if the agency is
a recipient agency or a source agency in a matching program with a
non-Federal agency, with respect to any establishment or revision of
a matching program, at least 30 days prior to conducting such
program, publish in the Federal Register notice of such
establishment or revision.
(j) From subsection (g)(1) (Civil Remedies) to the extent that
the system is exempt from other specific subsections of the Privacy
Act.
(k) From subsection (h) (Legal Guardians) the parent of any
minor, or the legal guardian of any individual who has been declared
to be incompetent due to physical or mental incapacity or age by a
court of competent jurisdiction, may act on behalf of the
individual.
Dated: December 9, 2010.
Mary Ellen Callahan
Chief Privacy Officer, Department of Homeland Security.
[FR Doc. 2010-32000 Filed 12-20-10; 8:45 am]
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