[Federal Register Volume 87, Number 140 (Friday, July 22, 2022)]
[Proposed Rules]
[Pages 43749-43751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15706]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 87, No. 140 / Friday, July 22, 2022 / 
Proposed Rules  

[[Page 43749]]



 DEPARTMENT OF HOMELAND SECURITY

Office of the Secretary

6 CFR Part 5

[Docket No. USCBP-2022-0028]


Privacy Act of 1974: Implementation of Exemptions; Department of 
Homeland Security (DHS)/U.S. Customs and Border Protection (CBP)-027 
Customs Broker Management (CBM) System of Records

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Department of Homeland Security (DHS) is giving concurrent 
notice of a newly established system of records pursuant to the Privacy 
Act of 1974 for the ``DHS/U.S. Customs and Border Protection (CBP)-027 
Customs Broker Management (CBM) System of Records'' and this proposed 
rulemaking. In this proposed rulemaking, the Department proposes 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.

DATES: Comments must be received on or before August 22, 2022.

ADDRESSES: You may submit comments, identified by docket number USCBP-
2022-0028, by one of the following methods:
     Federal e-Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Fax: 202-343-4010.
     Mail: Lynn Parker Dupree, Chief Privacy Officer, Privacy 
Office, Department of Homeland Security, Washington, DC 20528-0655.
    Instructions: All submissions received must include the agency name 
and docket number USCBP-2022-0028. All comments received will be posted 
without change to http://www.regulations.gov, including any personal 
information provided.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For general questions please contact: 
Debra L. Danisek, (202) 344-1610, [email protected], CBP Privacy 
Officer, U.S. Customs and Border Protection, Ronald Reagan Building, 
1300 Pennsylvania Avenue NW, Washington, DC 20229. For privacy 
questions, please contact: Lynn Parker Dupree, (202) 343-1717, 
[email protected], Chief Privacy Officer, Privacy Office, Department 
of Homeland Security, Washington, DC, 20528-0655.

SUPPLEMENTARY INFORMATION:

I. Background

    In accordance with the Privacy Act of 1974, 5 U.S.C. 552a, the 
Department of Homeland Security (DHS) proposes to establish a new DHS 
system of records titled, ``DHS/U.S. Customs and Border Protection 
(CBP)-027 Customs Broker Management.'' The records in this system are 
currently covered under the ``DHS/CBP-010 Persons Engaged in 
International Trade in Customs and Border Protection Licensed/Regulated 
Activities Systems of Records'' (73 FR 77753, December 19, 2008), and 
historically under the ``Treasury/CS.069 Customs Brokers File'' (66 FR 
52984, October 18, 2001). DHS/CBP is creating this new System of 
Records to distinguish the Customs Broker application, exam, license, 
and vetting records from the other records in ``DHS/CBP-010 Persons 
Engaged in International Trade in Customs and Border Protection 
Licensed/Regulated Activities Systems of Records'' (73 FR 77753, 
December 19, 2008). In addition, the new System of Records provides 
notice for a new collection and maintenance of information (i.e., audio 
and video recordings) from individuals taking the Customs Broker 
License Exam (CBLE).
    Customs Brokers are private individuals, associations, 
corporations, or partnerships licensed, regulated, and empowered by CBP 
to assist importers and exporters in meeting federal requirements 
governing imports and exports. Customs Brokers submit necessary 
information and appropriate payments to DHS/CBP on behalf of their 
clients and charge a fee for their service. Customs Brokers must have 
expertise in the entry procedures, admissibility requirements, 
classifications, valuation, and applicable rates of duties, taxes, and 
fees for imported merchandise.
    Pursuant to 19 CFR 111.11, an individual is eligible to qualify for 
a Customs Broker license if he or she (1) is a U.S. citizen on the date 
of submission of the application referred to in 19 CFR 111.12(a) (OMB 
Control Number 1651-0034/CBP Form 3124) and is not an officer or 
employee of the U.S. government, (2) is the age of 21 prior to the date 
of submission of the application, (3) possesses good moral character, 
and (4) has passed the Customs Broker License Exam, by attaining a 
passing grade (75 percent or higher) on the examination taken within 
the 3-year period before submission of the application.
    A partnership is eligible to qualify for a Customs Broker license 
if they have at least one member of the partnership who is a broker. 
See 19 CFR 111.11(b). An association or corporation is eligible to 
qualify for a Customs Broker license if (1) they are empowered under 
its articles of association or articles of incorporation to transact 
customs business as a broker, and (2) have at least one officer who is 
a broker. See 19 CFR 111.11(c).
    DHS/CBP manages the Customs Broker's license program and collects 
information from applicants when they register to take the Customs 
Broker License Exam, during the administration of the Customs Broker 
License Exam, when they apply for a broker's license, throughout the 
background investigation processes, through the triennial reporting 
process, and through continuing education requirements.
    The Customs Broker License Exam is offered to applicants twice a 
year. Applicants can go to https://e.cbp.dhs.gov/ecbp/#/main to 
register to take the exam. In addition to providing biographic 
information when registering, applicants are also required to pay a 
registration fee which is completed though the eCBP portal. Applicants 
can register for either an in-person or remotely proctored examination. 
DHS/CBP may video and/or audio record applicants taking either in-
person or proctored exams. These recordings allow DHS/CBP to ensure a

[[Page 43750]]

fair and equitable examination and monitor compliance with examination 
procedures and requirements.
    Once an applicant has successfully passed the exam, the applicant 
can apply for a Customs Broker license at a CBP facility near where the 
applicant plans to transact business as a Broker. The Customs Broker 
license package requires applicants to submit additional biographic 
information, via CBP Form 3124 (OMB Control No. 1651-0034), and 
fingerprints are collected at a CBP facility by a CBP Officer and sent 
to the CBP Trusted Worker Program System (TWP).\1\ DHS/CBP will use 
this information to conduct a thorough background investigation which 
will include fingerprint analysis, review of character references, as 
well as reviews of credit reports and arrest records. DHS/CBP will use 
all available information to determinate whether to grant a Customs 
Broker license. Additionally, DHS/CBP conducts periodic reviews of 
Broker license holders to determine if a Broker's license should be 
revoked.
---------------------------------------------------------------------------

    \1\ See U.S. DEPARTMENT OF HOMELAND SECURITY, U.S. CUSTOMS AND 
BORDER PROTECTION, PRIVACY IMPACT ASSESSMENT FOR THE TRUSTED WORKER 
PROGRAM SYSTEM (TWP), DHS/CBP/PIA-062, available at https://www.dhs.gov/privacy-documents-us-customs-and-border-protection.
---------------------------------------------------------------------------

    DHS/CBP stores information related to Broker's licenses in the 
Automated Commercial Environment system (ACE) and on designated CBP 
servers. Fingerprints collected as part of the background investigation 
process are stored in the DHS Office of Biometric Identity Management 
(OBIM) Automatic Biometric Identification System (IDENT). In addition, 
some information will be stored on DHS contractors' systems to assist 
in the administration of the Customs Broker License Examination. Any 
files related to appeals will be transferred to CBP and maintained on a 
CBP system.
    Consistent with DHS' information sharing mission, information 
stored in the DHS/CBP-027 Customs Broker Management system of records 
may be shared with other DHS components that have a need to know the 
information to carry out their national security, law enforcement, 
immigration, intelligence, or other homeland security functions. In 
addition, DHS/CBP may share information with appropriate federal, 
state, local, tribal, territorial, foreign, or international government 
agencies consistent with the routine uses set forth in this system of 
records notice.
    On September 10, 2021, CBP published a non-Privacy Act Notice of 
Proposed Rulemaking (NPRM) in the Federal Register (86 FR 50794) 
proposing to amend the CBP regulations to require continuing education 
for individual customs broker license holders (individual brokers) and 
to create a framework for administering this requirement. The Notice of 
Proposed Rulemaking provided for a 60-day comment period, which ended 
on November 9, 2021. Under the notice of proposed rulemaking, 
individual brokers must earn continuing education credits for a variety 
of training or educational activities, whether in-person or online, 
including the completion of coursework, seminars, workshops, symposia, 
or conventions, and, subject to certain limitations and requirements, 
the preparation and presentation of subject matter as an instructor, 
discussion leader, or speaker. Individual brokers must report and 
certify their compliance with the continuing broker education 
requirement upon the submission of the Triennial Status Report (TSR). 
CBP intends to publish a Final Rule which will effectuate the changes 
described above.

II. Privacy Act

    The fair information practice principles found in the Privacy Act 
underpin the statutory framework governing the means by which Federal 
Government agencies collect, maintain, use, and disseminate personally 
identifiable information. The Privacy Act applies to information that 
is maintained in a ``system of records.'' A ``system of records'' is a 
group of any records under the control of an agency from which 
information is retrieved by the name of the individual or by some 
identifying number, symbol, or other identifying particular assigned to 
the individual. In the Privacy Act, an individual is defined to 
encompass U.S. citizens and lawful permanent residents. As a matter of 
policy, DHS extends administrative Privacy Act protections to all 
individuals where systems of records maintain information on U.S. 
citizens, lawful permanent residents, and visitors.
    The Privacy Act allows government agencies to exempt certain 
records from the access and amendment provisions. If an agency claims 
an exemption, however, it must issue a Notice of Proposed Rulemaking to 
make clear to the public the reasons why a particular exemption is 
claimed.
    DHS is claiming exemptions from certain requirements of the Privacy 
Act for DHS/CBP-027 Customs Broker Management System of Records. Some 
information in DHS/CBP-027 Customs Broker Management System of Records 
relates to official DHS national security, law enforcement, 
immigration, intelligence, or other homeland security functions. These 
exemptions are needed to protect information relating to DHS activities 
from disclosure to subjects or others related to these activities. 
Specifically, the exemptions are required to preclude subjects of these 
activities from frustrating these processes; to avoid disclosure of 
activity techniques; to protect the identities and physical safety of 
confidential informants and law enforcement personnel; to ensure DHS' 
ability to obtain information from third parties and other sources; to 
protect the privacy of third parties; and to safeguard classified 
information. Disclosure of information to the subject of the inquiry 
could also permit the subject to avoid detection or apprehension.
    In appropriate circumstances, where compliance would not appear to 
interfere with or adversely affect the law enforcement purposes of this 
system and the overall law enforcement process, the applicable 
exemptions may be waived on a case by case basis.
    A notice of system of records for DHS/CBP-027 Customs Broker 
Management System of Records is also published in this issue of the 
Federal Register.

List of Subjects in 6 CFR Part 5

    Freedom of information, Privacy.

    For the reasons stated in the preamble, DHS proposes to amend 
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. In Appendix C to Part 5, add paragraph 88 to read as follows:

Appendix C to Part 5--DHS Systems of Records Exempt From the Privacy 
Act

    88. The DHS/CBP-027 Customs Broker Management System of Records 
consists of electronic and paper records and will be used by DHS and 
its components. DHS/CBP Customs Broker Management 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; and national 
security and intelligence activities. DHS/CBP-027 Customs Broker 
Management System of Records maintains information about 
individuals, associations, corporations,

[[Page 43751]]

or partnerships to administer the Customs Broker License Exam, 
determine suitability for providing an individual a Customs Broker 
license, and determine whether a licensed Customs Broker continues 
to meet the eligibility requirements to maintain a Customs Broker 
license.
    The Secretary of Homeland Security has exempted this system 
pursuant to exemption 5 U.S.C. 552a(j)(2) of the Privacy Act, 
portions of this system are exempt from 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), and (e)(8); (f); and (g). Additionally, the Secretary has 
exempted this system pursuant to 5 U.S.C. 552a(k)(2) of the Privacy 
Act from subsections (c)(3), (d), (e)(1), (e)(4)(G), (e)(4)(H), 
(e)(4)(I), and (f). 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 (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 when weighing and 
evaluating all available information. Further, permitting amendment 
to records after an investigation has been completed could impose 
administrative burdens on investigators. 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.
    (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 (g)(1) (Civil Remedies) to the extent that 
the system is exempt from other specific subsections of the Privacy 
Act.

Lynn P. Dupree,
Chief Privacy Officer, Department of Homeland Security.
[FR Doc. 2022-15706 Filed 7-21-22; 8:45 am]
BILLING CODE 9111-14-P