Federal Register / Vol. 89, No. 182 / Thursday, September 19, 2024 / Proposed Rules 76783 

DEPARTMENT OF THE TREASURY 

31 CFR Part 1 

Privacy Act Exemptions 

AGENCY: Departmental Offices, 

Department of the Treasury. 

ACTION: Proposed rule. 

SUMMARY: In accordance with the 

Privacy Act of 1974, as amended 

(Privacy Act), the Department of the 

Treasury (Treasury), Departmental 

Offices gives notice of a proposed 

exemption for a new system of records 

entitled ‘‘Department of the Treasury, 

Departmental Offices .413—Outbound 

Investment Security Program 

Notification System’’ from certain 

provisions of the Privacy Act. The 

Outbound Investment Security Program 

Notification System is being established 

for information collected in connection 

with the implementation of the 

Executive order of August 9, 2023. The 

exemption is intended to comply with 

the legal prohibitions against the 

disclosure of certain kinds of 

information and to protect certain 

information maintained in this system 

of records. 

DATES: Written comments must be 

received by October 21, 2024. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

• Federal E-rulemaking Portal: 

https://www.regulations.gov. Follow the 

instructions for submitting comments. 

Electronic submission of comments 

allows the commenter maximum time to 

prepare and submit a comment and 

ensures timely receipt. 

• Mail: U.S. Department of the 

Treasury, Attention: Meena R. Sharma, 

Director, Office of Investment Security 

Policy and International Relations, 1500 

Pennsylvania Avenue NW, Washington, 

DC 20220. 

Treasury encourages comments to be 

submitted via https://

www.regulations.gov. All comments 

submitted, including attachments and 

other supporting material, will be made 

public, including any personally 

identifiable or confidential business 

information that is included in a 

comment. Therefore, commenters 

should submit only information that 

they wish to make publicly available. 

Commenters who wish to remain 

anonymous should not include 

identifying information in their 

comments. 

FOR FURTHER INFORMATION CONTACT: For 

general questions and questions 

regarding privacy issues, please contact: 

Ryan Law, Deputy Assistant Secretary 

for Privacy, Transparency, and Records, 

Department of the Treasury, 1500 

Pennsylvania Avenue NW, Washington, 

DC 20220; telephone: (202) 622–5710. 

SUPPLEMENTARY INFORMATION: 

Background 

On August 9, 2023, the President 

issued Executive Order 14105, 88 FR 

54867 (the Outbound Order), which 

declares a national emergency to 

address the threat to the United States 

posed by countries of concern, which 

seek to develop and exploit sensitive 

technologies or products critical for 

military, intelligence, surveillance, or 

cyber-enabled capabilities. Among other 

things, the Outbound Order directs the 

Secretary of the Treasury to issue 

regulations that require U.S. persons to 

provide notification of information to 

the Department of the Treasury 

(Treasury) regarding certain transactions 

involving a person of a country of 

concern that is engaged in certain 

activities involving covered national 

security technologies and products that 

may contribute to the threat to the 

national security of the United States as 

identified under the Order. The 

Outbound Order also directs the 

Secretary of the Treasury to issue 

regulations that prohibit certain 

transactions by a U.S. person involving 

a person of a country of concern that is 

engaged in certain activities involving 

covered national security technologies 

and products that pose a particularly 

acute national security threat to the 

United States. The Outbound Order 

authorizes the Secretary of the Treasury 

to exempt from applicable prohibitions 

or notification requirements any 

transaction or transactions determined 

to be in the national interest of the 

United States. On August 9, 2023, 

Treasury issued an advance notice of 

proposed rulemaking, 88 FR 54961 

(published August 14, 2023), to explain 

initial considerations and seek public 

comment on implementation of the 

Order. 

On June 21, 2024, Treasury issued a 

notice of proposed rulemaking (NPRM) 

to seek public comment on the proposed 

rule, 89 FR 55846 (published July 5, 

2024). Treasury intends to require U.S. 

persons to provide notification of 

certain transactions under its 

implementing regulations. This 

information would include relevant 

details on the U.S. person(s) involved in 

the transaction as well as information 

on the transaction and the foreign 

person(s) involved. These notifications 

would increase the U.S. Government’s 

visibility into transactions by U.S. 

persons or their controlled foreign 

entities and involving technologies and 

products relevant to the threat to the 

national security of the United States 

due to the policies and actions of 

countries of concern. These 

notifications would also be helpful in 

highlighting aggregate sector trends and 

related capital flows as well as 

informing future policy development. 

Treasury also intends to require any 

U.S. person seeking a national interest 

exemption for a particular transaction to 

submit information to Treasury 

regarding the scope of that transaction 

including, as applicable, the 

information that would be required for 

a notification under the implementing 

regulations. These transactions are the 

subject of this document. 

In a systems of records notice 

published elsewhere in this issue of the 

Federal Register, Treasury’s 

Departmental Offices is proposing to 

establish a system of records for 

information collected in connection 

with the implementation of the Order. 

Privacy Act 

Treasury, Departmental Offices is 

hereby giving notice of a proposed rule 

to exempt the Outbound Investment 

Security Program Notification System 

from certain provisions of the Privacy 

Act pursuant to 5 U.S.C. 552a(k)(1) and 

(k)(2) and the authority vested in the 

Secretary of the Treasury by 31 CFR 

1.23(c). 

Under 5 U.S.C. 552a(k)(1), the head of 

a Federal 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 subject to the 

exemption contained in section 

552(b)(1) of this title. (Freedom of 

Information Act, exemption (b)(1) 

protects from disclosure information 

that has been deemed classified ‘‘under 

criteria established by an Executive 

order to be kept secret in the interest of 

national defense or foreign policy’’ and 

is ‘‘in fact properly classified pursuant 

to such Executive order.’’) 

Under 5 U.S.C. 552a(k)(2), the head of 

a Federal agency may promulgate rules 

to exempt a system of records from 

certain provisions of 5 U.S.C. 552a if the 

system of records contains investigatory 

materials compiled for law enforcement 

purposes that are not within the scope 

of subsection (j)(2) of the Privacy Act 

(which applies to agencies and 

components thereof that perform as 

their principal function any activity 

pertaining to the enforcement of 

criminal laws). 

To the extent that this system of 

records contains classified information 

protected by 5 U.S.C. 552a(k)(1) or 

investigatory materials compiled for law 


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76784 Federal Register / Vol. 89, No. 182 / Thursday, September 19, 2024 / Proposed Rules 

enforcement purposes protected by 5 

U.S.C. 552a(k)(2), Treasury proposes to 

exempt the following system of records 

from various provisions of the Privacy 

Act: 

DO .413—Outbound Investment 

Security Program Notification System 

Under 5 U.S.C. 552a(k)(1) and (k)(2), 

Treasury proposes that certain records 

in the above-referenced system of 

records be exempt from 5 U.S.C. 

552a(c)(3), (d)(1) through (4), (e)(1), 

(e)(4)(G) through (I), and (f) of the 

Privacy Act. See 31 CFR 1.36. 

The following are the reasons why the 

classified records and investigatory 

materials contained in the abovereferenced system of records may be 

exempted from various provisions of the 

Privacy Act pursuant to 5 U.S.C. 

552a(k)(1) and (2). 

1. 5 U.S.C. 552a(c)(3) requires an 

agency to make any accounting of 

disclosures of records required by 5 

U.S.C. 552a(c)(1) available to the 

individual named in the record upon 

his or her request. Exemption from this 

requirement is appropriate because 

release of the accounting of disclosures 

of the records in this system could alert 

individuals whether they have been 

identified as the subject of an analysis 

related to the national security interests 

of the United States, to the existence of 

the analysis, and reveal the interest on 

the part of Treasury as well as the 

recipient agency. Disclosure of the 

accounting would present a serious 

impediment to efforts to protect national 

security interests by giving individuals 

an opportunity to learn whether they 

have been identified as subjects of a 

national security-related analysis. As 

further described in the following 

paragraph, access to such knowledge 

would impair Treasury’s ability to carry 

out its mission, since individuals could: 

i. Take steps to avoid analysis; 

ii. Inform associates that a national 

security analysis is in progress; 

iii. Learn the nature of the national 

security analysis; 

iv. Learn the scope of the national 

security analysis; 

v. Begin, continue, or resume conduct 

that may pose a threat to national 

security upon inferring they may not be 

part of a national security analysis 

because their records were not 

disclosed; or 

vi. Destroy information relevant to the 

national security analysis. 

2. 5 U.S.C. 552a(d)(1) through (4) 

grant individuals access to records 

containing information about them and 

permit them to request amendment of a 

record pertaining to them and require 

the agency either to amend the record or 

note the disputed portion of the record 

and, if the agency refuses to amend the 

record, to provide a copy of the 

individual’s statement of disagreement 

with the agency’s refusal, to persons or 

other agencies to whom the record is 

thereafter disclosed. Exemption from 

this requirement is appropriate because 

access to a portion of the records 

contained in this system of records 

could inform individuals whether they 

have been identified as the subject of an 

analysis related to the national security 

interests of the United States, to the 

existence of the analysis and reveal the 

interest on the part of Treasury or 

another agency. Access to the records 

would present a serious impediment to 

efforts to protect national security 

interests by permitting the individual 

who is the subject of a record to learn 

whether they have been identified as a 

subject of a national security-related 

analysis. Access to such knowledge 

would impair Treasury’s ability to carry 

out its mission, since individuals could 

take steps to impede the analysis and 

avoid detection, including the steps 

described in paragraphs 1.i. through vi. 

of this section. Amendment of the 

records would interfere with ongoing 

analysis and impose an impossible 

administrative burden. The information 

contained in the system may also 

include classified information, the 

release of which would pose a threat to 

the national security of the United 

States. In addition, permitting access 

and amendment to such information 

could disclose sensitive security 

information that could be detrimental to 

Treasury. 

3. 5 U.S.C. 552a(e)(1) requires an 

agency to 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. Exemption from this requirement 

is appropriate because what information 

is relevant and necessary may not 

always be apparent at the time of 

collection. In the interests of national 

security, it is appropriate to include a 

broad range of information that may aid 

in identifying and assessing the nature 

and scope of national security threats to 

the United States. Additionally, the 

accuracy of information obtained or 

introduced occasionally may be unclear, 

or the information may not be strictly 

relevant or necessary to a specific 

analysis. In the interests of national 

security, it is appropriate to retain all 

information that may aid in establishing 

patterns of suspicious activity. 

4. 5 U.S.C. 552a(e)(4)(G) throuh (I) 

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

to publish the agency procedures 

whereby individuals can be notified if 

the system of records pertains to them, 

how they can gain access to any record 

pertaining to them in the system of 

records and contest its content, and the 

categories of sources of records in the 

system. Exemption from these 

requirements is appropriate because, as 

noted above, this system is exempt from 

the access and amendment provisions of 

subsection (d). 

Any records from another Treasury 

system of records or another Executive 

Branch agency’s system of records for 

which an exemption is claimed under 5 

U.S.C. 552a(j) or (k) that may also be 

included in this system of records 

retains the same exempt status as such 

records have in the system for which 

such exemption is claimed. 

Regulatory Analysis 

This proposed rule is not a 

‘‘significant regulatory action’’ under 

Executive Order 12866. Pursuant to the 

requirements of the Regulatory 

Flexibility Act (RFA), 5 U.S.C. 601 et 

seq., it is hereby certified that this 

proposed rule will not have a significant 

economic impact on a substantial 

number of small entities. This proposed 

rule, issued pursuant to 5 U.S.C. 

552a(k), is to exempt certain 

information maintained by Treasury in 

the above-referenced systems of records 

from certain provisions of the Privacy 

Act. Small entities, as defined in the 

RFA, are not provided rights under the 

Privacy Act and are outside the scope of 

this regulation. 

The related information collections 

have been submitted to the Office of 

Management and Budget on July 8, 2024 

under control number: 202407–1505– 

002. 

List of Subjects in 31 CFR Part 1 

Courts, Freedom of information, 

Government employees, Privacy. 

For the reasons stated in the 

preamble, Treasury proposes to amend 

31 CFR part 1 as follows: 

PART 1—DISCLOSURE OF RECORDS 

■ 1. The authority citation for part 1 

continues to read as follows: 

Authority: 5 U.S.C. 301, 552, 552a, 553; 

31 U.S.C. 301, 321; 31 U.S.C. 3717. 

■ 2. Amend § 1.36 by adding, in 

alphanumeric order, an entry for ‘‘DO 

.413—Outbound Investment Security 

Program Notification System’’ in table 8 

to paragraph (e)(1)(ii) and table 11 to 

paragraph (g)(1)(ii) to read as follows: 


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Federal Register / Vol. 89, No. 182 / Thursday, September 19, 2024 / Proposed Rules 76785 

§ 1.36 Systems exempt in whole or in part 

from provisions of the Privacy Act and this 

part. 

* * * * * 

(e) * * * 

(1) * * * 

(ii) * * * 

TABLE 8 TO PARAGRAPH (e)(1)(ii) 

No. Name of system 

*******

DO .413 .................................................................................................... Outbound Investment Security Program Notification System. 

* * * * * 

(g) * * * 

(1) * * * 

(ii) * * * 

TABLE 11 TO PARAGRAPH (g)(1)(ii) 

No. Name of system 

*******

DO .413 .................................................................................................... Outbound Investment Security Program Notification System. 

* * * * * Dated: September 12, 2024. 

Ryan Law, 

Deputy Assistant Secretary for Privacy, 

Transparency, and Records. 

[FR Doc. 2024–21278 Filed 9–18–24; 8:45 am] 

BILLING CODE 4810–AK–P 


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