4642 Federal Register / Vol. 62, No. 21 / Friday, January 31, 1997 / Rules and Regulations

Subpart A—Registration

8. Section 3.33 is amended by revising

paragraph (c)(1) to read as follows:

§ 3.33 Withdrawal from registration.

* * * * *

(c)(1) Where a futures commission

merchant or an introducing broker

which is not operating pursuant to a

guarantee agreement is requesting

withdrawal from registration in that

capacity and the basis for withdrawal

under paragraph (a)(1) of this section is

that it has ceased engaging in activities

requiring registration, the request for

withdrawal must be accompanied by a

Form 1–FR–FCM or a Form 1–FR–IB,

respectively, which contains the

information specified in § 1.10(d)(1) of

this chapter as of a date not more than

30 days prior to the date of the

withdrawal request: Provided, however,

That if such registrant is also registered

with the Securities and Exchange

Commission as a securities broker or

dealer, it may file a copy of its Financial

and Operational Combined Uniform

Single Report under the Securities

Exchange Act of 1934, Part II or Part IIA

(in accordance with § 1.10(h) of this

chapter), in lieu of Form 1–FR–FCM or

Form 1–FR–IB. Any financial report

submitted pursuant to this paragraph

(c)(1) must contain the information

specified in § 1.10(d)(1) of this chapter

as of a date not more than 30 days prior

to the date of the withdrawal request.

* * * * *

PART 145—COMMISSION RECORDS

AND INFORMATION

9. The authority citation for Part 145

continues to read as follows:

Authority: Pub. L. 89–554, 80 Stat. 383,

Pub. L. 90–23, 81 Stat. 54, Pub. L. 93–502,

88 Stat. 1561–1564 (5 U.S.C. 552); Sec.

101(a), Pub. L. 93–463, 88 Stat. 1389 (5

U.S.C. 4a(j)); Pub. L. 99–570, unless

otherwise noted.

§ 145.5 [Amended]

10. Section 145.5 is amended by

removing and reserving paragraph

(d)(1)(i)(G).

PART 147—OPEN COMMISSION

MEETINGS

11. The authority citation for Part 147

continues to read as follows:

Authority: Sec. 3(a), Pub. L. 94–409, 90

Stat. 1241 (5 U.S.C. 552b); Sec. 101(a)(11),

Pub. L. 93–463, 88 Stat. 1391 (7 U.S.C. 4a(j)

(Supp. V 1975)), unless otherwise noted.

§ 147.3 [Amended]

12. Section 147.3 is amended by

removing and reserving paragraph

(b)(4)(i)(A)(7).

Issued in Washington, D.C. on January 21,

1997 by the Commission.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 97–2251 Filed 1–30–97; 8:45 am]

BILLING CODE 6351–01–P

TENNESSEE VALLEY AUTHORITY

18 CFR Part 1301

Privacy Act Regulations;

Implementation

AGENCY: Tennessee Valley Authority.

ACTION: Final rule.

SUMMARY: The Tennessee Valley

Authority (TVA) amends its regulations

implementing the Privacy Act of 1974

(the Act), 5 U.S.C. 552a. These

amendments are needed to modify

existing TVA regulations to exempt a

system of records known as TVA Police

Records (TVA–37) from certain

provisions of the Act and corresponding

agency regulations.

EFFECTIVE DATE: January 31, 1997.

FOR FURTHER INFORMATION: Wilma H.

McCauley, (423) 751–2523.

SUPPLEMENTARY INFORMATION: These

amendments allow exemptions

authorized by the Act, 5 U.S.C.

552a(j)(2) and (k)(2), for the TVA Police

Records—TVA system of records under

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

(j)(2) and (k)(2) of the Act, TVA, through

rulemaking, may exempt those systems

of records maintained by a component

of TVA that performs as its principal

function any activity pertaining to the

enforcement of criminal laws from

certain provisions of the Act, if the

system of records is used for certain law

enforcement purposes.

The TVA Police is a component of

TVA that performs as one of its

principal functions investigations into

violations of criminal law in connection

with TVA’s programs and operations,

pursuant to the Violent Crime Control

and Law Enforcement Act of 1994, as

amended, the TVA Police Records

system of records falls within the scope

of subsections (j)(2); i.e., information

compiled for the purpose of criminal

investigation, reports relating to any

stage of the enforcement process, and

information compiled for the

identification of individual criminals,

and (k)(2); i.e., investigatory material

compiled for law enforcement purposes,

other than material within the scope of

(k)(2) above.

The (j)(2) and (k)(2) exemptions for

criminal law enforcement records

remove restrictions on the manner in

which information may be collected and

the type of information that may be

collected by the TVA Police in the

course of a criminal investigation, limit

certain notice requirements, and exempt

the system of records from civil

remedies for violations of the Act. These

additional exemptions are necessary

primarily to avoid premature disclosure

of sensitive information, including, but

not limited to, the existence of a

criminal investigation, that may

compromise or impede the

investigation.

A more complete explanation of each

exemption follows, as required by the

Act.

TVA adds the following to the current

exemptions contained in 18 CFR

1301.24.

Exemptions Pursuant to (j)(2) and (k)(2)

TVA has determined that the TVA

Police Records should be exempt from

the following provisions of the Privacy

Act and corresponding agency

regulations. These exemptions are

necessary and appropriate to maintain

the integrity and confidentiality of

criminal investigations.

TVA will use the (j)(2) and (k)(2)

exemptions for the following reasons:

(a) 5 U.S.C. 552a(c)(3) requires an

agency to make the accounting of each

disclosure of records available to the

individual named in the record at his/

her request. This accounting must state

the date, nature and purpose of each

disclosure of a record and the name and

address of the recipient. Accounting for

each disclosure could alert the subject

of an investigation to the existence and

nature of the investigation and reveal

investigative or prosecutive interest by

other agencies, particularly in a jointinvestigation situation. This could

seriously impede or compromise the

investigation and case preparation by

prematurely revealing its existence and

nature; compromise or interfere with

witnesses or make witnesses reluctant to

cooperate with the investigators; lead to

suppression, alteration, fabrication, or

destruction of evidence; and endanger

the physical safety of confidential

sources, witnesses, law enforcement

personnel and their families.

(b) 5 U.S.C. 552a(c)(4) requires an

agency to inform outside parties of

correction of and notation of disputes

about information in a system in

accordance with subsection (d) of the

Privacy Act. Since this system of

records is already exempted from the

access provisions of subsection (d) of

the Privacy Act, this section is not

properly applicable.

(c) 5 U.S.C. 552a (d) and (f) require an

agency to provide access to records,

make corrections and amendments to
Federal Register / Vol. 62, No. 21 / Friday, January 31, 1997 / Rules and Regulations 4643

records, and notify individuals of the

existence of records upon their request.

Providing individuals with access to

records of an investigation and the right

to contest the contents of those records

and force changes to be made to the

information contained therein would

seriously interfere with and thwart the

orderly and unbiased conduct of the

investigation and impede case

preparation. Providing the access

normally afforded under the Privacy Act

would provide the subject with valuable

information that would allow

interference with or compromise of

witnesses or render witnesses reluctant

to cooperate with investigators; lead to

suppression, alteration, fabrication, or

destruction of evidence; endanger the

physical safety of confidential sources,

witnesses, law enforcement personnel

and their families; and result in the

secreting of or other disposition of

assets that would make them difficult or

impossible to reach to satisfy any

Government claims growing out of the

investigation.

(d) 5 U.S.C. 552a(e)(1) requires an

agency to maintain in agency records

only ‘‘relevant and necessary’’

information about an individual. This

provision is inappropriate for

investigations, because it is not always

possible to detect the relevance or

necessity of each piece of information in

the early stages of an investigation. In

some cases, it is only after the

information is evaluated in light of other

evidence that its relevance and

necessity will be clear. In other cases,

what may appear to be a relevant and

necessary piece of information may

become irrelevant in light of further

investigation.

In addition, during the course of an

investigation, the investigator may

obtain information that relates primarily

to matters under the investigative

jurisdiction of another agency (e.g., the

fraudulent use of Social Security

numbers), and that information may not

be reasonably segregated. In the interest

of effective law enforcement, TVA

Police should retain this information,

since it can aid in establishing patterns

of criminal activity and can provide

valuable leads for Federal and other law

enforcement agencies.

(e) 5 U.S.C. 552a(e)(2) requires an

agency 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 general rule that

information be collected ‘‘to the greatest

extent practicable’’ from the target

individual is not appropriate in

investigations. TVA Police should be

authorized to use their professional

judgment as to the appropriate sources

and timing of an investigation. Often it

is necessary to conduct an investigation

so that the target does not suspect that

he or she is being investigated. The

requirement to obtain the information

from the targeted individual may put

the suspect on notice of the

investigation and thereby thwart the

investigation by enabling the suspect to

destroy evidence and take other action

that would impede the investigation.

This requirement may also in some

cases preclude TVA Police from

gathering information and evidence

before interviewing an investigative

target in order to maximize the value of

the interview by confronting the target

with the evidence or information.

Moreover, in certain circumstances the

subject of an investigation cannot be

required to provide information to

investigators and information must be

collected from other sources.

Furthermore, it is often necessary to

collect information from sources other

than the subject of the investigation to

verify the accuracy of the evidence

collected.

In addition, the statutory term ‘‘to the

greatest extent practicable’’ is a

subjective standard, and it is impossible

adequately to define the term so that

individual TVA Police investigators can

consistently apply it to the many fact

patterns presented in TVA Police

investigations.

(f) 5 U.S.C. 552a(e)(3) requires an

agency to inform each person whom it

asks to supply information, on a form

that can be retained by the person, of

the authority under which the

information is sought and whether

disclosure is mandatory or voluntary; of

the principal purpose for which the

information is intended to be used; of

the routine uses which may be made of

the information; and of the effects on

the person, if any, of not providing all

or any part of the requested information.

The application of this provision could

provide the subject of an investigation

with substantial information about the

nature of that investigation that could

interfere with the investigation.

Moreover, providing such a notice to the

subject of an investigation could

seriously impede or compromise an

undercover investigation by revealing

its existence and could endanger the

physical safety of confidential sources,

witnesses, and investigators by

revealing their identities.

(g) 5 U.S.C. 552a(e)(4) (G) and (H)

require an agency to publish a Federal

Register notice concerning its

procedures for notifying an individual

at his/her request, if the system of

records contains a record pertaining to

him/her, how to gain access to such a

record and how to contest its content.

Since these systems of records are being

exempted from subsection (f) of the Act,

concerning agency rules, and subsection

(d) of the Act, concerning access to

records, these requirements are

inapplicable to the extent that these

systems of records will be exempted

from these subsections. Although the

system would be exempt from these

requirements, TVA Police has published

information concerning its notification,

access, and contest procedures because,

under certain circumstances, TVA

Police could decide it is appropriate for

an individual to have access to all or a

portion of his/her records in these

systems of records.

(h) 5 U.S.C. 552a(e)(4)(I) requires an

agency to publish notice of the

categories of sources or records in the

system of records. To the extent that this

provision is construed to require more

detailed disclosure than the broad,

generic information currently published

in the system notice, an exemption from

this provision is necessary to protect the

confidentiality of sources of

information, to protect privacy and

physical safety of witnesses and

informants, and to avoid the disclosure

of investigative techniques and

procedures. TVA Police will,

nevertheless, publish such a notice in

broad generic terms.

(i) 5 U.S.C. 552a(e)(5) requires an

agency to maintain its records with such

accuracy, relevance, timeliness, and

completeness as is reasonably necessary

to assure fairness to the individual in

making any determination about the

individual. Much the same rationale is

applicable to this exemption as that set

out previously in item (d) (duty to

maintain in agency records only

‘‘relevant and necessary’’ information

about an individual). While the TVA

Police make every effort to maintain

records that are accurate, relevant,

timely, and complete, it is not always

possible in an investigation to

determine with certainty that all the

information collected is accurate,

relevant, timely, and complete. During a

thorough investigation, a trained

investigator would be expected to

collect allegations, conflicting

information, and information that may

not be based upon the personal

knowledge of the provider. At the point

of determination to refer the matter to a

prosecutive agency, for example, that

information would be in the system of

records, and it may not be possible until

further investigation is conducted, or

indeed in many cases until after a trial
4644 Federal Register / Vol. 62, No. 21 / Friday, January 31, 1997 / Rules and Regulations

(if at all), to determine the accuracy,

relevance, and completeness of some

information. This requirement would

inhibit the ability of trained

investigators to exercise professional

judgment in conducting a thorough

investigation. Moreover, fairness to

affected individuals is assured by the

due process they are accorded in any

trial or other proceeding resulting from

the TVA Police investigation.

(j) 5 U.S.C. 552a(e)(8) requires an

agency to make reasonable efforts to

serve notice on an individual when any

record on such individual is made

available under compulsory legal

process when such process becomes a

matter of public record. Compliance

with this provision could prematurely

reveal and compromise an ongoing

criminal investigation to the target of

the investigation and reveal techniques,

procedures, or evidence.

(k) 5 U.S.C. 552a(g) provides for civil

remedies if an agency fails to comply

with the requirements concerning

access to records under subsections (d)

(1) and (3) of the Act; maintenance of

records under subsection (e)(5) of the

Act; and any other provision of the Act,

or any rule promulgated thereunder, in

such a way as to have an adverse effect

on an individual. Allowing civil

lawsuits for alleged Privacy Act

violations by TVA Police would

compromise TVA Police investigations

by subjecting the sensitive and

confidential information in the TVA

Police Records to the possibility of

inappropriate disclosure under the

liberal civil discovery rules. That

discovery may reveal confidential

sources, the identity of informants, and

investigative procedures and

techniques, to the detriment of the

particular criminal investigation as well

as other investigations conducted by the

TVA Police.

The pendency of such a suit would

have a chilling effect on investigations,

given the possibility of discovery of the

contents of the investigative case file,

and a Privacy Act lawsuit could

therefore become a ready strategic

weapon used to impede TVA Police

investigations. Furthermore, since,

under the current regulations, the

system is exempt from many of the Act’s

requirements, it is unnecessary and

contradictory to provide for civil

remedies from violations of those

provisions in particular.

This final rule has been reviewed

under Executive Order No. 12291 and

has been determined not to be a ‘‘major

rule’’ since it will not have an annual

effect on the economy of $100 million

or more.

In addition, it has been determined

that this final rule will not have a

significant economic impact on a

substantial number of small entities.

List of Subjects in 18 CFR Part 1301

Administrative practice and

procedure, Freedom of Information,

Privacy Act, Sunshine Act.

For the reasons set forth in the

preamble, 18 CFR Ch. XIII, part 1301, is

amended as follows:

PART 1301—PROCEDURES

1. The authority citation for part 1301

continues to read as follows:

Authority: 16 U.S.C. 831–831dd, 5 U.S.C.

552.

§ 1301.24 [Amended]

2. Section 1301.24(e) is added to read

as follows:

* * * * *

(e) The TVA system TVA Police

Records is exempt from subsections

(c)(3), (d), (e)(1), (e)(4), (G), (H), and (I)

and (f) of 5 U.S.C. 552a (section 3 of the

Privacy Act) and corresponding sections

of these rules pursuant to 5 U.S.C.

552a(k)(2). The TVA system Police

Records is exempt from subsections

(c)(3), (d), (e)(1), (e)(2), (e)(3), (e)(4)(G),

(H), and (I), (e)(5), (e)(8), and (g)

pursuant to 5 U.S.C. 552a(j)(2). This

system is exempt because application of

these provisions might alert

investigation subjects to the existence or

scope of investigations, lead to

suppression, alteration, fabrication, or

destruction of evidence, disclose

investigative techniques or procedures,

reduce the cooperativeness or safety of

witnesses, or otherwise impair

investigations.

William S. Moore,

Senior Manager, Administrative Services.

[FR Doc. 97–2299 Filed 1–30–97; 8:45 am]

BILLING CODE 8120–08–U

DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1311

[DEA Number 146I]

RIN 1117–AA38

Exemption From Import and Export

Requirements for Personal Medical

Use; Interpretation Regarding Effect of

State Law and Federal Laws

AGENCY: Drug Enforcement

Administration (DEA), Justice.

ACTION: Final rule; interpretation of

existing regulations.

SUMMARY: Current DEA regulations

provide an exemption from certain

provisions of the Controlled Substances

Import Export Act (CSIEA) regarding

personal use quantities of certain

controlled substances. DEA is amending

the language of the exemption to

incorporate an existing provision that

controlled substances for personal use

may be imported only to the extent that

such importation is authorized or

permitted under other Federal laws or

state law. Recent occurrences have

demonstrated that the exemption is

being improperly promoted and used as

a means to import controlled substances

for abuse purposes in violation of other

Federal laws and state law. This action

will prevent misinterpretation of the

circumstances under which the

exemption applies.

EFFECTIVE DATE: January 31, 1997.

FOR FURTHER INFORMATION CONTACT:

G. Thomas Gitchel, Chief, Liaison and

Policy Section, Office of Diversion

Control, Drug Enforcement

Administration, Washington, D.C.

20537, Telephone (202) 307–7297.

SUPPLEMENTARY INFORMATION: The

CSIEA provides in 21 U.S.C. 956(a) that

the Attorney General may, by

regulation, exempt an individual who

has a controlled substance for personal

medical use from the import/export

requirements of 21 U.S.C. 952–955.

Pursuant to title 21, Code of Federal

Regulations (CFR), 1311.27, individuals

may enter or depart the United States

with a controlled substance in

Schedules II, III, IV, or V, that they have

lawfully obtained for personal medical

use, provided that the controlled

substance is in the original container in

which it was dispensed and the

appropriate declaration is made to the

United States (U.S.) Customs Service.

However, the exemption must be read

within the context of the existing

requirements of 21 CFR 1307.02, which

states that nothing in DEA’s regulations

can be construed as authorizing or

permitting any person to do any act that

is not authorized or permitted under

other Federal or state laws.

DEA, the U.S. Customs Service, and

independent sources have found that

the personal medical use exemption

found in 21 CFR 1311.27 is being

promoted and exploited as a means to

import controlled substances for

purposes of trafficking and abuse.

Especially troubling is the fact that

controlled substances that are not

approved for marketing or distribution

in the United States are being imported

in this manner for trafficking and abuse

purposes in amounts that represent a

danger to the public health and safety.