Privacy Act of 1974, as Amended; Exemption of System of Records From Certain Provisions

DEPARTMENT OF THE TREASURY

Customs Service

31 CFR Part 1

Privacy Act of 1974, as Amended; Exemption of System of Records

From Certain Provisions

AGENCY: Customs Service, Treasury.

ACTION: Final Rule; determination.

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SUMMARY: In accordance with the Privacy Act of 1974, as amended,

Customs has determined to exempt a system of records, the Pacific Basin

Reporting Network (Treasury/ Customs .171) from certain provisions of

the Privacy Act. The exemptions are intended to increase the value of

the system of records for law enforcement purposes, to comply with

legal prohibitions against the disclosure of certain kinds of

information, and to protect the privacy of individuals identified in

the system of records.

EFFECTIVE DATE: November 29, 1996.

FOR FURTHER INFORMATION CONTACT: Marvin M. Amernick, Acting Chief,

Disclosure Law Branch, Office of Regulations and Rulings, U.S. Customs

Service, (202) 482-6970.

SUPPLEMENTARY INFORMATION: As a law enforcement agency, the U.S.

Customs Service has a wide variety of

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investigatory responsibilities including, for example, investigations

of smuggling, narcotics trafficking, the importation of prohibited or

restricted merchandise, violations of the Neutrality Act,

investigations of organized crime activities, commercial fraud

investigations and many others. Among the activities in which Customs

is involved is the clearance of aircraft and vessels and their crews

into the customs territory of the United States. The purpose of the

Pacific Basin Reporting Network system of records is to collect and

store information with respect to potential violations of Customs and

other domestic and international laws and where appropriate to disclose

this information to other law enforcement agencies which have an

interest in this information. Authority for the system is provided by 5

U.S.C. 301; 19 U.S.C. 1433, 1459; 19 U.S.C. 1644(a); Treasury

Department Order No. 165, Revised, as amended.

Pursuant to the Privacy Act of 1974, as amended, 5 U.S.C.552a, the

Department of the Treasury published in the Federal Register of

November 9, 1995 (60 FR 56648), all of its systems of records including

the Pacific Basin Reporting Network--Treasury/Customs .171. This system

of records assists Customs in the proper performance of its functions

under the statutes and Treasury Department Order No. 165 cited above.

Under 5 U.S.C. 552a(j)(2), the head of an agency may promulgate

rules to exempt a system of records from certain provisions of 5 U.S.C.

552a if the system of records is maintained by an agency or component

thereof which performs as its principal function any activity

pertaining to the enforcement of criminal laws, including police

efforts to prevent,control, or reduce crime or to apprehend criminals,

and the activities of prosecutors, courts, correctional, probation,

pardon, or parole authorities, and which consists of: (a) Information

compiled for the purpose of identifying individual criminal offenders

and alleged offenders and consisting only of identifying data and

notations of arrests, the nature and disposition of criminal charges,

sentencing, confinement, release and parole and probation status; (b)

information compiled for the purpose of a criminal investigation,

including reports of informants and investigators, and associated with

an identifiable individual; or (c) reports identifiable to an

individual compiled at any stage of the process of enforcement of the

criminal laws from arrest or indictment through release from

supervision.

In addition, under 5 U.S.C. 552a(k)(2), the head of an agency may

promulgate rules to exempt a system of records from certain provisions

of 5 U.S.C. 552a if the system of records is investigatory material

compiled for law enforcement purposes other than material within the

scope of subsection (j)(2) set forth above.

Accordingly, pursuant to the authority contained in section

1.23(c) of the regulations of the Department of the Treasury (31 CFR

1.23(c)), the Commissioner of Customs has determined to exempt the

Pacific Basin Reporting Network from certain provisions of the Privacy

Act pursuant to 5 U.S.C. 552a(j)(2), (k)(2) and 31 CFR 1.23(c). The

proposed rule announcing the determination was published in the Federal

Register on November 19, 1992, at 57 FR 54539. No comments were

received in response to the proposed rule. The specific provisions and

the reasons for exempting the system of records from each specific

provision of 5 U.S.C. 552a are set forth below as required by 5 U.S.C.

552a(j)(2) and (k)(2).

General Exemption Under 5 U.S.C. 552a(j)(2)

Pursuant to 5 U.S.C. 552a(j)(2), the Commissioner of Customs

exempts the Pacific Basin Reporting Network from the following

provisions of the Privacy Act of 1974, as amended, 5 U.S.C. 552a(c)(3)

and (4); (d)(1), (2), (3) and (4); (e)(1),(2),(3), (4)(G),(H) and

(I);(e)(5) and (8); (f) and (g).

Specific Exemptions Under 5 U.S.C. 552a(k)(2)

To the extent the exemption under 5 U.S.C. 552a(j) does not apply

to the Pacific Basin Reporting Network, the Commissioner of Customs

exempts the Pacific Basin Reporting Network from the following

provisions of 5 U.S.C. 552a pursuant to 5 U.S.C. 552(k)(2): 5 U.S.C.

552a(c)(3); (d)(1),(2), (3) and (4); (e)(1), (e)(4)(G), (H) and (I);

and (f).

Reasons for Exemption Under 5 U.S.C. 552a(j)(2) and (k)(2)

Although more specific explanations are contained in 31 CFR 1.36

under the heading United States Customs Service, the following

explanations for exemptions will be helpful.

(1) Pursuant to 5 U.S.C. 552a(e)(4)(G) and (f)(1), individuals may

inquire whether a system of records contains records pertaining to

them. Application of these provisions to the Pacific Basin Reporting

Network would give individuals an opportunity to learn whether they

have been identified as either suspects or subjects of investigation.

As further described in the following subsection, access to such

knowledge would impair the ability of the Office of Investigations to

carry out its mission, since individuals could take steps to avoid

detection, inform associates that an investigation is in progress:

learn whether they are only suspects or identified as law violators;

begin, continue, or resume illegal conduct upon learning that they are

not identified in the system of records; or destroy evidence needed to

prove the violation.

(2) Pursuant to 5 U.S.C.552a(d)(1), (e)(4)(H) and (f)(2), (3) and

(5), individuals may gain access to records pertaining to them. The

application of these provisions to the Pacific Basin Reporting Network

would compromise the ability of the Office of Investigations to provide

useful tactical and strategic information to law enforcement agencies.

Permitting access to records contained in the Pacific Basin Reporting

Network would provide individuals with information concerning the

nature of any current investigations concerning them and would enable

them to avoid detection or apprehension. By discovering the collection

of facts which would form the basis of their arrest, by enabling them

to destroy or alter evidence of criminal conduct that would form the

basis for their arrest, and by learning that criminal investigators had

reason to believe that a crime was about to be committed, they could

delay the commission of the crime or change the scene of the crime to a

location which might not be under surveillance.

Permitting access to either on-going or closed investigations

files would also reveal investigative techniques and procedures, the

knowledge of which could enable individuals planning crimes to

structure their operations in such a way as to avoid detection or

apprehension and thereby neutralize law enforcement officers'

established investigative tools and procedures.

Permitting access to investigative files and records could,

moreover, disclose the identity of confidential sources and informers

and the nature of the information supplied and thereby endanger the

physical safety of sources of information by exposing them to reprisals

for having provided the information. Confidential sources and informers

might refuse to provide criminal investigators with valuable

information if they could not be secure in the knowledge that their

identities would not be revealed through disclosure of either their

names or the nature of the information they supplied. Loss of access to

such sources would seriously impair the ability of the Office

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of Investigations to carry out its mandate.

Furthermore, providing access to records contained in the Pacific

Basin Reporting Network could reveal the identities of undercover law

enforcement officials who compiled information regarding the

individual's criminal activities and thereby endanger the physical

safety of those undercover officers or their families by exposing them

to possible reprisals.

By compromising the law enforcement value of the Pacific Basin

Reporting Network for the reasons outlined above, permitting access in

keeping with these provisions would discourage other law enforcement

and regulatory agencies, foreign and domestic, from freely sharing

information with the Office of Investigations and thus would restrict

the Office's access to information necessary to accomplish its mission

most effectively.

(3) Pursuant to 5 U.S.C. 552a(d)(2),(3), and (4),(e)(4)(H), and

(f)(4) an individual may request amendment of a record pertaining to

him or her and the agency must either amend the record, or note the

disputed portion of the record and provide a copy of the individual's

statement of disagreement with the agency's refusal to amend a record

to persons or other agencies to whom the record is thereafter

disclosed. Since these provisions depend on the individual's having

access to his or her records, and since these rules exempt the Pacific

Basin Reporting Network from provisions of 5 U.S.C. 552a, as amended,

relating to access to records, for the reasons set out in (2) above,

these provisions should not apply to the Pacific Basin Reporting

Network.

(4) Under 5 U.S.C. 552a(c)(4) an agency must inform any person or

other agency about any correction or notation of dispute that the

agency made in accordance with 5 U.S.C. 552a(d) to any record that the

agency disclosed to the person or agency if an accounting of the

disclosure was made. Since this provision depends on an individual's

having access to and an opportunity to request amendment of records

pertaining to him or her, and since these rules exempt the Pacific

Basin Reporting Network from the provisions of 5 U.S.C. 552a relating

to access to and amendment of records, for the reasons set out in

paragraph (3) above, this provision ought not apply to the Pacific

Basin Reporting Network.

(5) Under 5 U.S.C. 552a(c)(3) an agency is required to make an

accounting of disclosure of records available to the individual named

in the record upon his or her request. The accounting must state the

date, nature, and purpose of each disclosure of the record and the name

and address of the recipient.

The application of this provision would impair the ability of

enforcement agencies outside the Department of the Treasury to make

effective use of information provided by the Pacific Basin Reporting

Network. Making an accounting of disclosure available to the subjects

of an investigation would alert those individuals to the fact that

another agency is conducting an investigation into their criminal

activities and could reveal the geographic location of the other

agency's investigation, the nature and purpose of that investigation,

and dates on which that investigation was active. Violators possessing

such knowledge would be able to take measures to avoid detection or

apprehension by altering their operations, by transferring their

criminal activities to other geographical areas, or by destroying or

concealing evidence that would form the basis for arrest.

Moreover, providing accounting to the subjects of investigations

would alert them to the fact that the Pacific Basin Reporting Network

has information regarding their criminal activities and could inform

them of the general nature of that information. Access to such

information could reveal the operation of the Office of Investigation's

information gathering and analysis systems and permit violators to take

steps to avoid detection or apprehension.

(6) Under 5 U.S.C. 552a(e)(4)(1) an agency is required to publish a

general notice listing the categories of sources for information

contained in a system of records. The application of this provision to

the Pacific Basin Reporting Network could compromise its ability to

provide useful information to law enforcement agencies, since revealing

sources for the information could disclose investigative techniques and

procedures, result in threats or reprisals against informers by the

subjects of investigations, and cause informers to refuse to give full

information to criminal investigators for fear of having their

identities as sources disclosed.

(7) 5 U.S.C. 552a(e)(1) requires that an agency maintain in its

records only such information about an individual as is relevant and

necessary to accomplish a purpose of the agency required to be

accomplished by statute or executive order. The term ``maintain'' as

defined in 5 U.S.C. 552a(a)(3) includes ``collect'' and

``disseminate.'' At the time that information is collected by the

Customs Service, there is often insufficient time to determine whether

the information is relevant and necessary to accomplish a purpose of

the Customs Service; in many cases information collected may not be

immediately susceptible to a determination of whether the information

is relevant and necessary, particularly in the early stages of

investigation, and in many cases information which initially appears to

be irrelevant and unnecessary may, upon further evaluation or upon

continuation of the investigation, prove to have particular relevance

to an enforcement program of the Customs Service. Further, not all

violations of law discovered during a Customs Service criminal

investigation fall within the investigative jurisdiction of the Customs

Service; in order to promote effective law enforcement, it often

becomes necessary and desirable to disseminate information pertaining

to such violations to other law enforcement agencies which have

jurisdiction over the offense to which the information relates. The

Customs Service should not be placed in a position of having to ignore

information relating to violations of law not within its jurisdiction

where that information comes to the attention of the Customs Service

through the conduct of a lawful Customs Service investigation. The

Customs Service therefore believes that it is appropriate to exempt the

above-listed systems of records from the provisions of 5 U.S.C.

552a(e)(1).

(8) Under 5 U.S.C. 552a(e)(2) an agency is requested to collect

information to the greatest extent practicable directly from the

subject individual when the information may result in adverse

determinations about an individual's rights, benefits, and privileges

under Federal programs. The application of this provision to the

Pacific Basin Reporting Network would impair the ability to collate,

analyze, and disseminate investigative intelligence and enforcement

information.

Most information collected about an individual under criminal

investigation is obtained from third parties, such as witnesses and

informers. It is usually not feasible to rely upon the subject of the

investigation as a source for information regarding his criminal

activities. An attempt to obtain information from the subject of a

criminal investigation will often alert that individual to the

existence of an investigation, thereby affording the individual an

opportunity to attempt to conceal his criminal activities so as to

avoid apprehension. In certain instances, the subject of a criminal

investigation is not required to supply

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information to criminal investigators as a matter of legal duty. During

criminal investigations it is often a matter of sound investigative

procedure to obtain information from a variety of sources to verify

information already obtained.

(9) Pursuant to 5 U.S.C. 552a(e)(3) an agency must inform each

individual whom it asks to supply information, on the form that it uses

to collect the information or on a separate form that the individual

can retain, the agency's authority for soliciting the information;

whether the disclosure of information is voluntary or mandatory; the

principal purposes for which the agency will use the information and

the effects on the individual of not providing all or part of the

information. The Pacific Basin Reporting Network should be exempted

from this provision to avoid impairing the ability of the Office of

Investigation to collect and collate investigative intelligence and

enforcement data.

Confidential sources or undercover law enforcement officers often

obtain information under circumstances in which it is necessary to keep

the true purpose of their actions secret so as not to let the subject

of the investigation or his or her associates know that a criminal

investigation is in progress. If it became known that the undercover

officer was assisting in a criminal investigation, the officer's

physical safety could be endangered through reprisal, and that officer

may not be able to continue working on the investigation.

Further, individuals for personal reasons often would feel

inhibited in talking to a person representing a criminal law

enforcement agency but would be willing to talk to a confidential

source or undercover officer whom they believe not to be involved in

law enforcement activities. Providing a confidential source of

information with written evidence that he or she was a source, as

required by this provision, could increase the likelihood that the

source of information would be subject to retaliation by the subject of

the investigation. Further, application of the provision could result

in an unwarranted invasion of the personal privacy of the subject of

the criminal investigation, where further investigation reveals that

the subject was not involved in any criminal activity.

(10) Pursuant to 5 U.S.C. 552a(e)(5) an agency must maintain all

records it uses in making any determination about any individual with

such accuracy, relevance, timeliness, and completeness as is reasonably

necessary to assure fairness to the individual in the determination.

Since 5 U.S.C. 552a(a)(3) defines ``maintain'' to include

``collect'' and ``disseminate'', application of this provision to the

Pacific Basin Reporting Network would hinder the initial collection of

any information that could not, at the moment of collection, be

determined to be accurate, relevant, timely, and complete. Similarly,

application of this provision would seriously restrict the ability of

Customs to disseminate information from the Pacific Basin Reporting

Network pertaining to a possible violation of law to law enforcement

and regulatory agencies. In collecting information during a criminal

investigation, it is often impossible or unfeasible to determine

accuracy, relevance, timeliness or completeness prior to collection of

the information.

Information that may initially appear inaccurate, irrelevant,

untimely, or incomplete may, when collected and analyzed with other

available information, become more pertinent as an investigation

progresses. In addition, application of this provision could seriously

impede criminal investigators and intelligence analysts in the exercise

of their judgment in reporting results obtained during criminal

investigations.

(11) Under 5 U.S.C. 552a(e)(8) an agency must make reasonable

efforts to serve notice on an individual when the agency makes any

record on the individual available to any person under compulsory legal

process, when such process becomes a matter of public record. The

Pacific Basin Reporting Network should be exempted from this provision

to avoid revealing investigative techniques and procedures outlined in

those records and to prevent revelation of the existence of an ongoing

investigation where there is need to keep the existence of the

investigation secret.

(12) Under 5 U.S.C. 552a(g) civil remedies are provided to an

individual when an agency wrongfully refuses to amend a record or to

review a request for amendment, when an agency wrongfully refuses to

grant access to a record, when an agency fails to maintain accurate,

relevant, timely, and complete records which are used to make a

determination adverse to the individual, and when an agency fails to

comply with any other provision of 5 U.S.C. 552a so as to adversely

affect the individual.

The Pacific Basin Reporting Network is exempted from this provision

to the extent that the civil remedies may relate to this provision of 5

U.S.C. 552a from which these rules exempt the Pacific Basin Reporting

Network, since there are civil remedies for failure to comply with

provisions from which the Pacific Basin Reporting Network is exempted.

Exemption from this provision will also protect the Pacific Basin

Reporting Network from baseless civil court actions that might hamper

its ability to collate, analyze, and disseminate investigative

intelligence and law enforcement data.

A conforming amendment to 31 CFR 1.36 will be published at a later

date in the Federal Register by the Department of the Treasury.

George J. Weise,

Commissioner of Customs.

Approved:

Dated: November 14, 1996.

John P. Simpson,

Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).

Dated: November 18, 1996.

Alex Rodriguez,

Deputy Assistant Secretary (Administration).

[FR Doc. 96-30280 Filed 11-27-96; 8:45 am]

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