Privacy Act of 1974; Exemption
| Published date | 30 December 2020 |
| Citation | 85 FR 86511 |
| Record Number | 2020-26612 |
| Section | Rules and Regulations |
| Court | Treasury Department |
86511
Federal Register / Vol. 85, No. 250 / Wednesday, December 30, 2020 / Rules and Regulations
and that is not materially modified after
that date. For purposes of this paragraph
(h)(3), written binding contract and
material modification have the same
meanings as provided in paragraphs
(g)(1) and (2) of this section.
(D) Corporations that become publicly
held. The rule in paragraph (d) of this
section (providing that the deduction
limitation of paragraph (b) of this
section applies to a deduction for any
compensation that is otherwise
deductible for the taxable year ending
on or after the date that a privately held
corporation becomes a publicly held
corporation) applies to corporations that
become publicly held after December
20, 2019. A privately held corporation
that becomes a publicly held
corporation on or before December 20,
2019, may rely on the transition rules
provided in § 1.162–27(f)(1) until the
earliest of the events provided in
§ 1.162–27(f)(2). A subsidiary that is a
member of an affiliated group (as
defined in § 1.162–27(c)(1)(ii)) may rely
on transition relief provided in § 1.162–
27(f)(4) if it becomes a separate publicly
held corporation (whether in a spin-off
transaction or otherwise) on or before
December 20, 2019.
(E) Transition rules. Except for the
transition rules in paragraphs (g)(1)(v)
through (vii) of this section, the
transition rules in paragraphs (g)(1) and
(2) of this section (providing that this
section does not apply to compensation
payable under a written binding
contract which was in effect on
November 2, 2017, and which is not
modified in any material respect on or
after such date) apply to taxable years
ending on or after September 10, 2018.
■Par. 4. Section 1.338–1 is amended by
revising paragraph (b)(2)(i) to read as
follows:
§ 1.338–1 General principles; status of old
target and new target.
* * * * *
(b) * * *
(2) * * *
(i) The rules applicable to employee
benefit plans (including those plans
described in sections 79, 104, 105, 106,
125, 127, 129, 132, 137, and 220),
qualified pension, profit-sharing, stock
bonus and annuity plans (sections
401(a) and 403(a)), simplified employee
pensions (section 408(k)), tax qualified
stock option plans (sections 422 and
423), welfare benefit funds (sections
419, 419A, 512(a)(3), and 4976),
voluntary employee benefit associations
(section 501(c)(9) and the regulations
thereunder (§§ 1.501(c)(9)–1 through
1.501(c)(9)–8)) and certain excessive
employee remuneration (section 162(m)
and the regulations thereunder
(§§ 1.162–27, 1.162–31, and 1.162–33));
* * * * *
Sunita Lough,
Deputy Commissioner for Services and
Enforcement.
Approved: December 11, 2020.
David J. Kautter,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2020–28484 Filed 12–28–20; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF TREASURY
31 CFR Part 1
RIN 1505–AC66
Privacy Act of 1974; Exemption
AGENCY
: Departmental Offices,
Department of the Treasury.
ACTION
: Final rule.
SUMMARY
: In accordance with the
requirements of the Privacy Act of 1974,
the Department of the Treasury,
Departmental Offices (DO) gives notice
of a final rule exemption for a new
system of records entitled ‘‘Department
of the Treasury, Departmental Offices
.227—Committee on Foreign Investment
in the United States (CFIUS) Case
Management System,’’ maintained by
the Committee on Foreign Investment in
the United States from certain
provisions of the Privacy Act. 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
: Effective December 30, 2020.
FOR FURTHER INFORMATION CONTACT
:
Ryan Law, Deputy Assistant Secretary
for Management, Office of Privacy,
Transparency, and Records, 1750
Pennsylvania Avenue NW, 8th Floor,
Washington, DC 20220. Mr. Law may be
reached via telephone at (202) 622- 5710
(not a toll free number).
SUPPLEMENTARY INFORMATION
:
Background
The Department of the Treasury
(Treasury) published a notice of
proposed rulemaking in the Federal
Register, 85 FR 58308, September 18,
2020, proposing to exempt portions of
the system of records from one or more
provisions of the Privacy Act. As
background, in 2018, the Foreign
Investment Risk Review Modernization
Act of 2018 (FIRRMA), Subtitle A of
Title XVII of Public Law 115–232, 132
Stat. 2173, was enacted. FIRRMA
amends section 721 of the Defense
Production Act of 1950, as amended
(Section 721), which delineates the
authorities and jurisdiction of the
Committee on Foreign Investment in the
United States (CFIUS). FIRRMA
maintains CFIUS’s jurisdiction over any
transaction that could result in foreign
control of any U.S. business, and
broadens the authorities of the President
and CFIUS under Section 721 to review
and take action to address any national
security concerns arising from certain
non-controlling investments and certain
real estate transactions involving foreign
persons.
Executive Order 13456, 73 FR 4677
(January 23, 2008), directs the Secretary
of the Treasury to issue regulations
implementing Section 721. On January
17, 2020, Treasury published two rules
broadly implementing FIRRMA, and
those rules took effect on February 13,
2020. 85 FR 3112 and 85 FR 3158.
Subsequent amendments were made to
the regulations in 2020. 85 FR 8747, 85
FR 45311, and 85 FR 57124.
In addition to the exemptions below,
pursuant to section 721(c) of the
Defense Production Act of 1950, as
amended, 50 U.S.C. 4565(c) and subject
to certain exceptions provided therein,
any information or documentary
material filed with the President or
CFIUS under Section 721 is exempt
from disclosure under the Freedom of
Information Act, as amended (FOIA), 5
U.S.C. 552, and no such information or
documentary material may be made
public.
Treasury published separately the
notice of the new system of records
maintained by CFIUS. 85 FR 55534, as
amended.
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 title 5. (FOIA exemption
(b)(1) protects from disclosure
information that is ‘‘specifically
authorized 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
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Federal Register / Vol. 85, No. 250 / Wednesday, December 30, 2020 / Rules and Regulations
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
enforcement purposes protected by 5
U.S.C. 552a(k)(2), Treasury exempts the
following system of records from
various provisions of the Privacy Act:
DO .227 CFIUS Case Management
System.
Under 5 U.S.C. 552a(k)(1) and (k)(2),
Treasury exempts certain records in the
above-referenced system of records from
5 U.S.C. 552a(c)(3), (d)(1), (2), (3), and
(4), (e)(1), (e)(4)(G), (H), and (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 above-
referenced systems of records
maintained by CFIUS may be exempted
from various provisions of the Privacy
Act pursuant to 5 U.S.C. 552a(k)(1) and
(k)(2).
(1) From 5 U.S.C. 552a(c)(3)
(Accounting for Disclosures) because
release of the accounting of disclosures
of the records in this system could alert
individuals that they have been
identified as a national security threat or
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 CFIUS 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) From subsection 5 U.S.C.
552a(d)(1), (d)(2), (d)(3), and (d)(4)
(Access to Records), because access to a
portion of the records contained in this
system of records could inform
individuals whether they have been
identified as a national security threat or
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, CFIUS 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 subjects 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
paragraph (1)(i)–(vi) of this section.
Amendment of the records would
interfere with ongoing analysis and
impose an impossible administrative
burden given CFIUS’s statutory
deadlines. 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) From subsection 5 U.S.C.
552a(e)(1) (Relevance and Necessity of
Information), because in the course of
its operations, CFIUS must be able to
review information from a variety of
sources. What information is relevant
and necessary may not always be
apparent until after the evaluation is
completed. 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 foreign 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 foreign
investment activity.
(4) From subsection 5 U.S.C.
552a(e)(4)(G), (H), and (I) (Agency
Requirements), and 5 U.S.C. 552a(f),
because portions of this system are
exempt from the access and amendment
provisions of subsection (d). The reason
for invoking the exemption is to protect
material authorized to be kept secret in
the interest of national security
pursuant to Executive Orders 12968,
13526, successor or prior Executive
Orders, and other legal authorities
relevant to the intelligence
responsibilities of Treasury.
Any information from a system of
records for which an exemption is
claimed under 5 U.S.C. 552a(k)(1) or 5
U.S.C. 552a(k)(2) which is also included
in another system of records retains the
same exempt status such information
has in the system of records for which
such exemption is claimed.
This final 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. 601–612, it is hereby certified
that this rule will not have significant
economic impact on a substantial
number of small entities. The term
‘‘small entity’’ is defined to have the
same meaning as the terms ‘‘small
business,’’ ‘‘small organization’’ and
‘‘small governmental jurisdiction’’ as
defined in the RFA.
The regulation, issued under sections
(k)(1) and (k)(2) of the Privacy Act,
exempts certain information maintained
by Treasury in the above-referenced
systems of records from certain Privacy
Act rights of individuals who are United
States citizens or aliens lawfully
admitted for permanent residence. In as
much as the Privacy Act rights are
personal and apply only to U.S. citizens
or an alien lawfully admitted for
permanent residence, small entities, as
defined in the RFA, are not provided
rights under the Privacy Act and are
outside the scope of this regulation.
Public Comments
Treasury received one comment on
the notice of proposed rulemaking, but
it was outside the scope of the
rulemaking. No comments were
received on the system of records
notice. Treasury will implement the
rulemaking as proposed.
List of Subjects in 31 CFR Part 1
Courts, Freedom of information,
Government employees, Privacy.
For the reasons stated in the
preamble, part 1 of Title 31 of the Code
of Federal Regulations is amended as
follows:
PART 1—[AMENDED]
■1. The authority citation for part 1
continues to read as follows:
Authority: 5 U.S.C. 301 and 31 U.S.C. 321.
Subpart A also issued under 5 U.S.C. 552, as
amended. Subpart C also issued under 5
U.S.C. 552a, as amended.
■2. In § 1.36, amend the tables in
paragraphs (c)(1)(ii) and (g)(1)(ii) by
adding in alphanumeric order an entry
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for ‘‘DO .227 CFIUS Case Management
System’’ to read as follows:
§ 1.36 Systems exempt in whole or in part
from provisions of 5 U.S.C. 552a and this
part.
* * * * *
(c) * * *
(1) * * *
(ii) * * *
No. System name
*****
DO .227 .................................................... CFIUS Case Management System.
*****
* * * * *
(g) * * *
(1) * * *
(ii) * * *
No. System name
*****
DO .227 .................................................... CFIUS Case Management System.
*****
* * * * *
Ryan Law,
Deputy Assistant Secretary Privacy,
Transparency, and Records, U.S. Department
of the Treasury.
[FR Doc. 2020–26612 Filed 12–29–20; 8:45 am]
BILLING CODE P
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