101884 Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Rules and Regulations 

to regular visitors at 28 CFR part 540, 

subpart D. In coordination with their 

client, attorneys may seek to be added 

to their client’s regular social visiting 

list and visit under the same conditions 

as other visitors in accordance with part 

540, subpart D. 

Again, this comment is out of scope 

of what was addressed in the interim 

final rule. Such social visits are 

conducted in an open setting, not a 

confidential setting for attorneys to meet 

with their clients privately. By contrast, 

confidential attorney visits, which are 

the subject of this rule, are governed by 

part 543. To the extent the commenter’s 

suggestion is intended to be construed 

as a petition for rulemaking pursuant to 

5 U.S.C. 553(e), a comment to a rule 

pertaining to a different issue in a 

different set of regulations is not the 

proper mechanism to present such a 

petition. Thus, the BOP concludes that 

no changes are needed in the final rule 

in light of this comment. 

The commenter also urges that the 

rule clarify whether attorneys are 

required to submit the same personal 

information as other visitors to be added 

to the inmate’s approved social visitor 

list. As noted, attorneys may seek to be 

added to their client’s regular social 

visiting list and visit under the same 

conditions as other visitors pursuant to 

separate rules applicable to regular 

visitors at 28 CFR part 540, subpart D, 

and the more granular details regarding 

the processing of social visits are 

addressed in the BOP policy 

implementing those provisions. The 

BOP declines to make changes to Part 

543 in response to this comment. 

For the foregoing reasons, we 

conclude that no changes are needed in 

the regulatory language in § 543.13(c) 

and (e) as adopted in the interim final 

rule, and that no other changes are 

needed in BOP’s regulations in 

connection with this specific 

rulemaking action. Accordingly, this 

rule finalizes the interim final rule 

without change. 

IV. Regulatory Certifications 

Executive Orders 12866, 13563 and 

14094. This rule does not fall within a 

category of actions that the Office of 

Management and Budget (OMB) has 

determined constitutes a ‘‘significant 

regulatory action’’ under section 3(f) of 

Executive Order 12866 and, 

accordingly, it was not reviewed by 

OMB. The economic impact of this final 

rule is limited to inmates in the custody 

of the Bureau of Prisons and their 

attorneys. 

Executive Order 13132. This rule will 

not have substantial direct effect on the 

States, on the relationship between the 

National Government and the States, or 

on distribution of power and 

responsibilities among the various 

levels of government. Therefore, under 

Executive Order 13132, BOP determines 

that this rule does not have sufficient 

federalism implications to warrant the 

preparation of a Federalism Assessment. 

Executive Order 12988—Civil Justice 

Reform (Plain Language). This final rule 

meets the applicable standards set forth 

in sections 3(a) and 3(b)(2) of Executive 

Order 12988 to specify provisions in 

clear language. Pursuant to section 

3(b)(1)(I) of the Executive Order, 

nothing in this final rule or any 

previous rule (or in any administrative 

policy, directive, ruling, notice, 

guideline, guidance, or writing) directly 

relating to the Program that is the 

subject of this final rule is intended to 

create any legal or procedural rights 

enforceable against the United States. 

Regulatory Flexibility Act. The 

Director of the Bureau of Prisons, under 

the Regulatory Flexibility Act (5 U.S.C. 

605(b)), reviewed this rule and by 

approving it certifies that it will not 

have a significant economic impact 

upon a substantial number of small 

entities for the following reasons: This 

rule pertains to the correctional 

management of offenders and detainees 

committed to the custody of the 

Attorney General or the Director of the 

Bureau of Prisons, and its economic 

impact is limited to BOP’s appropriated 

funds. 

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 $100,000,000 or more 

(as adjusted for inflation) in any one 

year, and it will not significantly or 

uniquely affect small governments. 

Therefore, no actions were deemed 

necessary under the provisions of the 

Unfunded Mandates Reform Act of 

1995. 

Congressional Review Act. This rule is 

a not major rule as defined by the 

Congressional Review Act, 5 U.S.C. 804. 

List of Subjects in 28 CFR Part 543 

Prisoners, Legal Activities. 

PART 543—LEGAL MATTERS 

■ Accordingly, under rulemaking 

authority vested in the Attorney General 

in 5 U.S.C 301; 28 U.S.C. 509, 510 and 

delegated to the Director of the Bureau 

of Prisons in 28 CFR 0.96, BOP adopts 

the interim final rule on this subject, 

published at 89 FR 8330 on Feb. 7, 

2024, as a final rule, without change. 

Colette S. Peters, 

Director, Federal Bureau of Prisons. 

[FR Doc. 2024–29681 Filed 12–16–24; 8:45 am] 

BILLING CODE 4410–05–P 

DEPARTMENT OF LABOR 

Wage and Hour Division 

29 CFR Part 531 

RIN 1235–AA44 

Tip Regulations Under the Fair Labor 

Standards Act (FLSA); Restoration of 

Regulatory Language 

AGENCY: Wage and Hour Division, 

Department of Labor. 

ACTION: Final rule; technical 

amendment. 

SUMMARY: On October 29, 2021, the U.S. 

Department of Labor (Department) 

published a final rule (2021 Dual Jobs 

Rule) addressing the determination of 

when a tipped employee is employed in 

dual jobs under the Fair Labor 

Standards Act (FLSA or the Act). The 

2021 Dual Jobs Rule took effect on 

December 28, 2021.On October 29, 

2024, a federal appeals court issued an 

order vacating regulatory text from the 

Department’s 2021 Dual Jobs Rule, with 

the effect of reinstating the Department’s 

original FLSA regulation on the topic. In 

accordance with that court order, the 

Department is issuing this final rule to 

remove from the Code of Federal 

Regulations (CFR) the corresponding 

regulatory text that the Department 

promulgated through the 2021 Dual Jobs 

Rule and reinstate regulatory text as it 

existed in the CFR prior to the effective 

date of the 2021 Dual Jobs Rule. This 

action is a technical amendment 

accounting for changes in the law which 

have already occurred. 

DATES: This rule is effective December 

17, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Daniel Navarrete, Director of Division of 

Regulations, Legislation, and 

Interpretation, Wage and Hour Division, 

U.S. Department of Labor, Room S– 

3502, 200 Constitution Avenue NW, 

Washington, DC 20210, telephone: (202) 

693–0406 (this is not a toll-free 

number). Alternative formats are 

available upon request by calling 1– 

866–487–9243. If you are deaf, hard of 

hearing, or have a speech disability, 

please dial 7–1–1 to access 

telecommunications relay services. 

SUPPLEMENTARY INFORMATION: 


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Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Rules and Regulations 101885 

1See Fair Labor Standards Amendments of 1966, 

Public Law 89–601, sec. 101, 80 Stat. 830, 830 

(1966); see also 29 U.S.C. 203(m)(2)(A). 

2See Fair Labor Standards Amendments of 1989, 

Public Law 101–157, sec. 5, 103 Stat. 938, 941 

(1989) (requiring employers to pay a cash wage of 

at least ‘‘50 percent of the [$4.25 per hour] 

minimum wage rate after March 31, 1991’’). 

Although subsequent FLSA Amendments have 

increased the federal minimum wage, those 

amendments did not change the $2.13 per hour 

minimum cash wage for tipped employees, which 

has been in effect since April 1, 1991. 

3 29 U.S.C. 203(t). 

4See 32 FR 13575 (Sept. 28, 1967). 

5See 32 FR 13580–81 (codified at 29 CFR 

531.56(e)). 

6 In 2011, the Department issued a technical 

correction to its original dual jobs regulation by 

updating the amount of tips needed to qualify as a 

tipped employee under section 3(t) of the FLSA 

from $20 per month to $30 per month, see 76 FR 

18855, accounting for the increase of that statutory 

threshold effectuated by the 1977 FLSA 

Amendments. See Fair Labor Standards 

Amendments of 1977, Public Law 95–151, sec. 3, 

91 Stat. 1245, 1249 (1977). The 2011 rule did not 

otherwise change the Department’s original dual 

jobs regulation. 

7See 85 FR 86767–72, 86790. 

8 Id. at 86756. 

9See 86 FR 11632. 

10See 86 FR 15811. 

11See 86 FR 22597. 

12See 86 FR 60138. 

13 86 FR 60158 (codified at 29 CFR 531.56(f)(4)). 

Specifically, the 2021 Dual Jobs Rule provided that 

tipped employees must receive the full minimum 

wage from their employer whenever untipped 

support work exceeds 20 percent of their workweek 

or 30 continuous minutes. Id. The 2021 Dual Job 

Rule also provided examples of tasks that fall into 

the following three categories: (1) tip-producing 

work; (2) work that directly supports tip-producing 

work; and (3) work that is not part of a tipped 

occupation. 86 FR 60157–58 (codified at 29 CFR 

531.56(f)(2)–(3) and (5)). 

I. Background and Basis for the 

Restoration of Regulatory Text 

Section 6(a) of the FLSA requires 

covered employers to pay nonexempt 

employees a minimum wage of at least 

$7.25 per hour. See 29 U.S.C. 206(a). 

Since 1966, section 3(m) of the FLSA 

has permitted employers that meet 

certain requirements to satisfy a portion 

of their minimum wage obligation to a 

‘‘tipped employee’’ by taking a partial 

credit, commonly known as a ‘‘tip 

credit,’’ toward the minimum wage 

based on the amount of tips that the 

tipped employee receives.1 An 

employer that elects to take a tip credit 

cannot satisfy the entirety of the 

minimum wage requirement with tips 

because the employer must pay the 

tipped employee a direct cash wage of 

at least $2.13 per hour.2 Based on the 

current Federal minimum wage of $7.25 

per hour, the employer may claim a tip 

credit against its wage obligation of up 

to $5.12 per hour towards its minimum 

wage obligation for a tipped employee, 

provided—among other criteria—that 

the employee actually receives 

sufficient tips to earn not less than the 

FLSA minimum wage. 

Section 3(t) of the FLSA defines a 

‘‘tipped employee’’ as ‘‘any employee 

engaged in an occupation in which [the 

employee] customarily and regularly 

receives more than $30 a month in 

tips.’’ 3 The Department promulgated 

the original FLSA regulations for tipped 

employees in 1967, the year after 

Congress first created the tip credit 

provision.4 As part of that rulemaking, 

the Department included a ‘‘dual jobs’’ 

provision, recognizing that an employee 

may be employed by the same employer 

both in a tipped occupation and in a 

non-tipped occupation, for example, 

‘‘where a maintenance man in a hotel 

also serves as a waiter.’’ 29 CFR 

531.56(e) (1967).5 This provision 

explained that an employee is a ‘‘tipped 

employee’’ for the purposes of section 

3(t) only while the employee is engaged 

in the tipped occupation, and their 

employer may take a tip credit against 

its minimum wage obligation only for 

the time the employee spends in that 

tipped occupation. Id. At the same time, 

the regulation recognized that tipped 

employees may perform ‘‘related’’ 

duties that are not ‘‘themselves . . . 

directed toward producing tips,’’ and 

used the example of a server who 

‘‘spends part of her time’’ performing 

non-tipped duties, such as ‘‘cleaning 

and setting tables, toasting bread, 

making coffee and occasionally washing 

dishes or glasses.’’ Id.6

On December 30, 2020, the 

Department published Tip Regulations 

Under the Fair Labor Standards Act 

(FLSA), 85 FR 86756 (2020 Tip Rule), a 

final rule revising various regulatory 

requirements related to the treatment of 

tipped employees under the FLSA. 

Among other changes, the 2020 Tip 

Rule would have revised the 

Department’s original dual jobs 

regulation at 29 CFR 531.56(e) 

consistent with subregulatory guidance 

issued by the Department in 2018 and 

2019,7 but the dual jobs provisions in 

the 2020 Tip Rule never took effect. 

The 2020 Tip Rule was published 

with a scheduled effective date of March 

1, 2021.8 However, on February 26, 

2021, the Department delayed the 

effective date of the 2020 Tip Rule until 

April 30, 2021.9 On March 25, 2021, the 

Department proposed to further delay 

the effective date of three portions of the 

2020 Tip Rule, including the portion of 

the rule that would have amended the 

Department’s dual jobs regulation, until 

December 31, 2021.10 On April 29, 

2021, the Department finalized the 

proposed partial delay.11

On October 29, 2021, the Department 

published Tip Regulations Under the 

Fair Labor Standards Act (FLSA); 

Partial Withdrawal, 86 FR 60114 (2021 

Dual Jobs Rule), which withdrew the 

dual jobs provisions of the 2020 Tip 

Rule.12 Separately, the 2021 Dual Jobs 

Rule adopted at 29 CFR 531.56(e)–(f) a 

new dual jobs regulation, which— 

among other changes—set specific 

limits on the amount of time that tipped 

employees who are paid a direct cash 

wage which is less than the Federal 

minimum wage can spend performing 

‘‘work that is not tip-producing, but 

directly supports tip-producing 

work.’’ 13 The 2021 Dual Jobs Rule took 

effect on December 28, 2021. 

On October 29, 2024, the United 

States Court of Appeals for the Fifth 

Circuit issued a decision in Restaurant 

Law Center v. U.S. Department of Labor, 

vacating regulatory text codified at 29 

CFR 531.56(e)–(f) from the Department’s 

2021 Dual Jobs Rule, with the effect of 

reinstating the Department’s original 

dual jobs regulation. 115 F.4th 396 (5th 

Cir. 2024), superseded on reh’g (5th Cir. 

Oct. 29, 2024) (vacating the 2021 Dual 

Jobs Rule ‘‘insofar as it modifies 29 CFR 

531.56 as promulgated in 1967’’). Since 

the Fifth Circuit’s mandate issued on 

October 29, 2024, the operative version 

of 29 CFR 531.56(e) is thus the dual jobs 

regulation that was in place on 

December 27, 2021, prior to the effective 

date of the 2021 Dual Jobs Rule. 

Consistent with the Fifth Circuit’s 

mandate, this rule amends 29 CFR 

531.56 to reinstate the regulatory text as 

it appeared prior to the effective date of 

the 2021 Dual Jobs Rule. This action is 

a technical correction accounting for 

changes in the law which have already 

occurred. 

II. Procedural and Other Matters 

A. Administrative Procedure Act 

Section 553(b)(B) of the 

Administrative Procedure Act (APA) 

provides that an agency is not required 

to publish a notice of proposed 

rulemaking in the Federal Register and 

solicit public comments when the 

agency has good cause to find that doing 

so would be ‘‘impracticable, 

unnecessary, or contrary to the public 

interest.’’ 5 U.S.C. 553(b)(B). The 

Department finds that good cause exists 

to dispense with public notice-andcomment rulemaking procedures in this 

final rule because such procedures are 

unnecessary. The final rule accounts for 

the effects of the Fifth Circuit’s order in 

RLC, which already changed the 

operative regulatory provisions by 

vacating regulatory text codified at 29 

CFR 531.56(e)–(f) from the Department’s 

2021 Dual Jobs Rule, with the effect of 


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101886 Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Rules and Regulations 

14See 5 U.S.C. 601(2); see also id. at 604(a) 

(requiring a FRFA for rules where the agency was 

‘‘required . . . to publish a general notice of 

proposed rulemaking’’). 

reinstating the Department’s earlier 

original dual jobs regulation. The final 

rule makes technical non-substantive 

revisions to correct the CFR to reflect 

the court’s mandate. These amendments 

ensure the accuracy of the CFR, but do 

not alter any regulatory obligations. 

Section 553(d) of the APA provides 

that substantive rules should take effect 

not less than 30 days after the date they 

are published in the Federal Register 

unless ‘‘otherwise provided by the 

agency for good cause found[.]’’ 5 U.S.C. 

553(d)(3). The Department finds that 

good cause also exists to make this final 

rule immediately effective because a 

delayed effective date is unnecessary 

and contrary to the public interest. A 

delayed effective date is unnecessary 

because the Fifth Circuit’s order 

vacating regulatory text codified at 29 

CFR 531.56(e)–(f) from the Department’s 

2021 Dual Jobs Rule has already taken 

effect. Delaying the ministerial act of 

removing the regulatory text of the 

vacated rule and restoring the operative 

regulatory text in the Federal Register 

would also be contrary to the public 

interest in light of the Department’s 

need to expediently implement the 

court’s final judgment, and because it 

could lead to confusion, particularly 

among employers and tipped 

employees, about the FLSA’s 

requirements for the payment of 

minimum wages to tipped employees. 

The Department concludes that a 

delayed effective date is both 

unnecessary and is contrary to the 

public interest, providing good cause to 

bypass a delayed effective date. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act of 1980 

(RFA) as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 

hereafter jointly referred to as the RFA, 

requires that an agency prepare an 

initial regulatory flexibility analysis 

(IRFA) when proposing, and a final 

regulatory flexibility analysis (FRFA) 

when issuing, rules that will have a 

significant economic impact on a 

substantial number of small entities. 

However, the RFA only applies to 

‘‘rule[s] for which the agency publishes 

a general notice of proposed rulemaking 

pursuant to section 553(b) of this title, 

or any other law.’’ 14 Because the 

Department has determined for good 

cause that public notice and comment is 

not required, the Department is not 

publishing a notice of proposed 

rulemaking for this final rule to comply 

with the court’s order. Therefore, the 

RFA and its procedural requirements do 

not apply. 

C. Executive Orders 12866 and 13563 

Under Executive Order 12866 (as 

amended by Executive Order 14094), 

OMB’s Office of Information and 

Regulatory Affairs (OIRA) determines 

whether a regulatory action is 

significant and, therefore, subject to the 

requirements of the Executive order and 

OMB review. As amended by Executive 

Order 14094, section 3(f) of Executive 

Order 12866 defines a ‘‘significant 

regulatory action’’ as a regulatory action 

that is likely to result in a rule that may: 

(1) have an annual effect on the 

economy of $200 million or more; or 

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, territorial, or Tribal 

governments or communities; (2) create 

a serious inconsistency or otherwise 

interfere with an action taken or 

planned by another agency; (3) 

materially alter the budgetary impact of 

entitlements, grants, user fees or loan 

programs or the rights and obligations of 

recipients thereof; or (4) raise legal or 

policy issues for which centralized 

review would meaningfully further the 

President’s priorities or the principles 

set forth in the Executive order. 

Executive Order 13563 directs 

agencies to, among other things, propose 

or adopt a regulation only upon a 

reasoned determination that its benefits 

justify its costs; that it is tailored to 

impose the least burden on society, 

consistent with obtaining the regulatory 

objectives; and that, in choosing among 

alternative regulatory approaches, the 

agency has selected those approaches 

that maximize net benefits. Executive 

Order 13563 recognizes that some costs 

and benefits are difficult to quantify and 

provides that, when appropriate and 

permitted by law, agencies may 

consider and discuss qualitatively 

values that are difficult or impossible to 

quantify, including equity, human 

dignity, fairness, and distributive 

impacts. OIRA has determined that this 

final rule is not significant for the 

purpose of Executive Orders 12866 and 

13563. 

D. Congressional Review Act 

Before a rule can take effect, 5 U.S.C. 

801, the Congressional Review Act 

(CRA) requires agencies to submit the 

rule and a report indicating whether it 

is a major rule to Congress and the 

Comptroller General. This final rule 

does not qualify as a major rule for 

purposes of the CRA and is therefore not 

subject to the timing requirements 

provided in 5 U.S.C. 801(a)(3). 

E. Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

of 1995, 2 U.S.C. 1531–38, requires 

agencies to consider whether a rule will 

result in the expenditure of 

$100,000,000 or more (adjusted 

annually for inflation) in any one year 

by State, local, and Tribal governments, 

in the aggregate, or by the private sector. 

This technical amendment will not 

result in such an expenditure. 

F. Executive Order 13132, Federalism 

The Department has (1) reviewed this 

proposed rule in accordance with 

Executive Order 13132 regarding 

federalism and (2) determined that it 

does not have federalism implications. 

The proposed rule would 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. 

G. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA), 44 U.S.C. 3501 et seq., and its 

attendant regulations, 5 CFR part 1320, 

require the Department to consider the 

agency’s need for its information 

collections, their practical utility, the 

impact of paperwork and other 

information collection burdens imposed 

on the public, and how to minimize 

those burdens. The PRA typically 

requires an agency to provide notice and 

seek public comments on any proposed 

collection of information contained in a 

proposed rule. See 44 U.S.C. 

3506(c)(2)(B); 5 CFR 1320.8. The final 

rule is also not subject to the 

requirements of the PRA because it does 

not contain a collection of information 

as defined in 44 U.S.C. 3502(3). 

List of Subjects 29 CFR Part 531 

Wages. 

PART 531—WAGE PAYMENTS UNDER 

THE FAIR LABOR STANDARDS ACT 

OF 1938 

■ 1. The authority citation for part 531 

continues to read as follows: 

Authority: 29 U.S.C. 203(m) and (t), as 

amended by sec. 3(m), Pub. L. 75–718, 52 

Stat. 1060; sec. 2, Pub. L. 87–30, 75 Stat. 65; 

sec. 101, sec. 602, Pub. L. 89–601, 80 Stat. 

830; sec. 29(B), Pub. L. 93–259, 88 Stat. 55 

sec. 3, sec. 15(c), Pub. L. 95–151, 91 Stat 

1245; sec. 2105(b), Pub. L. 104–188, 110 Stat 

1755; sec. 8102, Pub. L. 110–28, 121 Stat. 

112; and sec. 1201, Div. S., Tit. XII, Pub. L. 

115–141, 132 Stat. 348. 


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Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Rules and Regulations 101887 

■ 2. Amend § 531.56 by revising 

paragraph (e) and removing paragraph 

(f) to read as follows: 

§ 531.56 ‘‘More than $30 a month in tips.’’ 

* * * * * 

(e) Dual jobs. In some situations an 

employee is employed in a dual job, as 

for example, where a maintenance man 

in a hotel also serves as a waiter. In such 

a situation the employee, if he 

customarily and regularly receives at 

least $30 a month in tips for his work 

as a waiter, is a tipped employee only 

with respect to his employment as a 

waiter. He is employed in two 

occupations, and no tip credit can be 

taken for his hours of employment in 

his occupation of maintenance man. 

Such a situation is distinguishable from 

that of a waitress who spends part of her 

time cleaning and setting tables, toasting 

bread, making coffee and occasionally 

washing dishes or glasses. It is likewise 

distinguishable from the counterman 

who also prepares his own short orders 

or who, as part of a group of 

countermen, takes a turn as a short 

order cook for the group. Such related 

duties in an occupation that is a tipped 

occupation need not by themselves be 

directed toward producing tips. 

Signed this 12th day of December, 2024. 

Jessica Looman, 

Administrator, Wage and Hour Division. 

[FR Doc. 2024–29798 Filed 12–16–24; 8:45 am] 

BILLING CODE 4510–27–P 

DEPARTMENT OF THE TREASURY 

Office of the Secretary 

31 CFR Part 1 

RIN 1505–AC32 

Privacy Act Exemptions 

AGENCY: Departmental Offices, 

Department of the Treasury. 

ACTION: Final rule. 

SUMMARY: In accordance with the 

Privacy Act of 1974, as amended 

(Privacy Act), the Department of the 

Treasury, Departmental Offices is 

issuing a final rule, exempting 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 

Executive Order 14105 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: This rule is effective on January 

16, 2025. 

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 

The Department of the Treasury 

(Treasury) published a notice of 

proposed rulemaking (Systems 

Exemption NPRM) in the Federal 

Register, 89 FR 76783 (published 

September 19, 2024), proposing to 

exempt portions of the system of records 

from one or more provisions of the 

Privacy Act. 

As 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 cyberenabled 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 

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 in the Outbound 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 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 Outbound Order. 

On June 21, 2024, Treasury issued a 

notice of proposed rulemaking to seek 

public comment on the proposed rule, 

89 FR 55846 (published July 5, 2024). 

On October 28, 2024, Treasury issued a 

final rule, [89 FR 90398] (published 

November 15, 2024) (the Outbound 

Rule), setting forth the regulations that 

implement the Outbound Order. The 

Outbound Rule requires U.S. persons to 

provide notification of certain 

transactions. This information will 

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 will 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. 

The Outbound Rule also requires 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 Outbound Rule. 

Treasury’s Departmental Offices 

published separately the notice of a new 

system of records, 89 FR 76917 

(published September 19, 2024), for 

information collected in connection 

with the implementation of the 

Outbound Order. 

Public Comments 

Treasury received five comments on 

the Systems Exemption NPRM. Four 

commenters support the proposed 

exemptions because of their importance 

to protect national security. One 

commenter urged Treasury to consider 

the importance of transparency and 

accountability in government, as well as 

the impact exemptions to the Privacy 

Act could have on public trust. The 

commenter expressed concern that the 

Systems Exemption NPRM was too 

broad and noted that exemptions to the 

Privacy Act should be clearly defined 

and limited to situations implicating 

national security. The commenter also 

questioned whether there were any 

checks and balances in place to ensure 

that data is only collected in the interest 

of national security and public safety. 


ddrumheller on DSK120RN23PROD with RULES1