Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Rules and Regulations 19835

States-Canada Free-Trade Agreement

(CFTA), the objectives of which

included the elimination of Customs

duties and other barriers to trade in

goods and services between the two

countries. The provisions of the CFTA

were adopted by the United States with

the enactment of the United StatesCanada Free-Trade Agreement

Implementation Act of 1988, Pub. L.

100–449, 102 Stat. 1851, and the CFTA

went into effect on January 1, 1989.

Regulations setting forth the basic legal

and procedural requirements for

obtaining preferential duty treatment on

imported merchandise under the CFTA

are contained in §§ 10.301 through

10.311 of the Customs Regulations (19

CFR 10.301 through 10.311).

On December 17, 1992, the United

States, Canada and Mexico entered into

the North American Free Trade

Agreement (NAFTA). As in the case of

the CFTA, the stated objectives of the

NAFTA include the elimination of

barriers to trade in goods and services

between the territories of the three

countries. The provisions of the NAFTA

were adopted by the United States with

the enactment of the North American

Free Trade Agreement Implementation

Act, Pub. L. 103–182, 107 Stat. 2057,

and the NAFTA went into effect on

January 1, 1994. Interim regulations

implementing the Customs-related

provisions of the NAFTA were

published in the Federal Register as

T.D. 94–1 on December 30, 1993 (58 FR

69460), and final NAFTA implementing

regulations were published as T.D. 95–

68 on September 6, 1995 (60 FR 46334);

the majority of those NAFTA

regulations are set forth in part 181 of

the Customs Regulations (19 CFR part

181).

In view of the similarity between the

objectives of the CFTA and those of the

NAFTA, the United States and Canada

recognized that, in principle, there

would be no need to continue the

operation of the CFTA upon accession

to, and entry into force of, the NAFTA.

Accordingly, by an exchange of letters

dated December 30, 1993, the

Governments of the United States and

Canada formally agreed, subject to

certain transitional arrangements not

involving preferential duty treatment, to

suspend the operation of the CFTA

upon the entry into force of the NAFTA,

with the suspension to remain in effect

for such time as the two Governments

are Parties to the NAFTA.

Customs believes that the present

CFTA implementing regulations are

unclear as regards their applicability

because they do not reflect the fact that

the operation of the CFTA has been

suspended as a result of the entry into

force of the NAFTA. On the other hand,

Customs notes that those regulations

must be retained because they continue

to have application to Customs

transactions involving merchandise

imported from Canada that was entered

or withdrawn from warehouse for

consumption during the period in

which the CFTA was in effect (that is,

from January 1, 1989, through December

31, 1993).

In order to address the considerations

mentioned above, this document revises

§ 10.301 (Scope) to include references

both to the suspension of the CFTA and

to the circumstances in which the CFTA

regulations continue to have

application.

Inapplicability of Public Notice and

Comment Procedures and Delayed

Effective Date Requirements

Pursuant to the provisions of 5 U.S.C.

553(a), public notice and comment

procedures are inapplicable to this final

rule because it is within the foreign

affairs function of the United States. In

addition, for the above reason and

because this regulatory amendment

involves no substantive change but

rather merely conforms the regulations

to present law, it is determined that

good cause exists under the provisions

of 5 U.S.C. 553(d)(3) for dispensing with

a 30-day delayed effective date.

Executive Order 12866

Because this document involves a

foreign affairs function it is not subject

to the provisions of E.O. 12866.

Regulatory Flexibility Act

Since the amendment is not subject to

the notice and public procedure

requirements of 5 U.S.C. 553, it is not

subject to the provisions of the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.).

Drafting Information

The principal author of this document

was Francis W. Foote, Office of

Regulations and Rulings, U.S. Customs

Service. However, personnel from other

offices participated in its development.

List of Subjects in 19 CFR Part 10

Alterations, Bonds, Customs duties

and inspection, Exports, Imports,

Preference programs, Repairs, Reporting

and recordkeeping requirements, Trade

agreements.

Amendment to the Regulations

For the reasons set out in the

preamble, part 10 of the Customs

Regulations (19 CFR part 10) is

amended as set forth below.

PART 10—ARTICLES CONDITIONALLY

FREE, SUBJECT TO A REDUCED

RATE, ETC.

1. The authority citation for part 10

continues to read in part as follows:

Authority: 19 U.S.C. 66, 1202 (General

Note 20, Harmonized Tariff Schedule of the

United States), 1321, 1481, 1484, 1498, 1508,

1623, 1624, 3314;

* * * * *

2. Section 10.301 is revised to read as

follows:

§ 10.301 Scope and applicability.

The provisions of §§ 10.302 through

10.311 of this part relate to the

procedures for obtaining duty

preferences on imported goods under

the United States-Canada Free-Trade

Agreement (the Agreement) entered into

on January 2, 1988, and the United

States-Canada Free-Trade Agreement

Implementation Act of 1988 (102 Stat.

1851). The United States and Canada

agreed to suspend operation of the

Agreement with effect from January 1,

1994, to coincide with the entry into

force of the North American Free Trade

Agreement (see part 181 of this chapter)

and, accordingly, the provisions of

§§ 10.302 through 10.311 of this part

apply only to goods imported from

Canada that were entered for

consumption, or withdrawn from

warehouse for consumption, during the

period January 1, 1989, through

December 31, 1993. In situations

involving goods subject to bilateral

restrictions or prohibitions, or country

of origin marking, other criteria for

determining origin may be applicable

pursuant to Article 407 of the

Agreement.

Michael H. Lane,

Acting Commissioner of Customs.

Approved: March 29, 1996.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 96–11007 Filed 5–02–96; 8:45 am]

BILLING CODE 4820–02–P

19 CFR Part 103

[T.D. 96–36]

RIN 1515–AB58

Disclosure or Production of Customs

Information Pursuant to Legal Process

AGENCY: Customs Service, Treasury.

ACTION: Final rule.

SUMMARY: This document amends the

Customs Regulations by adopting final

rules that clarify the procedures to be

followed when subpoenas or other

demands of courts and other authorities,
19836 Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Rules and Regulations

except Congress, are issued to compel

the disclosure or production of Customs

information, i.e., documents,

information, or employee testimony, for

use in federal, state, local, and foreign

proceedings. The procedures will be

applicable to current and former

Customs employees and to litigants who

seek to compel Customs employees to

disclose or produce Customs

information. Specifically, the

amendments will place in the Office of

the Chief Counsel the authority to make

determinations concerning the

disclosure of such information to ensure

the more efficient use of Customs

personnel resources in responding to

requests in a timely manner. The

amendments also restructure the general

organizational scheme of Part 103 of the

Customs Regulations to clarify their

application.

EFFECTIVE DATE: June 3, 1996.

FOR FURTHER INFORMATION CONTACT:

Matthew McConkey, Office of the Chief

Counsel (202) 927–6900.

SUPPLEMENTARY INFORMATION:

Background

Customs enforces some 600 laws for

60 agencies while facilitating the flow of

merchandise in international commerce.

In addition to maintaining records

relevant to its enforcement functions,

Customs also maintains information that

has a bearing on other law enforcement

provisions. Many of the records

Customs maintains contain confidential

business information subject to the

Trade Secrets Act, 18 U.S.C. 1905,

which prohibits the unauthorized

disclosure of such information by an

officer or employee of the United States.

Regulations pertaining to Customs

release of information, i.e., documents,

information, or employee testimony,

subpoenaed for use in judicial

proceedings are found at § 103.17 of the

Customs Regulations (19 CFR 103.17).

But while § 103.17 provides some

procedures regarding the disclosure of

information, e.g., the testimony of

employees, and the production of

documents pursuant to a subpoena

duces tecum in cases both where the

agency is and is not a party to a legal

proceeding, it does not adequately

describe the procedures for determining

whether and how the information

should be released in response to such

demands.

On September 6, 1994, Customs

published a document in the Federal

Register (59 FR 46007) proposing to

amend the Customs Regulations to

clarify the procedures to be followed

when subpoenas or other demands of

courts and other authorities, except

Congress, are issued to compel the

disclosure or production of Customs

information for use in various

proceedings. The procedures would be

applicable to current and former

Customs employees and to litigants who

seek to compel Customs employees to

disclose or produce Customs

information. Specifically, the proposed

amendments sought to place in the

Office of the Chief Counsel the

responsibility to make determinations

concerning the disclosure of such

information to ensure the more efficient

use of Customs personnel resources in

responding to requests in a timely

manner. The amendments also proposed

to restructure the general organizational

scheme of part 103 of the Customs

Regulations to clarify their application.

The notice proposed to revise two

sections (§§ 103.0 and 103.17),

renumber five sections (§§ 103.14

through 103.18), and create six new

sections (§§ 103.22 through 103.27) of

the Customs Regulations. The notice

also solicited comments concerning

these changes.

The comments received and Customs

responses to them are set forth below.

Discussion of Comments

Two comments were received—one

from a Bar Association, the other from

a group of undergraduate business

students—that raised three areas of

concern: (1) Centralizing decisions over

the disclosure process; (2) agency

assertion of privilege and the role of

discovery; and (3) the omission of in

camera disclosure provisions. We

address these concerns in turn.

Centralizing Decisions Over the

Disclosure Process

Comment: Both commenters protested

the concept of centralized decisionmaking concerning the disclosure

process as likely to increase the

inefficiency of a bureaucracy given that

centralization requires the central

decision-maker to find the information

demanded, analyze it, etc. These

commenters argue that the offices

having the information demanded are in

closer contact with the information and

should have the authority to decide

whether to comply with demand.

Customs Response: As a general

proposition, Customs believes that it is

appropriate to fix the responsibility for

legal review of subpoena issues within

one office. It was, perhaps, misleading

to state in the proposed rule that the

transferring of responsibility for legal

review of subpoena issues to the Office

of Chief Counsel was a centralizing

move. Decisions concerning the

disclosure or production of Customs

information pursuant to legal process

are now handled by the Disclosure Law

Branch of the Office of Regulations and

Rulings, which has offices only at

Customs Headquarters in Washington,

D.C. By placing the decision-making

process regarding subpoena demands

for information in the Office of the Chief

Counsel, the amendments to the

regulations actually serve to

decentralize the processing of such

information demands, as the Office of

the Chief Counsel has a field presence

throughout the United States. Thus, the

processing of subpoena demands should

be handled more efficiently than when

all such demands were handled by the

one office in Washington, D.C.

Agency Assertion of Privilege and the

Role of Discovery

Comment: Stating that the proposed

regulations are not as even-handed as

the present regulations in allowing for

privilege claims, a commenter proposed

adding language to § 103.21(e), which

concerns disclosure of information to

government law enforcement or

regulatory agencies, and § 103.26, which

concerns procedures in the event of a

demand for Customs information in a

state or local criminal proceeding, to

reflect disclosure limitations, i.e., scope

of privileges, contained in § 103.12,

which concerns Freedom of Information

Act (FOIA) exemptions from disclosure.

The commenter states that these two

regulatory provisions should be more

explicit as to what information can be

turned over and on whose authority and

suggests that language be added to more

appropriately apprise Customs field

personnel of their duty to refer certain

matters to Customs Headquarters.

Customs Response: Customs does not

agree with the commenter. Sections

103.21(e) and 103.26 are located in

subpart B of the Customs Regulations,

which concerns disclosure of Customs

information pursuant to legal process

for use in legal proceedings; however,

the disclosure limitations of concern

(§ 103.12) are located in subpart A of the

regulations, which concerns disclosure

of Customs information pursuant to

various disclosure laws. This means that

the exemptions available under

provisions in subpart A are not available

under provisions in subpart B. On a

separate note, the Office of the Chief

Counsel does not process information

requests under subpart A, only those

under subpart B. Accordingly, no

change to the proposed regulations is

made based on this comment.

Comment: A commenter stated that

the provisions of § 103.21(f) are

inadequate to protect the orderly

functioning of the discovery process in
Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Rules and Regulations 19837

that they allow the Government to

frustrate discovery requests solely by

asserting that regulation as the reason

for objection to discovery requests,

compelling parties to resort to judicial

intervention to resolve matters of

asserted privilege. The commenter

stresses the point that if the Government

wishes to assert a non-disclosure

privilege in any action before the Court

of International Trade (CIT) (particularly

in discovery), then such privilege

should be asserted by its attorneys with

specific references to the discovery

request and which privilege is claimed,

i.e., executive, statutory, or evidentiary.

Accordingly, to make it clear that nongovernment attorneys should not have

to make special discovery requests of

the Chief Counsel’s office to carry on

discovery against the United States nor

have to resort to the Court to enforce

discovery demands, the commenter

suggests that language be added to

§ 103.21(f) indicating this.

Customs Response: Customs believes

that § 103.21(f) need not be changed.

Section 103.21(f) is not a substantive

provision, but rather a statement of

purpose, that is not subject to the

general prohibition provisions

contained at § 103.22, which only

pertain to proceedings in which

Customs is not a party (emphasis

added).

In the notice of proposed rulemaking,

it was stated, regarding paragraph (f) of

§ 103.21, that this paragraph serves to

limit the scope of the proposed

regulations by providing that it is not

intended to impede or restrict the

appropriate disclosure of any

information to certain federal attorneys

and judges in connection with Customs

cases—i.e., when the Customs Service is

a party—referred by the Department of

the Treasury to the Department of

Justice for prosecution or defense. The

comment presumes that the regulatory

provision proposed by Customs will

control when the agency is a party

before an Article III court, which cannot

be; the Court’s rules of procedure will,

of course, control such a proceeding.

Accordingly, no change to this

regulatory provision is made based on

this comment; however, the heading of

§ 103.22 is revised to reflect the fact that

the procedures thereunder only pertain

when the Customs Service is not a party

to the litigation or proceeding.

Omission of In Camera Disclosure

Provisions

Comment: A commenter stated that

the provisions of current § 103.17(d),

which provide for in camera review of

documents, are not extended to certain

other criminal actions. While the

commenter believes that proposed

§ 103.21(f) confers the right of in camera

inspection on judges of the CIT, he

states that such an extension is not

evident in the provisions of proposed

§ 103.26, which pertains to criminal

proceedings in other federal courts.

Accordingly, the commenter suggests

that Customs amend its regulations to

allow for turnover of its information to

state and local law enforcement officers.

Customs Response: Although the

comment seems to present two different

issues in camera disclosure to judges

and disclosure to law enforcement

personnel), Customs does not agree that

in camera inspection of records and

documents in state or local criminal

proceedings is not present in § 103.26.

Regarding in camera disclosure of

Customs documents to any court (State

or Federal, whether civil or criminal), it

is within the inherent power of a court

of competent jurisdiction to order in

camera disclosure of Customs

documents. Regarding disclosure to

state and local law enforcement officers,

as provided at § 103.21(e), nothing in

this subpart is intended to impede the

appropriate disclosure of information,

in keeping with the Privacy Act (5

U.S.C. 552a) and the Trade Secrets Act

(18 U.S.C. 1905), by Customs to federal,

state, local, and foreign law enforcement

or regulatory agencies. Nevertheless,

because of the concern expressed over

Customs perceived ability to withhold

records from a court of competent

jurisdiction, Customs has no hesitation

in adding the former in camera

provisions of § 103.17(d) as new

§ 103.21(i). Accordingly, a provision is

added to the final regulations providing

that nothing in new subpart B

authorizes Customs personnel to

withhold records from a federal court,

whether civil or criminal, pursuant to

its order for such records appropriately

made, for purposes of in camera

inspection of the records to determine

the propriety of claimed exemption(s)

from disclosure.

Other Matters

Three other procedural changes to the

proposed regulations are made and a

referencing (typographical) error is

corrected at this time. The first

procedural change, a change to

§ 103.22(d), increases the processing

time from 5 days to 10 days. This

change is made because Customs wishes

to ensure that demands for Customs

information can be met by available

staff. The second and third procedural

changes, to § 103.23(b), add two

subparagraphs to provide for two

additional circumstances where

disclosure will not be made: failure to

make proper service upon the United

States (§ 103.23(b)(10)), and failure to

comply with federal, state, or local rules

of discovery (§ 103.23(b)(11)). Although

these grounds for not authorizing

disclosure are readily contained in both

civil and criminal rules of procedure

throughout the United States, the

presence of either of these facts at the

agency level will help the Office of the

Chief Counsel to summarily respond to

such requests. The typographical error

concerns a reference in § 103.25 to

§ 103.22; it should read § 103.24 to

reflect the statement in the BACKGROUND

portion of the notice that the new

§ 103.25 concerns ‘‘the preceding

section’’ i.e., § 103.24.

Unrelated to subpoenas, this

document also amends § 103.6,

concerning the initial handling of

requests for information pursuant to the

FOIA, to reflect that the initial

determination regarding such requests

for information maintained in the field

shall be made by the appropriate

director of a service port, or in the case

of records of the Office of Investigations,

the appropriate special agent in charge.

The regulations currently do not

distinguish between records of the

Office of Investigations and other

records regarding who shall make the

initial determination concerning their

release.

Conclusion

Based on the comments received and

further consideration by Customs,

Customs has decided to finalize the

amendments proposed with the

following changes: In § 103.21, a new

paragraph (i) is added to continue

authorizing in camera inspections by

any court; in § 103.22(d), the processing

time of requests is increased from five

to ten days; and in § 103.23(b),

subparagraphs (10) and (11) are added

providing additional circumstances

where disclosure will not be made:

where there is a failure to make proper

service upon the United States, and

where there is a failure to comply with

federal, state, or local rules of discovery.

Further, the heading of § 103.22 is

revised to make it clear that the

procedures thereunder only pertain

when the Customs Service is not a party

to the litigation or proceeding and the

referencing (typographical) error in

§ 103.25 to § 103.22 is corrected to

reference § 103.24. Also, references to

certain Customs field organization

designations, i.e., district directors and

regional commissioners, are revised to

reference port directors to account for

Customs reorganization. Lastly, certain

editorial changes are made to make clear

the relationship between (1) the Office
19838 Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Rules and Regulations

of the Chief Counsel, (2) its field

counsel, (3) Customs employees served

with demands, and (4) the official in

charge of the originating component.

Inapplicability of the Regulatory

Flexibility Act and Executive Order

12866

Pursuant to the provisions of the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.) and based upon the information

set forth above, it is certified that the

regulations will not have a significant

impact on a substantial number of small

entities. Accordingly, these regulations

are not subject to the regulatory analysis

or other requirements of 5 U.S.C. 603

and 604. Further, this document does

not meet the criteria for a ‘‘significant

regulatory action’’ as specified in E.O.

12866.

List of Subjects in 19 CFR Part 103

Administrative practice and

procedure, Confidential business

information, Courts, Freedom of

Information, Law enforcement, Privacy,

Reporting and recordkeeping

requirements, Subpoenas.

Amendment to the Regulations

For the reasons set forth above, part

103, Customs Regulations (19 CFR part

103), is amended as set forth below:

PART 103—AVAILABILITY OF

INFORMATION

1. The table of contents of part 103 is

revised to read as set forth below to

reflect the amendments that follow:

Sec.

103.0 Scope.

Subpart A—Production of documents/

disclosure of information pursuant to the

FOIA

103.1 Public reading rooms.

103.2 Information available to the public.

103.3 Publication of information in the

Federal Register.

103.4 Public inspection and copying.

103.5 Specific requests for records.

103.6 Grant or denial of initial request.

103.7 Administrative appeal of initial

determination.

103.8 Time extensions.

103.9 Judicial review.

103.10 Fees for services.

103.11 Specific Customs Service records

subject to disclosure.

103.12 Exemptions.

103.13 Segregability of records.

Subpart B—Production or disclosure in

Federal, State, Local, and Foreign

proceedings

103.21 Purpose and definitions.

103.22 Procedure in the event of a demand

for Customs information in any federal,

state, or local civil proceeding or

administrative action.

103.23 Factors in determining whether to

disclose information pursuant to a

demand.

103.24 Procedure in the event a decision

concerning a demand is not made prior

to the time a response to the demand is

required.

103.25 Procedure in the event of an adverse

ruling.

103.26 Procedure in the event of a demand

for Customs information in a state or

local criminal proceeding.

103.27 Procedure in the event of a demand

for Customs information in a foreign

proceeding.

Subpart C—Other Information Subject to

Restricted Access

103.31 Information on vessel manifests and

summary statistical reports.

103.32 Information concerning fines,

penalties, and forfeitures cases.

103.33 Release of information to foreign

agencies.

103.34 Sanctions for improper actions by

Customs officers or employees.

§§ 103.31, 103.33, 103.34 [Amended]

2. The general authority citation for

part 103 is revised and specific

authority citations for §§ 103.31, 103.33,

and 103.34 are added to read as follows:

Authority: 5 U.S.C. 301, 552, 552a; 19

U.S.C. 66, 1624; 31 U.S.C. 9701. Section

103.31 also issued under 19 U.S.C. 1431;

Section 103.33 also issued under 19 U.S.C.

1628; Section 103.34 also issued under 18

U.S.C. 1905.

3. Section 103.0 is revised to read as

follows:

§ 103.0 Scope.

This part governs the production/

disclosure of agency-maintained

documents/information requested

pursuant to various disclosure laws

and/or legal processes. Thus, the extent

of disclosure of requested information

may be dependent on whether the

request is pursuant to the provisions of

the Freedom of Information Act (FOIA),

as amended (5 U.S.C. 552), the Privacy

Act of 1974, as amended (5 U.S.C. 552a),

and/or under other statutory or

regulatory authorities, as required by

administrative and/or legal processes.

The regulations for this part contain a

discussion of applicable fees for the

search, duplication, review, and other

tasks associated with processing

information requests pursuant to the

FOIA, and also provide for the appeal of

agency decisions and sanctions for the

improper withholding and/or the

untimely release of requested

information. As information obtained by

Customs is derived from a myriad of

sources, persons seeking information

should consult with a disclosure law

officer, the director of a service port, or

the local public information officer

before invoking the formal procedures

set forth in this part. These regulations

supplement the regulations of the

Department of the Treasury regarding

public access to records, which are

found at 31 CFR part 1, and, in the event

of any inconsistency between these

regulations and those of the Department

of the Treasury, the latter shall prevail.

For purposes of this part, the Office of

the Chief Counsel is considered a part

of the United States Customs Service.

§§ 103.1–103.13 [Amended]

4. Sections 103.1 through 103.13 are

designated as subpart A and a new

heading for subpart A is added to read

as follows:

Subpart A—Production of documents/

disclosure of information under the

FOIA

5. In § 103.6, paragraph (a)(1) is

revised to read as follows:

§ 103.6 Grant or denial of initial request.

(a) Officers designated to make initial

determinations—(1) Service ports. The

appropriate director of a service port, or

in the case of records of the Office of

Investigations, the appropriate special

agent in charge (SAC), shall make any

initial determination of a request for a

record which is maintained,

respectively, at that service port or

under the SAC’s jurisdiction.

* * * * *

§§ 103.14, 103.15, 103.16, 103.18

[Redesignated as §§ 103.31, 103.34, 103.32,

103.33]

6. Sections 103.14, 103.15, 103.16,

and 103.18 are redesignated as

§§ 103.31, 103.34, 103.32, and 103.33,

respectively, and designated as subpart

C and a new heading for subpart C is

added to read as follows:

Subpart C—Other Information Subject

to Restricted Access

§ 103.17 [Removed]

7. Section 103.17 is removed.

8. A new subpart B, consisting of

§§ 103.21 through 103.27, is added to

read as follows:

Subpart B—Production or disclosure

in Federal, State, Local, and Foreign

proceedings

§ 103.21 Purpose and definitions.

(a) Purpose. (1) This subpart sets forth

procedures to be followed with respect

to the production or disclosure of any

documents contained in Customs files,

any information relating to material

contained in Customs files, any

testimony by a Customs employee, or

any information acquired by any person

as part of that person’s performance of
Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Rules and Regulations 19839

official duties as a Customs employee or

because of that person’s official status,

hereinafter collectively referred to as

‘‘information’’, in all federal, state, local,

and foreign proceedings when a

subpoena, notice of deposition (either

upon oral examination or written

interrogatory), order, or demand,

hereinafter collectively referred to as a

‘‘demand’’, of a court, administrative

agency, or other authority is issued for

such information.

(2) This subpart does not cover those

situations where the United States is a

party to the action. In situations where

the United States is a party to the action,

Customs employees are instructed to

follow internal Customs policies and

procedures.

(b) Customs employee. For purposes

of this subpart, the term ‘‘Customs

employee’’ includes all present and

former officers and employees of the

United States Customs Service.

(c) Customs documents. For purposes

of this subpart, the term ‘‘Customs

documents’’ includes any document

(including copies thereof), no matter

what media, produced by, obtained by,

furnished to, or coming to the

knowledge of, any Customs employee

while acting in his/her official capacity,

or because of his/her official status, with

respect to the administration or

enforcement of laws administered or

enforced by the Customs Service.

(d) Originating component. For

purposes of this subpart, the term

‘‘originating component’’ references the

Customs official, or the official’s

designee, in charge of the office

responsible for the collection, assembly,

or other preparation of the information

demanded or that, at the time the person

whose testimony is demanded acquired

the information in question, employs or

employed the person whose testimony

is demanded.

(e) Disclosure to government law

enforcement or regulatory agencies.

Nothing in this subpart is intended to

impede the appropriate disclosure of

information by Customs to federal, state,

local, and foreign law enforcement or

regulatory agencies, in accordance with

the confidentiality requirements of the

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

Secrets Act (18 U.S.C. 1905), and other

applicable statutes.

(f) Disclosure to federal attorneys and

the Court of International Trade.

Nothing in this subpart is intended to

restrict the disclosure of Customs

information requested by the Court of

International Trade, U.S. Attorneys, or

attorneys of the Department of Justice,

for use in cases which arise under the

laws administered or enforced by, or

concerning, the Customs Service and

which are referred by the Department of

the Treasury to the Department of

Justice for prosecution or defense.

(g) Disclosure of non-Customs

information. Nothing in the subpart is

intended to impede the appropriate

disclosure of non-Customs information

by Customs employees in any

proceeding in which they are a party or

witness solely in their personal

capacities.

(h) Failure of Customs employee to

follow procedures. The failure of any

Customs employee to follow the

procedures specified in this subpart

neither creates nor confers any rights,

privileges, or benefits on any person or

party.

(i) In camera inspection of records.

Nothing in this subpart authorizes

Customs personnel to withhold records

from a federal court, whether civil or

criminal, pursuant to its order for such

records appropriately made, for

purposes of in camera inspection of the

records to determine the propriety of

claimed exemption(s) from disclosure.

§ 103.22 Procedure in the event of a

demand for Customs information in any

federal, state, or local civil proceeding or

administrative action.

(a) General prohibition against

disclosure. In any federal, state, or local

civil proceeding or administrative

action in which the Customs Service is

not a party, no Customs employee shall,

in response to a demand for Customs

information, furnish Customs

documents or testimony as to any

material contained in Customs files, any

information relating to or based upon

material contained in Customs files, or

any information or material acquired as

part of the performance of that person’s

official duties (or because of that

person’s official status) without the

prior written approval of the Chief

Counsel, as described in paragraph (b)

of this section.

(b) Employee notification to Counsel.

Whenever a demand for information is

made upon a Customs employee, that

employee shall immediately prepare a

report that specifically describes the

testimony or documents sought and

notify the Assistant Chief Counsel or

Associate Chief Counsel for the area

where the employee is located. If the

employee is located at Headquarters or

outside of the United States, the

employee shall immediately notify the

Chief Counsel. The Customs employee

shall then await instructions from the

Chief Counsel concerning the response

to the demand.

(c) Requesting party’s initial burden.

A party seeking Customs information

shall serve on the appropriate Customs

employee the demand, a copy of the

Summons and Complaint, and provide

an affidavit, or, if that is not feasible, a

statement that sets forth a summary of

the documents or testimony sought and

its relevance to the proceeding. Any

disclosure authorization for documents

or testimony by a Customs employee

shall be limited to the scope of the

demand as summarized in such affidavit

or statement. The Chief Counsel may,

upon request and for good cause shown,

waive the requirements of this

paragraph.

(d) Requesting party’s notification

requirement. The demand for Customs

information, pursuant to the provisions

of paragraph (c) of this section, shall be

served at least ten (10) working days

prior to the scheduled date of the

production of the documents or the

taking of testimony.

(e) Counsel notification to originating

component. Upon receipt of a proper

demand for Customs information, one

which complies with the provisions of

paragraph (c) of this section, if the Chief

Counsel believes that it will comply

with any part of the demand, it will

immediately advise the originating

component.

(f) Conditions for authorization of

disclosure. The Chief Counsel, subject to

the provisions of paragraph (h) of this

section, may authorize the production of

Customs documents or the appearance

and testimony of a Customs employee if:

(1) Production of the demanded

documents or testimony, in the

judgment of the Chief Counsel, are

appropriate under the factors specified

in § 103.23(a) of this subpart; and

(2) None of the factors specified in

§ 103.23(b) of this subpart exist with

respect to the demanded documents or

testimony.

(g) Limitations on the scope of

authorized disclosure. (1) The Chief

Counsel shall authorize the disclosure

of Customs information by a Customs

employee without further authorization

from Customs officials whenever

possible, provided that:

(i) If necessary, Counsel has consulted

with the originating component

regarding disclosure of the information

demanded;

(ii) There is no objection from the

originating component to the disclosure

of the information demanded; and

(iii) Counsel has sought to limit the

demand for information to that which

would be consistent with the factors

specified in § 103.23 of this part.

(2) In the case of an objection by the

originating component, the Chief

Counsel shall make the disclosure

determination.
19840 Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Rules and Regulations

(h) Disclosure of commercial

information. In the case of a demand for

commercial information or commercial

documents concerning importations or

exportations, the Chief Counsel shall

obtain the authorization of the Assistant

Commissioner (Field Operations) or his/

her designee prior to the Chief Counsel

authorizing the production/disclosure of

such documents/information.

§ 103.23 Factors in determining whether to

disclose information pursuant to a demand.

(a) General considerations. In

authorizing disclosures pursuant to a

proper demand for Customs

information, one which complies with

the provisions of § 103.22(c), the Chief

Counsel should consider the following

factors:

(1) Whether the disclosure would be

appropriate under the relevant

substantive law concerning privilege;

(2) Whether the disclosure would be

appropriate under the rules of

procedure governing the case or matter

in which the demand arose; and,

(3) Whether the requesting party has

demonstrated that the information

requested is:

(i) Relevant and material to the action

pending, based on copies of the

summons and complaint that are

required to be attached to the subpoena

duces tecum or other demand;

(ii) Genuinely necessary to the

proceeding, i.e., a showing of

substantial need has been made;

(iii) Unavailable from other sources;

and,

(iv) Reasonable in its scope, i.e., the

documents, information, or testimony

sought are described with particularity.

(4) Whether consultation with the

originating component requires that the

Chief Counsel make a separate

determination as to the disclosure of the

information requested.

(b) Circumstances where disclosure

will not be made. Among the demands

in response to which disclosure will not

be authorized by the Chief Counsel are

those demands with respect to which

any of the following factors exist:

(1) Disclosure would violate a treaty,

statute (such as the Privacy Act, 5 U.S.C.

552a, the Trade Secrets Act, 18 U.S.C.

1905, or the income tax laws, 26 U.S.C.

6103 and 7213), or a rule of procedure,

such as the grand jury secrecy rule,

Fed.R.Crim.Proc. rule 6(e) (18

U.S.C.App.);

(2) Disclosure would violate a specific

regulation;

(3) Disclosure would reveal classified

or confidential information;

(4) Disclosure would reveal a

confidential source or informant;

(5) Disclosure would reveal

investigatory records compiled for law

enforcement purposes, interfere with

enforcement proceedings, or disclose

investigative techniques and

procedures;

(6) Disclosure would improperly

reveal confidential commercial

information without the owner’s

consent (e.g., entry information);

(7) Disclosure relates to documents

which were produced by another agency

or entity;

(8) Disclosure would unduly interfere

with the orderly conduct of Customs

business;

(9) Customs has no interest, records,

or other official information regarding

the matter in which disclosure is

sought;

(10) There is a failure to make proper

service upon the United States; or

(11) There is a failure to comply with

federal, state, or local rules of discovery.

§ 103.24 Procedure in the event a decision

concerning a demand is not made prior to

the time a response to the demand is

required.

If response to a demand is required

before the instructions from the Chief

Counsel are received, the U.S. Attorney,

his/her assistant, or other appropriate

legal representative shall be requested to

appear with the Customs employee

upon whom the demand has been made.

The U.S. Attorney, his/her assistant, or

other appropriate legal representative

shall furnish the court or other authority

with a copy of the regulations contained

in this subpart, inform the court or other

authority that the demand has been or

is being, as the case may be, referred for

the prompt consideration of the Chief

Counsel, and shall respectfully request

the court or authority to stay the

demand pending receipt of the

requested instructions.

§ 103.25 Procedure in the event of an

adverse ruling.

If the court or other authority declines

to stay the demand in response to a

request made in accordance with

§ 103.24 pending receipt of instructions,

or rules that the demand must be

complied with irrespective of

instructions rendered in accordance

with §§ 103.22, 103.23, 103.26, or

103.27 of this subpart not to produce the

documents or disclose the information

sought, the Customs employee upon

whom the demand has been made shall,

pursuant to this subpart, respectfully

decline to comply with the demand.

See, United States ex rel. Touhy v.

Ragen, 340 U.S. 462 (1951).

§ 103.26 Procedure in the event of a

demand for Customs information in a state

or local criminal proceeding.

Port directors, special agents in

charge, and chiefs of field laboratories

may, in the interest of federal, state, and

local law enforcement, upon receipt of

demands of state or local authorities,

and at the expense of the State,

authorize employees under their

supervision to attend trials and

administrative hearings on behalf of the

government in any state or local

criminal case, to produce records, and

to testify as to facts coming to their

knowledge in their official capacities.

However, in cases where a defendant in

a state or local criminal case demands

testimony or the production of Customs

documents or information,

authorization from the Chief Counsel is

required as under § 103.22 of this

subpart. No disclosure of information

under this section shall be made if any

of the factors listed in § 103.23(b) of this

subpart are present.

§ 103.27 Procedure in the event of a

demand for Customs information in a

foreign proceeding.

(a) Required prior approval for

disclosure. In any foreign proceeding in

which the Customs Service is not a

party, no Customs employee shall, in

response to a demand, furnish Customs

documents or testimony as to any

material contained in Customs files, any

information relating to or based upon

material contained in Customs files, or

any information or material acquired as

part of the performance of that person’s

official duties (or because of that

person’s official status) without the

prior approval of the Chief Counsel, as

described in paragraph (b) of this

section.

(b) Employee notification to Counsel.

Whenever a demand in a foreign

proceeding is made upon a Customs

employee concerning pre-clearance

activities within the territory of the

foreign country, that employee shall

immediately notify the appropriate

Associate Chief Counsel responsible for

the pre-clearance location. All other

demands in a foreign proceeding shall

be reported by Customs employees to

the Chief Counsel. The Customs

employee shall then await instructions

from the Chief Counsel concerning the

response to the demand.

(c) Counsel notification to originating

component. Upon receipt of a proper

demand for Customs information, one

which complies with the provisions of

§ 103.22(c), if the Chief Counsel believes

that it will comply with any part of the

demand, it will immediately advise the

originating component.
Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Rules and Regulations 19841

(d) Conditions for authorization of

disclosure. The Chief Counsel, subject to

the terms of paragraph (e) of this

section, may authorize the disclosure of

Customs documents or the appearance

and testimony of a Customs employee if:

(1) Production of the demanded

documents or testimony, in the

judgment of the Chief Counsel, are

appropriate under the factors specified

in § 103.23(a) of this subpart; and

(2) None of the factors specified in

§ 103.23(b) of this subpart exist with

respect to the demanded documents or

testimony.

(e) Limitations on the scope of

authorized disclosure.

(1) The Chief Counsel shall authorize

the disclosure of Customs information

by a Customs employee without further

authorization from Customs officials

whenever possible, provided that:

(i) If necessary, Counsel has consulted

with the originating component

regarding disclosure of the information

demanded;

(ii) There is no objection from the

originating component to the disclosure

of the information demanded; and

(iii) Counsel has sought to limit the

demand for information to that which

would be consistent with the factors

specified in § 103.23 of this part.

(2) In the case of an objection by the

originating component, the Chief

Counsel shall make the disclosure

determination.

William F. Riley,

Acting Commissioner of Customs.

Approved: December 14, 1995.

Dennis M. O’Connell,

Acting Deputy Assistant Secretary of the

Treasury.

[FR Doc. 96–11006 Filed 5–2–96; 8:45 am]

BILLING CODE 4820–02–P

DEPARTMENT OF STATE

Bureau of Political-Military Affairs

22 CFR Part 126

[Public Notice 2346]

Amendment to the List of Proscribed

Destinations

AGENCY: Department of State.

ACTION: Final rule.

SUMMARY: The Department of State is

amending the International Traffic in

Arms Regulations (ITAR) to reflect that

it is no longer the policy of the United

States to deny licenses, other approvals,

exports and imports of defense articles

and defense services, destined for or

originating in the Russian Federation.

All requests for approval involving

items covered by the U.S. Munitions

List will be reviewed on a case-by-case

basis.

EFFECTIVE DATE: April 3, 1996.

FOR FURTHER INFORMATION CONTACT:

Gordon J. Stirling, Office of Arms Export

and Export Control Policy, Bureau of

Political-Military Affairs, Department of

State (202/647–0397).

SUPPLEMENTARY INFORMATION: In

connection with the President’s policy

that U.S. laws and regulations be

updated to reflect the end of the Cold

War, the Department of State is

amending the ITAR to reflect that it is

no longer the policy of the United

States, pursuant to § 126.1, to deny

licenses, other approvals, exports and

imports of defense articles and defense

services, destined for or originating in

the Russian Federation. Requests for

licenses or other approvals for Russia

involving items covered by the U.S.

Munitions List (22 CFR part 121) will no

longer be presumed to be disapproved.

This amendment to the ITAR involves

a foreign affairs function of the United

States and thus is excluded from the

major rule procedures of Executive

Order 12291 (46 FR 13193) and the

procedures of 5 U.S.C. 553 and 554.

This final rule does not contain a new

or amended information requirement

subject to the Paperwork Reduction Act

(44 U.S.C. 3501 et seq.).

In accordance with 5 U.S.C. 808, as

added by the Small Business Regulatory

Enforcement Fairness Act of 1996 (the

‘‘Act’’), the Department of State has

found for foreign policy reasons that

notice and public procedure under

section 251 of the Act is impracticable

and contrary to the public interest.

List of Subjects in 22 CFR Part 126

Arms and munitions, Exports.

Accordingly, under the authority of

Section 38 of the Arms Export Control

Act (22 U.S.C. 2778) and Executive

Order 11958, as amended, 22 CFR

subchapter M is amended as follows:

1. The authority citation for part 126

continues to read as follows:

Authority: Secs. 2, 38, 40, 42, and 71, Arms

Export Control Act, Pub. L. 90–629, 90 Stat.

744 (22 U.S.C. 2752, 2778, 2780, 2791, and

2797); E.O. 11958, 41 FR 4311; E.O. 11322,

32 FR 119; 22 U.S.C. 2658; 22 U.S.C. 287c;

E.O. 12918, 59 FR 28206.

§ 126.1 [Amended]

2. Section 126.1 is amended by

removing ‘‘Russia,’’ from paragraph (a).

Dated: April 23, 1996.

Lynn E. Davis,

Under Secretary of State for Arms Control

and International Security Affairs.

[FR Doc. 96–11090 Filed 5–2–96; 8:45 am]

BILLING CODE 4710–25–M

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 165

[COTP Los Angeles-Long Beach, CA; 96–

007]

RIN 2115–AA97

Safety Zone; Dana Point, CA

AGENCY: Coast Guard, DOT.

ACTION: Temporary final rule.

SUMMARY: The Coast Guard is

establishing a temporary safety zone in

the navigable waters of the United

States offshore from Capistrano Beach to

San Mateo Point, California in the

vicinity of the 3rd Annual Dana Point

Challenge (offshore powerboat race) on

May 19, 1996. The safety zone

boundaries are as follows: commencing

at latitude 33°26.0′ N, 117°42.0′ W;

thence to 33°27.0′ N, 117°41.3′ W;

thence 33°24.0′ N, 117°37.0′ W; thence

to 33°23.2′ N, 117°38.0′ W; thence

returning to the point of beginning. This

safety zone is necessary to ensure the

safety of contestant and spectator

vessels involved with the 3rd Annual

Dana Point Challenge. Entry into this

zone is prohibited unless authorized by

the Captain of the Port.

EFFECTIVE DATE: This safety zone is in

effect on May 19, 1996, from 10 a.m.

PDT until 4 p.m. PDT.

FOR FURTHER INFORMATION CONTACT:

Lieutenant Mark T. Cunningham, Chief,

Port Safety and Security Division,

Marine Safety Office Los Angeles-Long

Beach, 165 N. Pico Avenue, Long Beach,

CA 90802; (310) 980–4454.

SUPPLEMENTARY INFORMATION: In

accordance with 5 U.S.C. 553, a notice

of proposed rule making was not

published for this regulation and good

cause exists for making it effective in

less than 30 days after Federal Register

publication. Publication of a notice of

proposed rulemaking and delay of its

effective date would be contrary to the

public interest since the details of the

safety zone boundaries and marine

event permit were not finalized until a

date fewer than 30 days prior to the

event date.