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[Federal Register Volume 79, Number 147 (Thursday, July 31, 2014)]
[Rules and Regulations]
[Pages 44261-44263]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-18028]

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DEPARTMENT OF JUSTICE

5 CFR Part 3801

[2013R-4F]

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

AGENCY: Department of Justice.

ACTION: Final rule; amendments.

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SUMMARY: The Department of Justice (DOJ), with the concurrence of the 
Office of Government Ethics, is amending its Supplemental Standards of 
Ethical Conduct for Employees of the Department of Justice 
(Supplemental Standards) to incorporate existing rules for Bureau of 
Alcohol, Tobacco, Firearms, and Explosives (ATF) employees that had 
initially been adopted by the Department of the Treasury (Treasury) 
when the Bureau of Alcohol, Tobacco, and Firearms was within Treasury. 
These rules, which have continued to be applicable to ATF employees 
after the transfer of authorities to DOJ, are being incorporated 
without substantive change into DOJ's Supplemental Standards. 
Additionally, this final rule designates ATF as a separate agency for 
purposes of applying the gifts and the teaching, speaking, and writing 
provisions of the Standards of Ethical Conduct for Employees of the 
Executive Branch.

DATES: This rule is effective July 31, 2014.

FOR FURTHER INFORMATION CONTACT: Denise R. Brown, Office of Regulatory 
Affairs, Bureau of Alcohol, Tobacco, Firearms and Explosives, 99 New 
York Avenue NE., Washington, DC 20226, (202) 648-7105.

SUPPLEMENTARY INFORMATION:

Background

    On August 7, 1992, the Office of Government Ethics (OGE) published 
the Standards of Ethical Conduct for Employees of the Executive Branch 
(OGE Standards). See 57 FR 35006-35067, as corrected at 57 FR 48557, 57 
FR 52483, and 60 FR 51167, with additional grace period extensions for 
certain existing provisions at 59 FR 4779-4780, 60 FR 6390-6391, and 60 
FR 66857-66858. The OGE Standards, codified at 5 CFR part 2635, 
effective February 3, 1993, established uniform standards of ethical 
conduct that apply to all executive branch personnel. Section 2635.105 
of the OGE Standards authorizes an agency, with the concurrence of OGE, 
to adopt agency-specific supplemental regulations that are necessary to 
properly implement its ethics program. In 1995, the Department of the 
Treasury (Treasury), with OGE's concurrence, established the 
Supplemental Standards of Ethical Conduct for Employees of the 
Treasury, which included additional rules for Bureau of Alcohol, 
Tobacco and Firearms employees. See 60 FR 22249-22255 (May 5, 1995), as 
codified at 5 CFR part 3101. In 1997, the Department of Justice (DOJ), 
with OGE's concurrence, established the Supplemental Standards of 
Ethical Conduct for Employees of the Department of Justice 
(Supplemental Standards). See 62 FR 23941-23943 (May 2, 1997), as 
codified at 5 CFR part 3801.
    On November 25, 2002, the President signed into law the Homeland 
Security Act of 2002, Public Law 107-296, 116 Stat. 2135. Title XI, 
Subtitle B, Section 1111 of the Act which was effective

[[Page 44262]]

January 24, 2003, transferred the ``authorities, functions, personnel, 
and assets'' of the Treasury's Bureau of Alcohol, Tobacco and Firearms 
(the Bureau), to DOJ, with the exception of certain enumerated 
authorities retained by Treasury. Section 1111 of the Act (later 
transferred in relevant part and codified at 28 U.S.C. 599A) further 
provided that the Bureau retains its identity as a distinct entity 
within DOJ known as the Bureau of Alcohol, Tobacco, Firearms and 
Explosives (ATF). The authorities retained by Treasury include the 
administration and enforcement of chapters 51 and 52 of the Internal 
Revenue Code of 1986, sections 4181 and 4182 of the Internal Revenue 
Code of 1986, and title 27 of the United States Code. The functions 
retained by Treasury became the responsibility of a new Alcohol and 
Tobacco Tax and Trade Bureau (TTB).
    As part of the separation, title 27 of the Code of Federal 
Regulations (CFR) was reorganized into two chapters, chapter I for TTB 
and chapter II for ATF. Reorganization of Title 27, Code of Federal 
Regulations, 68 FR 3744 (Jan. 24, 2003). The regulations were divided 
between the two chapters based upon the respective authorities of 
Treasury and DOJ.
    At that time, DOJ did not amend its Supplemental Standards to 
incorporate Treasury's existing rules for employees of the Bureau. 
However, pursuant to section 1111(c)(1) of the Homeland Security Act, 
and 28 U.S.C. 599A(c)(1), the authorities and functions of the Bureau 
that the Secretary of the Treasury previously exercised when the Bureau 
was part of Treasury have been transferred to DOJ. Accordingly, the 
restrictions of section 3101.105 have continued to be applicable to ATF 
employees pursuant to this transfer of authorities. However, DOJ has 
now determined that it is appropriate to incorporate in its 
Supplemental Standards Treasury's existing regulatory restrictions for 
ATF employees at 5 CFR 3101.105.

Final Rule

    This final rule incorporates the existing provisions of 5 CFR 
3101.105 into the Supplemental Standards in a new section 3801.107. 
This action carries forward the prohibited financial interests rule 
that had initially been adopted when ATF was part of Treasury, and that 
has continued to be applicable to ATF employees after the transfer of 
ATF to DOJ. Now that ATF is part of DOJ, DOJ has determined that 
continuing to prohibit ATF employees from having financial interests in 
the alcohol, tobacco, firearms, or explosives industries is necessary 
for successful implementation of its ethics program. Prohibiting ATF 
employees from having financial interests in entities that are 
regulated or inspected by or closely connected to the work of ATF is 
important for three reasons: (1) To maintain ATF's appearance of 
impartiality and objectivity in the execution of its regulatory and law 
enforcement functions; (2) to eliminate a regulated entity's concern 
that sensitive information provided to ATF might be misused for private 
gain; and (3) to avoid the large-scale recusal of employees from 
official matters resulting in an inability of ATF to fulfill its 
mission.
    Accordingly, the final rule incorporates those applicable ethics 
standards directly into the DOJ regulations. However, the new language 
in section 3801.107(b) regarding the granting of regulatory waivers 
omits reference to a provision of the Internal Revenue Code (26 U.S.C. 
7214(b)) that no longer applies to ATF employees and substitutes new 
clarifying language that gives the agency designee authority to grant a 
written waiver of the prohibition in paragraph (a) based on a 
determination that the waiver is not inconsistent with law and the OGE 
Standards, and otherwise meets the waiver standard previously 
established in section 3101.105(b).
    Additionally, this final rule will designate ATF as a separate 
agency for purposes of applying the gifts and the teaching, speaking, 
and writing provisions of the OGE Standards. Pursuant to section 
2635.203(a) of the OGE Standards, an executive department, with the 
concurrence of OGE, may designate any component that exercises distinct 
and separate functions as a separate agency for the purpose of applying 
the rules governing the solicitation or acceptance of gifts from 
prohibited sources or given because of official position. See 5 CFR 
2635.201-2635.205. Pursuant to section 2635.807(a)(2)(ii) of the OGE 
Standards, any component so designated is also considered a separate 
agency for the purpose of applying the rules governing the receipt of 
compensation by an employee for teaching, speaking, and writing. DOJ 
has determined that ATF exercises distinct and separate functions for 
purposes of applying sections 2635.201-2635.205 and section 
2635.807(a)(2)(ii).

Statutory and Executive Order Reviews

Executive Order 12866 and Executive Order 13563

    This rule has been drafted and reviewed in accordance with 
Executive Order 12866, ``Regulatory Planning and Review'' section 1(b), 
Principles of Regulation and in accordance with Executive Order 13563, 
``Improving Regulations and Regulatory Review,'' section 1(b) General 
Principles of Regulation and section 6 Retrospective Analyses of 
Existing Rules. This rule is limited to agency organization, 
management, or personnel matters as described by Executive Order 12866, 
section 3(d)(3) and, therefore, is not a ``regulation'' or ``rule'' as 
defined by that Executive Order 12866.
    This rule will not have an annual effect on the economy of $100 
million or more, nor will it adversely affect in a material way the 
economy, a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
government or communities. Accordingly, this rule is not an 
``economically significant'' rulemaking as defined in Executive Order 
12866.

Administrative Procedure Act (APA)

    Notice and comment rulemaking is not required for this final rule. 
Under the APA, ``rules of agency organization, procedure or practice,'' 
5 U.S.C. 553(b)(3)(A), that do not ``affect individual rights and 
obligations,'' Morton v. Ruiz, 415 U.S. 199, 232 (1974), are exempt 
from the general notice and comment requirements of section 553. See 
JEM Broadcasting Co. v. FCC, 22 F.3d 320, 326 (D.C. Cir. 1994) (section 
553(b)(3)(A) applies to ``agency actions that do not themselves alter 
the rights or interests of parties, although [they] may alter the 
manner in which the parties present themselves or their viewpoints to 
the agency''). The revisions to the regulations in 5 CFR part 3801 are 
purely a matter of agency organization, procedure, and practice that 
will not affect individual rights and obligations. Furthermore, 
internal delegations of authority are subject to an exception under the 
APA for ``rules of agency organization, procedure, or practice.''

Regulatory Flexibility Act

    The Attorney General, in accordance with the Regulatory Flexibility 
Act, 5 U.S.C. 605(b), has reviewed this rule and, by approving it, 
certifies that it will not have a significant economic impact on a 
substantial number of small entities because it pertains to personnel 
and administrative matters affecting the

[[Page 44263]]

Department. Further, a Regulatory Flexibility Analysis is not required 
for this final rule because the Department was not required to publish 
a general notice of proposed rulemaking for this matter.

Executive Order 12988

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

Executive Order 13132

    This rule will not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Therefore, in accordance with Executive Order 
13132, Federalism, the Department has determined that this rule does 
not have sufficient federalism implications to warrant the preparation 
of a federalism summary impact statement.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions are necessary 
under the provisions of the Unfunded Mandates Reform Act of 1995, 2 
U.S.C. 1501 et seq.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 251 of the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 
U.S.C. 804. This rule will not result in an annual effect on the 
economy of $100 million or more; a major increase in costs or prices; 
or significant adverse effects on competition, employment, investment, 
productivity, innovation, or the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets.
    This action pertains to agency management, personnel, and 
organization and does not substantially affect the rights or 
obligations of non-agency parties. Accordingly, it is not a rule for 
purposes of the reporting requirement of 5 U.S.C. 801.

Paperwork Reduction Act

    This proposed rule does not impose any new reporting or 
recordkeeping requirements under the Paperwork Reduction Act.

Congressional Review Act

    The Department of Justice has determined that this action pertains 
to agency management and, accordingly, is not a ``rule'' as that term 
is used by the Congressional Review Act (CRA), (Subtitle E of the Small 
Business Regulatory Enforcement Fairness Act, (SBREFA)). Therefore, the 
reports to Congress and the General Accounting Office specified by 
section 801 of SBREFA are not required.

Drafting Information

    The author of this document is Denise R. Brown, Office of 
Regulatory Affairs, Enforcement Programs and Services, Bureau of 
Alcohol, Tobacco, Firearms, and Explosives.

List of Subjects in 5 CFR Part 3801

    Conflicts of interest.

Authority and Issuance

    Accordingly, for the reasons discussed in the preamble, the 
Department of Justice, with the concurrence of the Office of Government 
Ethics, is amending 5 CFR part 3801 as follows:

PART 3801--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE DEPARTMENT OF JUSTICE

0
1. The authority citation for 5 CFR part 3801 is revised to read as 
follows:

    Authority: 5 U.S.C. 301, 7301; 5 U.S.C. App.; 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; E.O. 12988, 61 FR 4739; 5 CFR 
2635.105, 2635.203(a), 2635.403(a), 2635.701-2635.705, 2635.803, 
2635.807(a)(2)(ii); and DOJ Order 1200.1, Chap 11-1.

Sec.  3801.103  [Amended]

0
2. Section 3801.103(a) is amended by adding ``Bureau of Alcohol, 
Tobacco, Firearms, and Explosives (ATF)'' between ``Antitrust 
Division'' and ``Bureau of Prisons (including Federal Prison 
Industries, Inc.)'' on the list of ``Designation of separate 
Departmental components'' within the Department of Justice.

0
3. Section 3801.107 is added to read as follows:

Sec.  3801.107  Additional rules for Bureau of Alcohol, Tobacco, 
Firearms, and Explosives employees.

    The following rules apply to the employees of the Bureau of 
Alcohol, Tobacco, Firearms, and Explosives and are in addition to 
Sec. Sec.  3801.101 through 3801.106:
    (a) Prohibited financial interests. Except as provided in this 
section, no employee of ATF, or spouse or minor child of an ATF 
employee, shall have, directly or indirectly, any financial interest, 
including compensated employment, in the alcohol, tobacco, firearms or 
explosives industries. The term financial interest is defined in Sec.  
2635.403(c) of this title.
    (b) Waiver. An agency designee, with the advice and legal clearance 
of the Deputy Designated Agency Ethics Official, may grant a written 
waiver of the prohibition in paragraph (a) of this section on a 
determination that the waiver is not inconsistent with part 2635 of 
this title or otherwise prohibited by law and that, in the mind of a 
reasonable person with knowledge of the particular circumstances, the 
financial interest will not create an appearance of misuse of position 
or loss of impartiality, or call into question the impartiality and 
objectivity with which ATF's programs are administered. A waiver under 
this paragraph (b) may require appropriate conditions, such as 
execution of a written disqualification.

    Dated: July 23, 2014.
Lee J. Lofthus,
Assistant Attorney General for Administration.
    Dated: July 24, 2014.
Walter M. Shaub, Jr.,
Director, Office of Government Ethics.
[FR Doc. 2014-18028 Filed 7-30-14; 8:45 am]
BILLING CODE 4410-CW-P
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