[Federal Register Volume 88, Number 39 (Tuesday, February 28, 2023)]
[Rules and Regulations]
[Pages 12541-12546]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03797]



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 Rules and Regulations
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  Federal Register / Vol. 88, No. 39 / Tuesday, February 28, 2023 / 
Rules and Regulations  

[[Page 12541]]



DEPARTMENT OF DEFENSE

Office of the Secretary

5 CFR Part 3601

[Docket ID: DoD-2021-OS-0032]
RIN 0790-AL21


Supplemental Standards of Ethical Conduct for Employees of the 
Department of Defense

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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

SUMMARY: The DoD, with the concurrence of the U.S. Office of Government 
Ethics (OGE), is finalizing amendments to its Supplemental Standards of 
Ethical Conduct for Employees of the Department of Defense (DoD 
Supplemental Regulation). The amendments revise and update the DoD 
Supplemental Regulation originally written in 1993, to supplement the 
OGE Standards of Ethical Conduct for Employees of the Executive Branch 
(OGE Standards). Amendments include changes in the following areas: 
designation of separate agency components for the purposes of gifts and 
teaching, speaking, and writing; additional exceptions for gifts from 
outside sources; additional limitations on gifts between DoD employees; 
and authority to waive any of the provisions of the DoD Supplemental 
Regulation.

DATES: This rule is effective on March 30, 2023.

FOR FURTHER INFORMATION CONTACT: Karen Dalheim, Standards of Conduct 
Office, Office of the Secretary of Defense, Office of the General 
Counsel; telephone: 703-695-3422.

SUPPLEMENTARY INFORMATION: 

I. Background

    Executive Order 12674, as amended by Executive Order 12731, 
authorized OGE to establish a single, comprehensive, and clear set of 
Executive Branch standards of conduct. On August 7, 1992, OGE published 
the Standards of Ethical Conduct for Employees of the Executive Branch 
(OGE Standards), as codified at 5 CFR part 2635. (See 57 FR 35006, as 
corrected at 57 FR 48557 and 57 FR 52583.) The OGE Standards, effective 
February 3, 1993, established uniform ethical conduct rules applicable 
to all officers and employees.
    With the concurrence of OGE, 5 CFR 2635.105 authorizes executive 
branch agencies to publish agency-specific supplemental regulations 
necessary and appropriate to implement their respective ethics 
programs. Pursuant to this authority, DoD, with OGE's concurrence and 
co-signature, published on September 10, 1993, a final rule to 
establish its supplemental standards of ethical conduct for DoD 
personnel (58 FR 47619, 58 FR 47622). DoD, with OGE's concurrence and 
joint issuance, amends the DoD Supplemental Regulation. An update to 
the DoD Supplemental Regulation is necessary to effectively administer 
DoD's ethics program and address changes to DoD's programs and 
operations which have ensued in the 29 years since the publication of 
the Supplemental Regulation in 1993 for the reasons explained below.

II. Explanation of Changes With This Rule

    The provision at 5 CFR 3601.102 currently designates components as 
separate agencies for the purposes of accepting gifts from non-Federal 
sources, and for outside teaching, speaking, and writing activities, 
two components have been added to the list, the National Reconnaissance 
Office (NRO), and DoD (Office of the Secretary of Defense (OSD) 
remainder agency). Although the concept of the OSD remainder agency is 
not novel, listing the OSD remainder agency and explaining that 
officers and employees of other DoD components not designated as 
separate agencies will be treated as officers and employees of the OSD 
remainder agency will clarify the application of the gift and teaching, 
speaking, and writing rules for these components.
    The other amended sections relate to additional gift exceptions 
from outside sources and additional limitations on gifts between DoD 
employees. Finally, the addition of examples in the DoD Supplemental 
Regulation serves to illustrate the application of the rules.
    DoD removes two sections from the 1993 DoD Supplemental Regulation, 
5 CFR 3601.105, ``Standards for accomplishing disqualifications''; and 
5 CFR 3601.106, ``Limitation on solicited sales.'' Regarding the 
``[s]tandards for accomplishing disqualification,'' DoD believes that 
following the OGE government-wide standard at 5 CFR part 2635, subpart 
D and Sec. Sec.  2635.502, 2635.604, and 2635.606, which require oral 
notification of disqualification, sufficiently protect DoD interests 
without concurrently creating an administrative burden. Irrespective of 
whether a written disqualification is required, employees remain 
obligated to disqualify themselves from participating in matters 
affecting their financial interests, pursuant to 18 U.S.C. 208 and 
OGE's implementing regulations at 5 CFR part 2635, subpart D. The 
elimination of the written disqualification requirement does not 
preclude employees from choosing to provide a written disqualification 
to a supervisor. The written disqualification will remain a best 
practice in internal guidance.
    Regarding the ``[l]imitation on solicited sales,'' this section is 
not a supplementation of the OGE Standards, 5 CFR part 2635, and is, 
therefore, being removed consistent with the guidance in OGE Legal 
Advisory, LA-11-07 (2011), https://www2.oge.gov/web/oge.nsf/Resources/LA-11-07:+The+OGE+Supplemental+Agency+Regulation+Process. The subject 
matter of this section falls outside of OGE's authority and, therefore, 
cannot be included in the DoD Supplemental Regulation. The requirement, 
however, remains in effect in internal DoD issuances.
    Updates to 5 CFR 3601.106 (formerly Sec.  3601.107) take into 
consideration advances in technology related to financial disclosure 
reporting and remove the requirement that the prior approval be 
written. The original DoD Supplemental Regulation, requiring written 
prior approval of business activities or compensated outside employment 
with a prohibited source, was deemed necessary in an era when paper 
documentation was the norm.
    Beginning in 2016, DoD mandated the electronic filing of all 
financial disclosure reports, with a built-in

[[Page 12542]]

mandatory supervisory review function. Financial disclosure forms are 
filed annually and supervisors are required, as a part of their review, 
to determine if an employee's business activity or outside employment 
conflicts with the employee's official duties. Prior to certifying a 
filer's report, the supervisor will be required by departmental 
guidance to annotate their approval of the filer's business activity or 
outside employment on the report.
    This electronic filing system is easily accessible and follows 
employees in DoD's mobile workforce. Using the electronic filing system 
ensures supervisors will have access to an employee's prior financial 
disclosure reports and consequently, information on their business 
activity and outside employment.
    Finally, DoD adds one new section entitled ``[w]aiver'' that allows 
the DoD General Counsel to waive any provision of the DoD Supplemental 
Regulation upon finding that doing so would not be inconsistent with 5 
CFR part 2635 and is not otherwise prohibited by law. This provision 
also allows the DoD General Counsel to withdraw a waiver when it is no 
longer necessary.
    The amendments also incorporate a number of changes that are 
technical in nature, (e.g., updating agency names and addressing 
typographical errors that do not affect the substance of the DoD 
Supplemental Regulation).

III. Section by Section Discussion

    The following is a section-by-section overview of the amendments in 
this rulemaking.
    Section 3601.102--Designation of DoD components as separate 
agencies for purposes of gifts, and teaching, speaking, and writing. 
Section 3601.102 is amended to update the list of components, 
designated as separate agencies for the purpose of accepting gifts from 
non-Federal sources and outside teaching, speaking, and writing 
activities. DoD previously designated 16 DoD components as separate 
agencies and the remainder of the DoD components as a separate single 
agency, the OSD remainder agency. The amendment designates two 
additional separate agencies, the NRO, consistent with NRO's 
designation as a separate component in appendix B to 5 CFR part 2641 
and DoD OSD. For these purposes, use of the term ``agency'' does not 
carry the responsibilities of a ``defense agency'' as set forth in 10 
U.S.C. 191-197 (2019). The amendment also updates the name of the 
Defense Security Service, which was renamed the Defense 
Counterintelligence and Security Agency in 2019. To further illustrate 
the components concept, examples were added. DoD also included 
clarifying discussion about the OSD remainder agency for post-
government employment restrictions.
    Section 3601.103--Additional exceptions for gifts from outside 
sources. Section 3601.103 clarifies and amends the current DoD 
Supplemental Regulation that provides an additional exception to the 
gift prohibition in 5 CFR 2635.202(a). Specifically, Sec.  3601.103(a) 
highlights that officers and employees may accept an unsolicited gift 
of free attendance at certain events sponsored by a State or local 
government or by certain civic organizations when their personal 
attendance has been determined to serve a community relations interest 
of their agency. The Sec.  3601.103(a) exception amendment is intended 
to clarify and emphasize the continuing community relations interest 
DoD has in the communities where DoD activities operate. The addition 
of examples further illustrates these concepts. The amendment also 
requires that the community relations interest outweigh any concern 
that acceptance would cause a reasonable person with knowledge of the 
relevant facts to question the employee's integrity or impartiality. 
This new step in the gift acceptance analysis models OGE's framework 
for considering otherwise permissible gifts in 5 CFR 2635.201(b). 
Finally, the Sec.  3601.103(a) exception amendment permits attendance 
by an employee's guest, not just his or her spouse. This change creates 
consistency between DoD's Supplemental Regulation and OGE's 2016 
revision of 5 CFR part 2635, subpart B, which uses the phrase ``spouse 
or other guest'' in the context of gifts. Section 3601.103(b) reassigns 
approval authority for acceptance of educational scholarships or grants 
from the Secretary of Defense, or Secretary of the Military Department 
concerned, to the Designated Agency Ethics Official (DAEO) or the 
DAEO's designee. Experience indicates that the DAEO, as opposed to the 
Secretary of Defense or the Secretary of a Military Department, is in a 
better position to evaluate and review the acceptance of educational 
scholarships or gifts by employees or dependents of employees. The 
amendment also more closely tracks the standard for an ``established 
program of recognition'' in 5 CFR 2635.204(d)(2) and requires the DAEO 
or the DAEO's designee to make the determination in writing. The 
updates are consistent with the process for reviewing awards accepted 
using 5 CFR 2635.204(d), which requires an agency ethics official to 
review the acceptance of certain gifts. Establishing the approval 
authority at the DAEO or designee level fully protects DoD interests 
and ensures that the reviews are done in a timely manner.
    Section 3601.104--Additional limitations on gifts between 
employees. Section 3601.104(a) modifies the current $300 limit on gifts 
from a group that includes an employee's subordinate. This limit has 
not been increased since the implementation of the DoD Supplemental 
Regulation in September 1993. The new rulemaking uses the ``minimal 
value'' threshold established in the Foreign Gifts and Decorations Act, 
5 U.S.C. 7342(a)(5) (2019), which is adjusted every three years by the 
General Services Administration.
    Section 3601.105--Disclaimer for teaching, speaking, and writing in 
a personal capacity related to official duties. Section 3601.105 is 
renumbered from the existing regulation because of the deletion of 
Sec.  3601.105 (Standards of accomplishing disqualification), Sec.  
3601.106 (Limitation on solicited sales), and Sec.  3601.107 (Prior 
approval for outside employment and business activities). Additionally, 
Sec.  3601.105 makes minor non-substantive changes and includes 
examples to further illustrate application of the regulation.
    Section 3601.106--Prior approval for outside employment and 
business activities. Section 3601.106 is renumbered from the existing 
regulation because of the deletion of previous chapters as described 
above. Section 3601.106 removes the requirement for written prior 
approval that certain employees must receive to engage in outside 
employment or business activities. The requirement for prior approval 
is retained and will be documented annually in the applicable 
electronic financial disclosure filing system. Additionally, two non-
substantive changes were made to correctly identify OGE documents.
    Section 3601.107--Waiver. Section 3601.107 authorizes the DoD 
General Counsel (DoD Designated Agency Ethics Official) to waive any 
provision of this part, provided that a waiver is not inconsistent with 
5 CFR part 2635 or otherwise prohibited by law, and issuance of the 
waiver will not undermine public confidence. This section also contains 
guidance pertaining to the contents of the waiver. The DoD General 
Counsel may withdraw the waiver if he or she determines that it is no 
longer necessary.

[[Page 12543]]

IV. Matters of Regulatory Procedure

Administrative Procedure Act

    Pursuant to 5 U.S.C. 553(a)(2), DoD was not required to provide a 
general notice of proposed rulemaking, opportunity for advance comment, 
and a 30-day delay in effectiveness because the proposed rule was a 
matter relating to Federal personnel. This rulemaking contains 
statements of policy, interpretive rules, and conduct regulations 
related to DoD personnel. However, because this rulemaking may be 
improved, it was published in the Federal Register on June 10, 2022 (87 
FR 35460-35465). DoD received one set of timely and responsive 
comments, which were submitted by an individual.
    The first comment suggested mandatory involvement from public 
affairs to assist in determining whether the community relations 
interest of the agency will be served by DoD employee attendance. DOD 
believes, the agency designee has sufficient knowledge to make the 
determination that attendance by agency personnel at a community event 
sponsored by a State or local government, or by a civic organization 
exempt from taxation under 26 U.S.C. 501(c)(4) will serve an agency 
interest. While a designees are encouraged to consult with their public 
affairs officer, DoD believes making consultation mandatory is not 
necessary.
    The second comment suggested the $300 limit on gifts from groups of 
subordinates to superiors on special infrequent occasions be amended 
and capped at $415, rather than linked to the Foreign Gifts and 
Decorations Act. In consultation with the OGE, DoD determined that 
modifying the current $300 limit on gifts from a group that includes an 
employee's subordinate is not likely to lead to inappropriate gifts to 
superiors. Increasing the limit, which was established in 1993 and has 
not been updated since, appropriately accounts for inflation that has 
occurred over the last 29 years. Setting a limit that is consistent 
with the ``minimal value'' threshold established in the Foreign Gifts 
and Decorations Act tracks language in the Ethics in Government Act (5 
U.S.C. app. 102(a)(2)(A) and (B)). This language ties the gift 
reporting threshold for purposes of financial disclosure reporting to 
that in the Foreign Gifts and Decorations Act.
    The third comment suggested the requirement for prior written 
approval of outside employment and business activity remain in the 
rule. As stated in proposed rule 5 CFR 3601.106(a), ``[n]othing in this 
regulation precludes a supervisor from providing the employee with 
written approval.'' Furthermore, the requirement for prior approval is 
retained and documented annually in the applicable electronic financial 
disclosure, which is reviewed by the supervisor and follows employees 
in DoD's mobile workforce.
    After carefully considering the set of comments DoD is publishing 
this final rule with no changes

Congressional Review

    This rulemaking relates to agency personnel and does not 
substantially affect the rights or obligations of non-agency parties. 
Therefore, it does not meet the definition of a ``rule'' at 5 U.S.C 804 
and is not subject to the procedures of the Congressional Review Act.

Executive Order 12866, ``Regulatory Planning and Review'' and Executive 
Order 13563, ``Improving Regulation and Regulatory Review''

    These Executive orders direct agencies to assess all costs, 
benefits, and available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health, safety 
effects, distributive impacts, and equity). These Executive orders 
emphasize the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. 
This rulemaking is not a ``significant regulatory action'' under 
section 3(f) of Executive Order 12866, ``Regulatory Planning and 
Review,'' as supplemented by Executive Order 13563, ``Improving 
Regulation and Regulatory Review.'' Accordingly, the Office of 
Management and Budget has not reviewed this rulemaking.

Executive Order 12988, ``Civil Justice Reform''

    This regulation meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of Executive Order 12988, ``Civil Justice 
Reform.''

Paperwork Reduction Act

    The amended regulations contain no additional information-
collection or record-keeping requirements under the Paperwork Reduction 
Act of 1995, 44 U.S.C. 3501, et seq.

Regulatory Flexibility Act (RFA)

    As required by the RFA, DoD certifies this regulation will not have 
a significant economic impact on a substantial number of small 
entities.

List of Subjects in 5 CFR Part 3601

    Conflict of interests, Executive branch standards of conduct, 
Government employees.


0
For the reasons discussed in the preamble, DoD revises 5 CFR part 3601 
to read as follows:

PART 3601--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE DEPARTMENT OF DEFENSE

Sec.
3601.101 Purpose.
3601.102 Designation of DoD components as separate agencies for 
purposes of gifts from outside sources, and teaching, speaking, and 
writing.
3601.103 Additional exceptions for gifts from outside sources.
3601.104 Additional limitations on gifts between employees.
3601.105 Disclaimer for teaching, speaking, and writing in a 
personal capacity related to official duties.
3601.106 Prior approval for outside employment and business 
activities.
3601.107 Waiver.

    Authority: 5 U.S.C. 301, 7301, 7351, 7353; 5 U.S.C. Chapter 131; 
E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by 
E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.203(a), 2635.204(k), 2635.803, 2635.807.


Sec.  3601.101  Purpose.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Department of Defense (DoD) and supplement 
the Standards of Ethical Conduct for Employees of the Executive Branch 
contained in 5 CFR part 2635. DoD employees are required to comply with 
part 2635, this part, and implementing guidance and procedures.


Sec.  3601.102  Designation of DoD components as separate agencies for 
purposes of gifts from outside sources, and teaching, speaking, and 
writing.

    (a) Pursuant to 5 CFR 2635.203(a), each of the following DoD 
components is designated as a separate agency for purposes of the 
regulations in subpart B of 5 CFR part 2635 governing gifts from 
outside sources and 5 CFR 2635.807 governing teaching, speaking, and 
writing:
    (1) Armed Services Board of Contract Appeals;
    (2) Department of the Army;
    (3) Department of the Navy;
    (4) Department of the Air Force;
    (5) Defense Commissary Agency;
    (6) Defense Contract Audit Agency;
    (7) Defense Finance and Accounting Service;
    (8) Defense Information Systems Agency;

[[Page 12544]]

    (9) Defense Intelligence Agency;
    (10) Defense Logistics Agency;
    (11) Defense Counterintelligence and Security Agency;
    (12) Defense Threat Reduction Agency;
    (13) National Geospatial-Intelligence Agency;
    (14) National Security Agency;
    (15) Office of Inspector General;
    (16) Uniformed Services University of the Health Sciences;
    (17) National Reconnaissance Office; and
    (18) Office of the Secretary of Defense remainder agency.
    Example 1 to paragraph (a). For paragraph (a)(1) of this section 
[Teaching, Speaking, or Writing]: An Armed Services Board of Contract 
Appeals (ASBCA) employee is asked to give a compensated speech on 
prisoners of war, a topic on which he has a personal interest. While 
the Department of Defense has ongoing policies, programs, or operations 
related to this topic, the ASBCA does not. The employee may give the 
speech in a personal capacity and receive compensation because the 
ASBCA is a designated separate agency, the speech is not related to an 
ongoing program or operation of the ASBCA, and the speech is not 
otherwise related to the employee's official duties.
    Example 2 to paragraph (a). For paragraphs (a)(2) and (18) of this 
section [Separate component--gift]: An employee of the Department of 
the Army (Army) and an employee of the Office of the Joint Chiefs of 
Staff (JCS) are each offered a ticket to a football game by a company 
that contracts with OSD. As long as the contractor is not a prohibited 
source for the Army and the gift is not offered because of the 
employee's official position, the Army employee may accept the ticket 
because the Army is designated as a separate agency under paragraph 
(a)(2). The JCS employee may not accept the ticket because JCS is not 
designated as a separate agency and, therefore, is part of the ``OSD 
remainder agency.'' The OSD contractor is therefore a prohibited source 
for the JCS employee or for any employee of any of the other 
organizations that are part of the OSD remainder agency.
    Example 3 to paragraph (a). For paragraph (a)(11) of this section 
[Agency designation]: An employee of the Department of the Air Force is 
offered a gift by a company that only does business with the Defense 
Counterintelligence and Security Agency, which is designated as a 
separate agency. The company would be a prohibited source of gifts for 
employees of the Defense Counterintelligence and Security Agency but 
not for employees of the Department of the Air Force or for any other 
component which has been designated as a separate agency.
    (b) Employees of DoD components not designated as separate 
agencies, including employees of the Office of the Secretary of 
Defense, will be treated as employees of the ``Office of the Secretary 
of Defense (OSD) remainder agency.'' The OSD remainder agency shall 
itself be treated as a separate DoD agency for purposes of determining 
whether the donor of a gift is a prohibited source under 5 CFR 
2635.203(d) and for identifying the employee's agency under 5 CFR 
2635.807 governing teaching, speaking, and writing.
    (1) The use of the term ``agency'' in this part does not carry with 
it the designation and responsibilities of a ``defense agency'' as set 
forth in 10 U.S.C. 191-197 (2019).
    (2) For purposes of this part, ``prohibited source'' is defined at 
5 CFR 2635.203(d), except that ``agency'' shall mean the employee's 
component.

    Note 1 to paragraph (b). All DoD organizations not individually 
listed in paragraph (a) of this section are part of the OSD 
remainder agency.


    Note 2 to paragraph (b): Prohibited sources for each component 
for purposes of gifts and teaching, speaking, and writing are 
exclusive to that component and are not imputed to OSD.


    Note 3 to paragraph (b). An employee who is detailed to another 
component will use the prohibited source list of the component to 
which they are detailed for purposes of gifts, teaching, speaking, 
and writing.

    (c) The designations in this section shall only apply for purposes 
of gifts under 5 CFR 2635.203(a) and teaching, speaking, and writing 
under 5 CFR 2635.807, and are distinct from the designations approved 
by the Office of Government Ethics for purposes of the post-Government 
employment restrictions in 18 U.S.C. 207(c). See 5 CFR 2641.302 and 
appendix B to part 2641.


Sec.  3601.103  Additional exceptions for gifts from outside sources.

    In addition to the gift exceptions in 5 CFR 2635.204, which 
authorize acceptance of certain gifts from outside sources, and subject 
to all provisions of 5 CFR part 2635, subpart B, an employee may accept 
unsolicited gifts from outside sources otherwise prohibited by 5 CFR 
2635.202 as detailed in this section. For purposes of this section, the 
term ``agency'' is defined in Sec.  3601.102, and the term ``free 
attendance'' is defined in 5 CFR 2635.203(g).
    (a) Community relations events. (1) An employee may accept an 
unsolicited gift of free attendance for himself or herself and a guest 
at a community relations event sponsored by a State or local 
government, or by a civic organization exempt from taxation under 26 
U.S.C. 501(c)(4), when:
    (i) The cost of free attendance is provided by the sponsor of the 
event; and
    (ii) The employee's agency designee determines that the community 
relations interests of the agency will be served by the employee's 
attendance in his or her personal capacity, and the employee's 
attendance outweighs any concern that acceptance would cause a 
reasonable person with knowledge of the relevant facts to question the 
employee's integrity or impartiality.
    (2) Refer to 5 CFR 2635.204(g)(5) in determining whether the cost 
of attendance may be considered to be provided by the sponsor of the 
event.
    Example 1 to paragraph (a) [Community relations interest]: The City 
of Jacksonville, Florida, hosts a Military Appreciation Day event. 
Members of the general public are charged an admission fee to attend. 
Department of the Navy employees who have recently returned from 
deployment are invited and offered free admission for themselves and a 
guest. These Navy employees may personally accept the gift of free 
attendance for themselves and a guest, if their agency designee 
determines that their attendance at the event will serve a community 
relations interest and that employees' attendance outweighs concerns 
that acceptance would call into question their integrity or 
impartiality.
    Example 2 to paragraph (a) [No community relations interest]: A 
foundation that provides grants to non-profit organizations focusing on 
environmental initiatives is sponsoring a fundraising golf tournament. 
The foundation is offering to waive the entry fee for military 
personnel at the local installation. Military personnel may not accept 
the offer by the sponsor to waive the entry fee under paragraph (a) of 
this section, because participation in this event does not further 
local community relations interests for the DoD installation. While the 
community relations exception may not be used to accept the gift, 
nothing in this section precludes an employee from accepting the gift 
if another gift exclusion, exception, or authority would apply.
    (b) Scholarships and grants. An employee and his or her dependents

[[Page 12545]]

may accept an educational scholarship or grant from an entity that does 
not have interests that may be substantially affected by the 
performance or non-performance of the employee's official duties, or 
from an association or similar entity that does not have a majority of 
members with such interests, if the Designated Agency Ethics Official 
(DAEO) or the DAEO's designee makes a written determination that the 
scholarship or grant is made pursuant to an established program of 
recognition, including those established for the benefit of employees, 
or the dependents of employees. A scholarship or grant is made pursuant 
to an established program of recognition if:
    (1) Scholarships or grants have been made on a regular basis or, if 
the program is new, there is a reasonable basis for concluding that 
scholarships or grants will be made on a regular basis based on funding 
or funding commitments; and
    (2) Selection of recipients is made pursuant to written standards.


Sec.  3601.104  Additional limitations on gifts between employees.

    The following limitations apply to gifts from groups of employees 
that include a subordinate and to voluntary contributions to gifts for 
superiors permitted under 5 CFR 2635.304(c)(1):
    (a) Gifts from a group that includes a subordinate. Regardless of 
the number of employees contributing to a gift on a special, infrequent 
occasion as permitted by 5 CFR 2635.304(c)(1), an employee may not 
accept a gift or gifts, including indirectly within the meaning of 5 
CFR 2635.203(f), from a donating group if the aggregate market value 
exceeds the minimal value, as established by 5 U.S.C. 7342(a)(5), and 
if the employee knows or has reason to know that any member of the 
donating group is a subordinate.
    (1) The cost of items excluded from the definition of a gift by 5 
CFR 2635.203(b) and the cost of food, refreshments, and entertainment 
provided to mark the occasion for which the gift is given shall not be 
included in determining whether the value of a gift or gifts exceeds 
the aggregate minimal value limit.
    (2) The value of a gift or gifts from two or more donating groups 
will be aggregated and will be considered to be from a single donating 
group if the employee who is offered the gift knows or has reason to 
know that an individual who is his or her subordinate is a member of 
more than one of the donating groups.
    (b) Voluntary contribution. For purposes of 5 CFR 2635.304(c)(1), 
the nominal amount of a voluntary contribution that an employee may 
solicit from another employee for a group gift to the contributory 
employee's superior for any special, infrequent occasion will not 
exceed $10. A voluntary contribution of a nominal amount for food, 
refreshments, and entertainment at an event to mark the occasion for 
which a group gift is given may be solicited as a separate, voluntary 
contribution not subject to the $10 limit.


Sec.  3601.105  Disclaimer for teaching, speaking, and writing in a 
personal capacity related to official duties.

    An employee who uses or permits the use of his or her military rank 
or who includes or permits the inclusion of his or her title or 
position as one of several biographical details given to identify 
himself or herself in connection with teaching, speaking, or writing, 
in accordance with 5 CFR 2635.807(b), must make a disclaimer if the 
subject of the teaching, speaking, or writing deals in significant part 
with any ongoing or announced policy, program, or operation of the 
employee's agency, as defined in Sec.  3601.102, and the employee has 
not been authorized by appropriate agency authority to present that 
material as the agency's position. The disclaimer must be made as 
follows:
    (a) The required disclaimer must expressly state that the views 
presented are those of the speaker or author and do not necessarily 
represent the views of DoD or its components.
    (b) When a disclaimer is required for an article, book, or other 
writing, the disclaimer will be printed in a reasonably prominent 
position in the writing itself.
    (c) When a disclaimer is required for a speech or other oral 
presentation, the disclaimer may be given orally provided it is given 
at the beginning of the oral presentation.
    Example 1 to Sec.  3601.105 [Disclaimer Required]: An employee is 
asked to provide unpaid personal remarks at a local university on a DoD 
matter she handled in the past year. As part of her introduction, the 
university facilitator identifies the employee by her official title. 
Since the subject matter of her speech is related to her official 
duties, and her official title is used, she must provide a reasonably 
prominent disclaimer at the beginning of her remarks.
    Example 2 to Sec.  3601.105 [Disclaimer Not Required]: An employee 
is invited in his personal capacity to speak at his alma mater on 
Career Day about his personal experiences as a Government employee, but 
will not discuss the ongoing or announced policy, program, or operation 
of his agency. The introduction to his talk only mentions that he is a 
graduate of the school and currently a ``DoD employee,'' but does not 
use his official title, rank, or position. No disclaimer would be 
necessary because the introduction to the employee's speech did not 
include his official title or position and the subject of the speech 
does not deal in significant part with any ongoing or announced policy, 
program or operation of the relevant DoD agency.

    Note 1 to Sec.  3601.105. Ethics review of whether a disclaimer 
is necessary or prudent is not a substitute for compliance with 
other DoD requirements such as obtaining a security review of the 
content of the teaching, speaking, or writing.

Sec.  3601.106  Prior approval for outside employment and business 
activities.

    (a) A DoD employee, other than a special Government employee who is 
required to file a financial disclosure report (OGE Forms 450 or 278e), 
shall obtain approval from the agency designee before engaging in a 
business activity or compensated outside employment with a prohibited 
source, unless general approval has been given in accordance with 
paragraph (b) of this section. Approval shall be granted unless a 
determination is made that the business activity or compensated outside 
employment is expected to involve conduct prohibited by statute or 
regulation. Approval of the DoD employee's business activity or 
compensated outside employment with a prohibited source will be 
annotated on the employee's annual financial disclosure report. Nothing 
in this part precludes a supervisor from providing the employee with 
written approval. For purposes of this section, the following 
definitions apply:
    (1) Business activity. Any business, contractual, or other 
financial relationship not involving the provision of personal services 
by the DoD employee. It does not include a routine commercial 
transaction or the purchase of an asset or interest, such as common 
stock, that is available to the general public.
    (2) Employment. Any form of non-Federal employment or business 
relationship involving the provision of personal services by the DoD 
employee. It includes, but is not limited to, personal services as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, or trustee.
    (3) Prohibited source. See 5 CFR 2635.203(d) (modified by the 
separate DoD component agency designations in Sec.  3601.102).

[[Page 12546]]

    (b) The DoD component DAEO or designee may, by a written notice, 
exempt categories of business activities or employment from the 
requirement of paragraph (a) of this section based on a determination 
that business activities or employment within those categories would 
generally be approved and are not likely to involve conduct prohibited 
by statute or regulation.


Sec.  3601.107  Waiver.

    (a) The DoD General Counsel may waive any provision of this part 
based upon a determination that the waiver is not inconsistent with 5 
CFR part 2635 or otherwise prohibited by law, and that waiver of the 
provision will not undermine public confidence in the integrity of 
Government programs or operations. The waiver must be:
    (1) In writing;
    (2) Supported by a detailed statement of facts and findings; and
    (3) Narrow in scope and limited in duration.
    (b) The DoD General Counsel may withdraw the waiver, in writing, if 
it is determined to no longer be necessary.
    (c) The authority for granting and withdrawing a waiver cannot be 
delegated below the DoD Alternate DAEO.

Caroline Krass,
General Counsel, U.S. Department of Defense.
Emory Rounds,
Director, U.S. Office of Government Ethics.
[FR Doc. 2023-03797 Filed 2-27-23; 8:45 am]
BILLING CODE 5001-06-P