Treasury National Security Information

20 May 2006

Source: http://www.gpoaccess.gov/cfr/index.html

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[Code of Federal Regulations]
[Title 31, Volume 1]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR2]

[Page 83-109]

TITLE 31--MONEY AND FINANCE: TREASURY

PART 2--NATIONAL SECURITY INFORMATION

Subpart A--Original Classification

Sec.
2.1 Classification levels [1.1(a)].
2.2 Classification Authority.
2.3 Listing of original classification authorities.
2.4 Record requirements.
2.5 Classification categories.
2.6 Duration of classification.
2.7 Identification and markings [1.5(a), (b) (c)].
2.8 Limitations on classification [1.6(c)].

Subpart B--Derivative Classification

2.9 Derivative Classification Authority.
2.10 Listing derivative classification authorities.
2.11 Use of derivative classification [2.1].
2.12 Classification guides.
2.13 Derivative identification and markings [1.5(c) and 2.1(b)].

Subpart C--Downgrading and Declassification

2.14 Listing downgrading and declassification authorities [3.1(b)].
2.15 Declassification policy [3.1].
2.16 Downgrading and declassification markings.
2.17 Systematic review for declassification [3.3].
2.18 Mandatory declassification review [3.4].
2.19 Assistance to the Department of State [3.3(b)].
2.20 Freedom of Information/Privacy Act requests [3.4].

Subpart D--Safeguarding

2.21 General [4.1].
2.22 General restrictions on access [4.1].
2.23 Access by historical researchers and former presidential
appointees [4.3].
2.24 Dissemination [4.1(d)].
2.25 Standards for security equipment [4.1(b) and 5.1(b)].
2.26 Accountability procedures [4.1(b)].
2.27 Storage [4.1(b)].
2.28 Transmittal [4.1(b)].
2.29 Telecommunications and computer transmissions.
2.30 Special access programs [1.2(a) and 4.2(a)].
2.31 Reproduction controls [4.1(b)].
2.32 Loss or possible compromise [4.1(b)].
2.33 Responsibilities of holders [4.1(b)].
2.34 Inspections [4.1(b)].
2.35 Security violations.
2.36 Disposition and destruction [4.1(b)].
2.37 National Security Decision Directive 197.

Subpart E--Implementation and Review

2.38 Departmental management.
2.39 Bureau administration.
2.40 Emergency planning [4.1(b)].
2.41 Emergency authority [4.1(b)].
2.42 Security education [5.3(a)].

Subpart F--General Provisions

2.43 Definitions [6.1].

Authority: 31 U.S.C. 321; E.O. 12958, 60 FR 19825, 3 CFR, 1995
Comp., p. 333.

Source: 55 FR 1644, Jan. 17, 1990, unless otherwise noted.

[[Page 84]]

Subpart A--Original Classification

Sec. 2.1 Classification levels [1.1(a)].\1\
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\1\ Related references are related to sections of Executive Order
12356, 47 FR 14874, April 6, 1982.
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(a) National security information (hereinafter also referred to as
``classified information'') shall be classified at one of the following
three levels:
(1) Top Secret shall be applied to information, the unauthorized
disclosure of which reasonably could be expected to cause exceptionally
grave damage to the national security.
(2) Secret shall be applied to information, the unauthorized
disclosure of which reasonably could be expected to cause serious damage
to the national security.
(3) Confidential shall be applied to information, the unauthorized
disclosure of which reasonably could be expected to cause damage to the
national security.
(b) Limitations [1.1(b)]. Markings other than ``Top Secret,''
``Secret,'' and ``Confidential,'' shall not be used to identify national
security information. No other terms or phrases are to be used in
conjunction with these markings to identify national security
information, such as ``Secret/Sensitive'' or ``Agency Confidential''.
The terms ``Top Secret,'' ``Secret,'' and ``Confidential'' are not to be
used to identify non-classified Executive Branch information. The
administrative control legend, ``Limited Official Use'', is authorized
in Treasury Directive 71-02, ``Safeguarding Officially Limited
Information,'' which requires that information so marked is to be
handled, safeguarded and stored in a manner equivalent to national
security information classified Confidential.
(c) Reasonable Doubt [1.1(c)]. When there is reasonable doubt about
the need to classify information, the information shall be safeguarded
as if it were ``Confidential'' information in accordance with subpart D
of this regulation, pending a determination about its classification.
Upon a final determination of a need for classification, the information
that is classified shall be marked as provided in Sec. 2.7. When there
is reasonable doubt about the appropriate classification level, the
information shall be safeguarded at the higher level in accordance with
subpart D, pending a determination of its classification level. Upon a
final determination of its classification level, the information shall
be marked as provided in Sec. 2.7.

Sec. 2.2 Classification Authority.

Designations of original classification authority for national
security information are contained in Treasury Order (TO) 102-19 (or
successor order), which is published in the Federal Register. The
authority to classify inheres within the office and may be exercised by
a person acting in that capacity. There may be additional redelegations
of original classification authority made pursuant to TO 102-19 (or
successor order). Officials with original classification authority may
derivatively classify at the same classification level.

[63 FR 14357, Mar. 25, 1998]

Sec. 2.3 Listing of original classification authorities.

Delegations of original Top Secret, Secret and Confidential
classification authority shall be in writing and be reported annually to
the Departmental Director of Security, who shall maintain such
information on behalf of the Assistant Secretary (Management). These
delegations are to be limited to the minimum number absolutely required
for efficient administration. Periodic reviews and evaluations of such
delegations shall be made by the Departmental Director of Security to
ensure that the officials so designated have demonstrated a continuing
need to exercise such authority. If, after reviewing and evaluating the
information, the Departmental Director of Security determines that such
officials have not demonstrated a continuing need to exercise such
authority, the Departmental Director of Security shall recommend to the
Assistant Secretary (Management), as warranted, the reduction or
elimination of such authority. The Assistant Secretary (Management)
shall take appropriate action in consultation with the affected
official(s) and the Departmental Director of Security. Such action may

[[Page 85]]

include relinquishment of this authority where the Assistant Secretary
(Management) determines that a firm basis for retention does not exist.

Sec. 2.4 Record requirements.

The Departmental Director of Security shall maintain a listing by
name, position title and delegated classification level, of all
officials in the Departmental Offices who are authorized under this
regulation to originally classify information as Top Secret, Secret or
Confidential. Officials within the Departmental Offices with Top Secret
classification authority shall report in writing on TD F 71-01.14
(Report of Authorized Classifiers) to the Departmental Director of
Security, the names, position titles and authorized classification
levels of the officials designated by them in writing to have original
Secret or Confidential classification authority. The head of each bureau
shall maintain a similar listing of all officials in his or her bureau
authorized to apply original Secret and Confidential classification and
shall provide a copy of TD F 71-01.14, reflecting the list of officials
so authorized, to the Departmental Director of Security. These listings
shall be compiled and reported no less than annually each October 15th
as required by Treasury Directive 71-01, ``Agency Information Security
Program Data''.

Sec. 2.5 Classification categories.

(a) Classification in Context of Related Information [1.3(b)].
Certain information which would otherwise be unclassified may require
classification when combined or associated with other unclassified or
classified information. Such classification on an aggregate basis shall
be supported by a written explanation that, at a minimum, shall be
maintained with the file or referenced on the record copy of the
information.
(b) Unofficial Publication or Disclosure [1.3(d)]. Following an
inadvertent or unauthorized publication or disclosure of information
identical or similar to information that has been classified in
accordance with the Order or predecessor Orders, the agency of primary
interest shall determine the degree of damage to the national security,
the need for continued classification, and, in coordination with the
agency in which the disclosure occurred, what action must be taken to
prevent similar occurrences under procedures contained in Sec. 2.32.

Sec. 2.6 Duration of classification.

(a) Information Not Marked for Declassification [1.4]. Information
classified under predecessor orders that is not subject to automatic
declassification shall remain classified until reviewed for possible
declassification.
(b) Authority to Extend Automatic Declassification Determinations
[1.4(b)]. The authority to extend classification of information subject
to automatic declassification under any predecessor Executive Order to
the Order is limited to those officials who have classification
authority over the information and are designated in writing to have
original classification authority at the level of the information to
remain classified. Any decision to extend the classification on other
than a document-by-document basis shall be reported to the Assistant
Secretary (Management) who shall, in turn, report this fact to the
Director of the Information Security Oversight Office.

Sec. 2.7 Identification and markings [1.5(a), (b) and (c)].

The information security system requires that standard markings be
applied to classified information. Except in extraordinary circumstances
as provided in section 1.5(a) of the Order, or as indicated herein, the
marking of paper and electronically created documents shall not deviate
from the following prescribed formats. These markings shall also be
affixed to material other than paper and electronically created
documents, including file folders, film, tape, etc., or the originator
shall provide holders or recipients of the information with written
instructions for protecting the information.
(a) Classification Level. The markings ``Top Secret,'' ``Secret,''
and ``Confidential'' are used to indicate: information that requires
protection as classified information under the Order;

[[Page 86]]

the highest level of classification contained in a document; the
classification level of each page and, in abbreviated form, the
classification of each portion of a document.
(1) Overall Marking. The highest level of classification of
information in a document shall be marked in such a way as to
distinguish it clearly from the informational text. Markings shall
appear at the top and bottom of the outside of the front cover (if any),
on the title page (if any), on the first and last pages bearing text,
and on the outside of the back cover (if any).
(2) Page Marking. Each interior page of a classified document is to
be marked at the top and bottom, either according to the highest
classification of the content of the page, including the designation
``UNCLASSIFIED'' when it is applicable, or with the highest overall
classification of the document.
(3) Portion Marking. Only the Secretary of the Treasury may waive
the portion marking requirement for specified classes of documents or
information upon a written determination that:
(i) There will be minimal circulation of the specified documents or
information and minimal potential usage of the documents or information
as a source for derivative classification determinations; or
(ii) There is some other basis to conclude that the potential
benefits of portion marking are clearly outweighed by the increased
administrative burdens.
(b) Unless the portion marking requirement has been waived as
authorized, each portion of a document, including subjects and titles,
shall be marked by placing a parenthetical designation either
immediately preceding or following the text to which it applies. The
symbols, ``(TS)'' for Top Secret, ``(S)'' for Secret, ``(C)'' for
Confidential, and ``(U)'' for Unclassified shall be used for this
purpose. The symbol, ``(LOU)'' shall be used for Limited Official Use
information. If the application of parenthetical designations is not
practicable, the document shall contain a statement sufficient to
identify the information that is classified and the level of such
classification, as well as the information that is not classified. If
all portions of a document are classified at the same level, this fact
may be indicated by a statement to that effect, e.g. ``Entire Text is
Classified Confidential.'' If a subject or title requires
classification, an unclassified identifier may be applied to facilitate
reference.
(c) Classification Authority. If the original classifier is other
than the signer or approver of the document, his or her indentity shall
be shown at the bottom of the first and last pages as follows:
``CLASSIFIED BY (identification of original classification authority)''.
(d) Bureau and Office of Origin. If the identity of the originating
bureau or office is not apparent on the face of the document, it shall
be clearly indicated below the ``CLASSIFIED BY'' line.
(e) Downgrading and Declassification Instructions. Downgrading and,
as applicable, declassification instructions shall be shown as follows:
(1) For information to be declassified automatically on a specific
date:

Classified by___________________________________________________________
Office__________________________________________________________________
Declassify on (date)____________________________________________________

(2) For information to be declassified automatically upon the
occurrence of a specific event:

Classified by __________________________________________________________
Office _________________________________________________________________
Declassify on (description of event) ___________________________________

(3) For information not to be declassified automatically:

Classified by __________________________________________________________
Office _________________________________________________________________
Declassify on Origination Agency's Determination Required or ``OADR''

(4) For information to be downgraded automatically on a specific
date or upon occurrence of a specific event:

Classified by __________________________________________________________
Office _________________________________________________________________
Downgrade to ___________________________________________________________
on (date or description of event) ______________________________________

(f) Special Markings--(1) Transmittal Documents [1.5(c)]. A
transmittal document shall indicate on its first page and last page, if
any, the highest classification of any information transmitted by it. It
shall also include on

[[Page 87]]

the first and last pages the following or similar instruction:
(i) For an unclassified transmittal document:

Unclassified When Classified
Enclosure(s) Detached.

(ii) For a classified transmittal document:

Upon Removal of Attachment(s)
this Document is _______________________________________________________

(classification level of the transmittal document alone), or:

This Document is Classified ____________________________________________
with Unclassified Attachment(s).

(2) Restricted Data or Formerly Restricted Data [6.2(a)]. Restricted
Data or Formerly Restricted Data shall be marked in accordance with
regulations issued under the Atomic Energy Act of 1954, as amended.
Restricted Data is information dealing with the design, manufacture, or
utilization of atomic weapons, production of special nuclear material or
use of special nuclear material in the production of energy. Formerly
Restricted Data is classified information that has been removed from the
``restricted data'' category but still remains classified. It relates
primarily to the military utilization of atomic weapons.
(3) Intelligence Sources or Methods [1.5(c)]. Documents that contain
information relating to intelligence sources or methods shall include
the following marking unless otherwise prescribed by the Director of
Central Intelligence: ``WARNING NOTICE--INTELLIGENCE SOURCES OR METHODS
INVOLVED'' To avoid confusion as to the extent of dissemination and use
restrictions governing the information involved, this marking may not be
used in conjunction with special access or sensitive compartmented
information controls.
(4) Foreign Government Information (FGI) [1.5(c)]. Documents that
contain FGI shall include either the marking ``FOREIGN GOVERNMENT
INFORMATION,'' or a marking that otherwise indicates that the
information is foreign government information. If the information is
foreign government information that must be concealed, given the
relationship or understanding with the foreign government providing the
information, the marking shall not be used and the document shall be
marked as if it were wholly of United States origin. However, such a
marking must be supported by a written explanation that, at a minimum,
shall be maintained with the file or referenced on the original or
record copy of the document or information.
(5) National Security Information [4.1(c)]. Classified information
furnished outside the Executive Branch shall show the following marking:

NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to
Administrative and Criminal Sanctions

(6) Automated Data Processing (ADP) and Computer Output [1.5(c)].
(i) Documents that are generated via ADP or as computer output may be
marked automatically by systems software. If automatic marking is not
practicable, such documents must be marked manually.
(ii) Removable information storage media, however, will bear
external labels indicating the security classification of the
information and associated security markings, as applicable, such as
handling caveats and dissemination controls. Examples of such media
include magnetic tape reels, cartridges, and cassettes; removable disks,
disk cartridges, disk packs, and diskettes, including ``floppy'' or
flexible disks; paper tape reels; and magnetic and punched cards. Two
labels may be required on each medium: a color coded security
classification label, i.e., orange Standard Form 706 (Top Secret label),
red SF 707 (Secret label), blue SF 708 (Confidential label), purple SF
709 (Classified label), green SF 710 (Unclassified label); and a white
SF 711 (Data Descriptor label). National stock numbers of the labels,
which are available through normal Federal Supply channels, are as
follows: SF 706, 7540-01-207-5536; SF 707, 7450-01-207-5537; SF 708,
7450-01-207-5538; SF 709, 7540-01-207-5540; SF 710, 7540-01-207-5539 and
SF 711, 7540-01-207-5541. Treasury Directive 71-02 provides for the use
of a green ``Officially Limited Information'' label, TD F 71-05.2, to
identify information so marked.
(iii) In a mixed environment in which classified and unclassified
information in processed or stored, the ``Unclassified'' label must be
used to identify the

[[Page 88]]

media containing unclassified information. In environments in which only
unclassified information is processed or stored, the use of the
``Unclassified'' label is not required. Unclassified media, however,
that are on loan from (and must be returned to) vendors do not require
the ``Unclassified'' label, but each requires a Data Descriptor label
with the words, ``Unclassified Vendor Medium'' entered on it.
(iv) Each medium shall be appropriately affixed with a
classification label and, as applicable, with a Data Descriptor label at
the earliest practicable time as soon as the proper security
classification or control has been established. Labels shall be
conspicuously placed on media in a manner that will not adversely affect
operation of the equipment in which the media is used. Once applied, the
label is not to be removed. A label to identify a higher level of
classification may, however, be applied on top of a lower classification
level in the event that the content of the media changes, e.g., from
Confidential to Secret. A lower classification label may not be applied
to media already bearing a higher classification label. Personnel shall
be responsible for appropriately labeling and controlling ADP and
computer storage media within their possession.
(g) Electronically Transmitted Information (Messages) [1.5(c)].
Classified information that is transmitted electronically shall be
marked as follows:
(1) The highest level of classification shall appear before the
first line of text;
(2) A ``CLASSIFIED BY'' line is not required;
(3) The duration of classification shall appear as follows:
(i) For information to be declassified automatically on a specific
date: ``DECL: (date)'';
(ii) For information to be declassified upon occurrence of a
specific event: ``DECL: (description of event)'';
(iii) For information not to be automatically declassified which
requires the originating agency's determination (see also
Sec. 2.7(e)(3)): ``DECL: OADR'';
(iv) For information to be automatically downgraded: ``DOWNGRADE TO
(classification level to which the information is to be downgraded) ON
(date or description of event on which downgrading is to occur)''.
(4) Portion marking shall be as prescribed in Sec. 2.7(a)(3);
(5) Specially designated markings as prescribed in Sec. 2.7(f) (2),
(3), and (4) shall appear after the marking for the highest level of
classification. These include:
(i) Restricted Data or Formerly Restricted Data;
(ii) Information concerning intelligence sources or methods:
``WNINTEL,'' unless otherwise prescribed by the Director of Central
Intelligence; and
(iii) Foreign Government Information (FGI).
(6) Paper copies of electronically transmitted messages shall be
marked as provided in Sec. 2.7(a) (1), (2), and (3).
(h) Changes in Classification Markings [4.1(b)]. When a change is
made in the duration of classified information, all holders of record
shall be promptly notified. If practicable, holders of record shall also
be notified of a change in the level of classification. Holders shall
alter the markings on their copy of the information to conform to the
change, citing the authority for it. If the remarking of large
quantities of information is unduly burdensome, the holder may attach a
change of classification notice to the storage unit in lieu of the
marking action otherwise required. Items withdrawn from the collection
for purposes other than transfer for storage shall be marked promptly in
accordance with the change notice.

Sec. 2.8 Limitations on classification [1.6(c)].

(a) Before reclassifying information as provided in section 1.6(c)
of the Order, authorized officials, who must have original
classification authority and jurisdiction over the information involved,
shall consider the following factors which shall be addressed in a
report to the Assistant Secretary (Management) who shall in turn forward
a report to the Director of the Information Security Oversight Office:
(1) The elapsed time following disclosure;
(2) The nature and extent of disclosure;

[[Page 89]]

(3) The ability to bring the fact of reclassification to the
attention of persons to whom the information was disclosed;
(4) The ability to prevent further disclosure; and
(5) The ability to retrieve the information voluntarily from persons
not authorized access in its reclassified state.
(b) Information may be classified or reclassified after it has been
requested under the Freedom of Information Act (5 U.S.C. 552), the
Privacy Act of 1974 (5 U.S.C. 552a), or the mandatory declassification
review provisions of the Order if such classification meets the
requirements of the Order and is accomplished personally and on a
document-by-document basis by the Secretary of the Treasury, the Deputy
Secretary, the Assistant Secretary (Management) or an official with
original Top Secret classification authority. Such reclassification
actions shall be reported in writing to the Departmental Director of
Security.
(c) In no case may information be classified or reclassified in
order to conceal violations of law, inefficiency, or administrative
error; to prevent embarrassment to a person, organization, or agency; to
restrain competition; or to prevent or delay the release of information
that does not require protection in the interest of national security.

Subpart B--Derivative Classification

Sec. 2.9 Derivative Classification Authority.

Designations of derivative classification authority for national
security information are contained in Treasury Order 102-19 (or
successor order). The authority to derivatively classify inheres within
the office and may be exercised by a person acting in that capacity.
There may be additional redelegations of derivative classification
authority made pursuant to TO 102-19 (or successor order). Officials
identified in Treasury Order 102-19 (or successor order) may also
administratively control and decontrol sensitive but unclassified
information using the legend ``Limited Official Use'' and may redelegate
their authority to control and decontrol. Such redelegations shall be in
writing on TD F 71-01.20 ``Designation of Controlling/Decontrolling
Officials'' (or successor form).

[63 FR 14357, Mar. 25, 1998]

Sec. 2.10 Listing derivative classification authorities.

Delegations of derivative classification authority to officials not
otherwise identified in Sec. 2.9, shall be in writing and reported
annually each October 15th to the Departmental Director of Security on
TD F 71-01.18 (Report of Authorized Derivative Classifiers). Such
delegations shall be limited to the minimum number absolutely required
for efficient administration. Periodic reviews and evaluations of such
delegations shall be made by the Departmental Director of Security to
ensure that officials so designated have demonstrated a continuing need
to exercise such authority. If after reviewing and evaluating the
information the Departmental Director of Security determines that such
officials have not demonstrated a continuing need to exercise such
authority, the Departmental Director of Security shall recommend to the
Assistant Secretary (Management), as warranted, the reduction or
elimination of such authority. The Assistant Secretary (Management)
shall take appropriate action in consultation with the affected
official(s) and the Departmental Director of Security. Such action may
include relinquishment of this authority where the Assistant Secretary
(Management) determines that a firm basis for retention does not exist.

Sec. 2.11 Use of derivative classification [2.1].

The application of derivative classification markings is a
responsibility of those who incorporate, paraphrase, restate, or
generate in new form information that is already classified, and of
those who apply markings in accordance with instructions from an
authorized original classifier or in accordance with an approved
classification guide. If an individual who applies derivative
classification markings believes that the paraphrasing, restating or
summarizing of classified information has

[[Page 90]]

changed the level of or removed the basis for classification, that
person must consult an appropriate official of the originating agency or
office of origin who has the authority to upgrade, downgrade or
declassify the information for a final determination. A sample marking
of derivatively classified documents is set forth in Sec. 2.13.

Sec. 2.12 Classification guides.

(a) General [2.2(a)]. A classification guide is a reference manual
which assists document drafters and document classifiers in determining
what types or categories of material have already been classified. The
classification guide shall, at a minimum:
(1) Identify and categorize the elements of information to be
protected;
(2) State which classification level applies to each element or
category of information; and
(3) Prescribe declassification instructions for each element or
category of information in terms of:
(i) A period of time,
(ii) The occurrence of an event, or
(iii) A notation that the information shall not be declassified
automatically without the approval of the originating agency i.e.,
``OADR''.
(b) Review and Record Requirements [2.2(a)]. (1) Each classification
guide shall be kept current and shall be reviewed at least once every
two years and updated as necessary. Each office within the Departmental
Offices and the respective offices of each Treasury bureau possessing
original classification authority for national security information
shall maintain a list of all classification guides in current use by
them. A copy of each such classification guide in current use shall be
furnished to the Departmental Director of Security who shall maintain
them on behalf of the Assistant Secretary (Management).
(2) Each office and bureau that prepares and maintains a
classification guide shall also maintain a record of individuals
authorized to apply derivative classification markings in accordance
with a classification guide. This record shall be maintained on TD F 71-
01.18 (Report of Authorized Derivative Classifiers) which shall be
reported annually each October 15th to the Departmental Director of
Security.
(c) Waivers [2.2(c)]. Any authorized official desiring a waiver of
the requirement to issue a classification guide shall submit in writing
to the Assistant Secretary (Management) a request for approval of such a
waiver. Any request for a waiver shall contain, at a minimum, an
evaluation of the following factors:
(1) The ability to segregate and describe the elements of
information;
(2) The practicality of producing or disseminating the guide because
of the nature of the information;
(3) The anticipated usage of the guide as a basis for derivative
classification; and
(4) The availability of alternative sources for derivatively
classifying the information in a uniform manner.

Sec. 2.13 Derivative identification and markings [1.5(c) and 2.1(b)].

Information classified derivatively on the basis of source documents
or classification guides shall bear all markings prescribed in Sec. 2.7
(a) through (f), as are applicable. Information for these markings shall
be taken from the source document or instructions in the appropriate
classification guide.
(a) Classification Authority. The authority for classification shall
be shown as follows:

Derivatively Classified by _____________________________________________
Office _________________________________________________________________
Derived from____________________________________________________________
Declassify on___________________________________________________________

If a document is classified on the basis of more than one source
document or classification guide, the authority for classification shall
be shown on the ``DERIVED FROM'' line as follows: ``MULTIPLE CLASSIFIED
SOURCES''. In these cases, the derivative classifier must maintain the
identification of each source with the file or record copy of the
derivatively classified document. A document derivatively classified on
the basis of a source document that is marked ``MULTIPLE CLASSIFIED
SOURCES'' shall cite the source document on its ``DERIVED FROM'' line
rather than the term: ``MULTIPLE CLASSIFIED

[[Page 91]]

SOURCES''. Preparers of such documentation shall ensure that the
identification of the derivative classifier is indicated. Use of the
term ``MULTIPLE CLASSIFIED SOURCES,'' is not to be a substitute for the
identity of the derivative classification authority.
(b) Downgrading and Declassification Instructions. Dates or events
for automatic downgrading or declassification shall be carried forward
from the source document. This includes the notation ``ORIGINATING
AGENCY'S DETERMINATION REQUIRED'' to indicate that the document is not
to be downgraded or declassified automatically, or instructions as
directed by a classification guide, which shall be shown on a
``DOWNGRADE TO'' or ``DECLASSIFY ON'' line as follows:

DOWNGRADE TO____________________________________________________________
ON (date, description of event, or OADR) or,
DECLASSIFY ON (date, description of event, or OADR)

Subpart C--Downgrading and Declassification

Sec. 2.14 Listing downgrading and declassification authorities 3.1(b)].

Downgrading and declassification authority may be exercised by the
official authorizing the original classification, if that official is
still serving in the same position; a successor in that capacity; a
supervisory official of either; or officials delegated such authority in
writing by the Secretary of the Treasury or the Assistant Secretary
(Management). Such officials may not downgrade or declassify information
which is classified at a level exceeding their own designated
classification authority. A listing of officials delegated such
authority, in writing, shall be identified on TD F 71-01.11 (Report of
Authorized Downgrading and Declassification Officials) and reported
annually each October 15th to the Departmental Director of Security who
shall maintain them on behalf of the Assistant Secretary (Management).
Current listings of officials so designated shall be maintained by
Treasury bureaus and offices within the Departmental Offices.

[55 FR 1644, Jan. 17, 1990; 55 FR 13134, Apr. 9, 1990]

Sec. 2.15 Declassification policy [3.1].

In making determinations under section 3.1(a) of the Order,
officials shall respect the intent of the Order to protect foreign
government information and confidential foreign sources.

Sec. 2.16 Downgrading and declassification markings.

Whenever a change is made in the original classification or in the
dates of downgrading or declassification of any classified information,
it shall be promptly and conspicuously marked to indicate the change,
the authority for the action, the date of the action, and the identity
of the person taking the action. Earlier classification markings shall
be cancelled or otherwise obliterated when practicable. See also
Sec. 2.7(h).

Sec. 2.17 Systematic review for declassification [3.3].

(a) Permanent Records. Systematic review is applicable only to those
classified records and presidential papers or records that the Archivist
of the United States, acting under the Federal Records Act, has
determined to be of sufficient historical or other value to warrant
permanent retention.
(b) Non-Permanent Classified Records. Non-permanent classified
records shall be disposed of in accordance with schedules approved by
the Administrator of General Services under the Records Disposal Act.
These schedules shall provide for the continued retention of records
subject to an ongoing mandatory declassification review request.
(c) Systematic Declassification Review Guidelines [3.3(a)]. As
appropriate, guidelines for systematic declassification review shall be
issued by the Assistant Secretary (Management) in consultation with the
Archivist of the United States, the Director of the Information Security
Oversight Office and Department officials, to assist the Archivist in
the conduct of systematic reviews. Such guidelines shall be reviewed and
updated at least every five years unless earlier review is requested by
the Archivist.
(d) Foreign Government Systematic Declassification Review Guidelines
[3.3(a)]. As appropriate, guidelines for systematic declassification
review of foreign

[[Page 92]]

government information shall be issued by the Assistant Secretary
(Management) in consultation with the Archivist of the United States,
the Director of the Information Security Oversight Office, Department
officials and other agencies having declassification authority over the
information. These guidelines shall be reviewed and updated every five
years unless earlier review is requested by the Archivist.
(e) Special Procedures. The Department shall be bound by the special
procedures for systematic review of classified cryptologic records and
classified records pertaining to intelligence activities (including
special activities), or intelligence sources or methods issued by the
Secretary of Defense and the Director of Central Intelligence,
respectively.

Sec. 2.18 Mandatory declassification review [3.4].

(a) Except as provided by section 3.4 (b) of the Order, all
information classified by the Department under the Order or any
predecessor Executive Order shall be subject to declassification review
by the Department, if:
(1) The request is made by a United States citizen or permanent
resident alien, a Federal agency, or a state or local government;
(2) The request describes the document or material containing the
information with sufficient specificity to enable the Department to
locate it with a reasonable amount of effort; and
(3) The requester provides substantial proof as to his or her United
States citizenship or status as a permanent resident alien, e.g., a copy
of a birth certificate, a certificate of naturalization, official
passport or some other means of identity which sufficiently describes
the requester's status. A permanent resident alien is any individual,
who is not a citizen or national of the United States, who has been
lawfully accorded the privilege of residing permanently in the United
States as an immigrant in accordance with the immigration laws, such
status not having changed. Permanent means a relationship of continuing
or lasting nature, as distinguished from temporary, but a relationship
may be permanent even though it is one that may be dissolved eventually
at the instance either of the United States or of the individual, in
accordance with law.
(b) Processing--(1) Initial Requests for Classified Records
Originated by the Department. Requests for mandatory declassification
review shall be directed to the Departmental Office of Security, 1500
Pennsylvania Avenue, NW., Washington, DC 20220. Upon receipt of each
request for declassification, pursuant to section 3.4 of the Order, the
following procedures shall apply:
(i) The Departmental Office of Security shall acknowledge the
receipt of the request in writing.
(ii) A valid mandatory declassification review request need not
identify the requested information by date or title of the responsive
records, but must be of sufficient particularity to allow Treasury
personnel to locate the records containing the information sought with a
reasonable amount of effort. Whenever a request does not reasonably
describe the information sought, the requester shall be notified by the
Departmental Office of Security that unless additional information is
provided or the scope of the request is narrowed, no further action will
be undertaken.
(iii) The Departmental Office of Security shall determine the
appropriate office or bureau to take action on the request and shall
forward the request to that office or bureau.
(iv) In responding to mandatory declassification review requests,
the appropriate reviewing officials shall make a prompt declassification
determination. The Departmental Office of Security shall notify the
requester if additional time is needed to process the request. Reviewing
officials shall also identify the amount of search and/or review time
required to process the request. The Department shall make a final
determination within one year from the date of receipt except in unusual
circumstances. When information cannot be declassified in its entirety,
reasonable efforts, consistent with other applicable laws, will be made
to release those declassified portions of the requested information
which constitute a coherent segment. Upon the denial or partial denial
of an

[[Page 93]]

initial request, the Departmental Office of Security shall also notify
the requester of the right of an administrative appeal which must be
filed with the Assistant Secretary (Management) within 60 days of
receipt of the denial.
(v) When the Department receives a mandatory declassification review
request for records in its possession that were originated by another
agency, the Departmental Office of Security shall forward the request to
that agency. The Departmental Office of Security shall include a copy of
the records requested together with the Department's recommendations for
action. Upon receipt, the originating agency shall process the request
in accordance with the Directive 32 CFR 2001.32(a)(2)(i). The
originating agency shall also be requested to communicate its
declassification determination to Treasury.
(vi) When another agency forwards to the Department a request for
information in that agency's custody that has been classified by
Treasury, the Departmental Office of Security shall:
(A) Advise the other agency as to whether it can notify the
requester of the referral;
(B) Review the classified information in coordination with other
agencies that have a direct interest in the subject matter; and
(C) Respond to the requester in accordance with the procedures in
Sec. 2.18(b)(1)(iv). If requested, Treasury's determination shall be
communicated to the referring agency.
(vii) Appeals of denials of a request for declassification shall be
referred to the Assistant Secretary (Management) who shall normally make
a determination within 30 working days following the receipt of an
appeal. If additional time is required to make a determination, the
Assistant Secretary (Management) shall notify the requester of the
additional time needed and provide the requester with the reason for the
extension. The Assistant Secretary (Management) shall notify the
requester in writing of the final determination and, as applicable, the
reasons for any denial.
(viii) Except as provided in this paragraph, the Department shall
process mandatory declassification review requests for classified
records containing foreign government information in accordance with
Sec. 2.18(a). The agency that initially received or classified the
foreign government information shall be responsible for making a
declassification determination after consultation with concerned
agencies. If upon receipt of the request, the Department determines that
Treasury is not the agency that received or classified the foreign
government information, it shall refer the request to the appropriate
agency for action. Consultation with the foreign originator through
appropriate channels may be necessary prior to final action on the
request.
(ix) Mandatory declassification review requests for cryptologic
information and/or information concerning intelligence activities
(including special activities) or intelligence sources or methods shall
be processed solely in accordance with special procedures issued by the
Secretary of Defense and the Director of Central Intelligence,
respectively.
(x) The fees to be charged for mandatory declassification review
requests shall be for search and/or review and duplication. The fee
charges for services of Treasury personnel involved in locating and/or
reviewing records shall be at the rate of a GS-10, Step 1, for each hour
or fraction thereof, except that no charge shall be imposed for search
and/or review consuming less than one hour.
(A) Photocopies per page up to 8\1/2\&lt;gr-thn-eq&gt; by 14&lt;gr-thn-eq&gt;
shall be charged at the rate of 10 cents each except that no charge will
be imposed for reproducing ten (10) pages or less when search and/or
review time requires less than one hour.
(B) When it is estimated that the costs associated with the
mandatory declassification review request will exceed $100.00, the
Departmental Office of Security shall notify the requester of the likely
cost and obtain satisfactory written assurance of full payment or may
require the requester to make an advance payment of the entire fee
before continuing to process the request. The Department reserves the
right to request prepayment after a mandatory declassification review
request is processed and before documents are released. In the event the
requester does

[[Page 94]]

not agree to pay the actual charges, he or she shall advise how to
proceed with the mandatory declassification review request. Failure of a
requester to pay charges after billing will result in future requests
not being honored.
(C) In order for a requester's initial request to be processed it
shall be accompanied by a statement that he or she is agreeable to
paying fees for search and/or review and copying. In the event the
initial request does not include this statement, processing of the
request will be held in abeyance until such time as the required
statement is received. Failure to provide a response within a reasonable
amount of time will serve as the basis for administratively terminating
the mandatory declassification review request.
(D) Payment of fees shall be made by check or money order payable to
the Treasurer of the United States. Fees levied by the Department of the
Treasury for mandatory declassification review requests are separate and
distinct from any other fees which might be imposed by a Presidential
Library, the National Archives and Records Administration or another
agency or department.

Sec. 2.19 Assistance to the Department of State [3.3(b)].

The Secretary of the Treasury shall assist the Department of State
in its preparation of the ``Foreign Relations of the United States''
series by facilitating access to appropriate classified material in
Treasury custody and by expediting declassification review of documents
proposed for inclusion in the series.

Sec. 2.20 Freedom of Information/Privacy Act requests [3.4].

The Department of the Treasury shall process requests for records
containing classified national security information that are submitted
under the provisions of the Freedom of Information Act, as amended, or
the Privacy Act of 1974, as amended, in accordance with the provisions
of those Acts.

Subpart D--Safeguarding

Sec. 2.21 General [4.1].

Information classified pursuant to this Order or predecessor Orders
shall be afforded a level of protection against unauthorized disclosure
commensurate with its level of classification.

Sec. 2.22 General restrictions on access [4.1].

(a) Determination of Need-To-Know. Classified information shall be
made available to a person only when the possessor of the classified
information establishes in each instance, except as provided in section
4.3 of the Order, that access is essential to the accomplishment of
official United States Government duties or contractual obligations.
(b) Determination of Trustworthiness. A person is eligible for
access to classified information only after a showing of trustworthiness
as determined by the Secretary of the Treasury based upon appropriate
investigations in accordance with applicable standards and criteria.
(c) Classified Information Nondisclosure Agreement. Standard Form
312 (Classified Information Nondisclosure Agreement) or the prior SF
189, bearing the same title, are nondisclosure agreements between the
United States and an individual. The execution of either the SF 312 or
SF 189 agreement by an individual is necessary before the United States
Government may grant the individual access to classified information.
Bureaus and the Departmental Offices must retain executed copies of the
SF 312 or prior SF 189 in file systems from which the agreements can be
expeditiously retrieved in the event the United States must seek their
enforcement. Copies or legally enforceable facsimiles of the SF 312 or
SF 189 must be retained for 50 years following their date of execution.
The national stock number for the SF 312 is 7540-01-280-5499.

[[Page 95]]

Sec. 2.23 Access by historical researchers and former presidential
appointees [4.3].

(a) Access to classified information may be granted only as is
essential to the accomplishment of authorized and lawful United States
Government purposes. This requirement may be waived, however, for
persons who:
(1) Are engaged in historical research projects, or
(2) Previously have occupied policymaking positions to which they
were appointed by the President.
(b) Access to classified information may be granted to historical
researchers and to former Presidential appointees upon a determination
of trustworthiness; a written determination that such access is
consistent with the interests of national security; the requestor's
written agreement to safeguard classified information; and the
requestor's written consent to have his or her notes and manuscripts
reviewed to ensure that no classified information is contained therein.
The conferring of historial researcher status does not include
authorization to release foreign government information or other
agencies' classified information per Sec. 2.24 of this part. By the
terms of section 4.3(b)(3) of the Order, former Presidential appointees
not engaged in historical research may only be granted access to
classified documents which they ``originated, reviewed, signed or
received while serving as a Presidential appointee.'' Coordination shall
be made with the Departmental Director of Security with respect to the
required written agreements to be signed by the Department and such
historical researchers or former Presidential appointees, as a condition
of such access and to ensure the safeguarding of classified information.
(c) If the access requested by historical researchers and former
Presidential appointees requires the rendering of services for which
fair and equitable fees may be charged pursuant to 31 U.S.C. 9701, the
requestor shall be so notified and the fees may be imposed. Treasury's
fee schedule identified in Sec. 2.18(b)(1)(x), applicable to mandatory
declassification review, shall also apply to fees charged for services
provided to historical researchers and former Presidential appointees
for search and/or review and copying.

Sec. 2.24 Dissemination [4.1(d)].

Except as otherwise provided by section 102 of the National Security
Act of 1947, 61 Stat. 495, 50 U.S.C. 403, classified information
originating in another agency may not be disseminated outside the
Department without the consent of the originating agency.

Sec. 2.25 Standards for security equipment [4.1(b) and 5.1(b)].

The Administrator of General Services issues (in coordination with
agencies originating classified information), establishes and publishes
uniform standards, specifications, and supply schedules for security
equipment designed to provide for secure storage and to destroy
classified information. Treasury bureaus and the Departmental Offices
may establish more stringent standards for their own use. Whenever new
security equipment is procured, it shall be in conformance with the
standards and specifications referred to above and shall, to the maximum
extent practicable, be of the type available through the Federal Supply
System.

Sec. 2.26 Accountability procedures [4.1(b)].

(a) Top Secret Control Officers. Each Treasury bureau and the
Departmental Offices shall designate a primary and alternate Top Secret
Control Officer. Within the Departmental Offices, the Top Secret Control
Officer function will be established in the Office of the Executive
Secretary for collateral Top Secret information and in the Office of the
Special Assistant to the Secretary (National Security) with respect to
sensitive compartmented information. The term ``collateral'' refers to
national security information classified Confidential, Secret, or Top
Secret under the provisions of Executive Order 12356 or prior Orders,
for which special intelligence community systems of compartmentation
(such as sensitive compartmented information) or special access programs
are not formally established. Top Secret Control Officers so designated
must have a Top Secret security clearance and shall:

[[Page 96]]

(1) Initially receive all Top Secret information entering their
respective bureau, including the Departmental Offices. Any Top Secret
information received by a Treasury bureau or Departmental Offices
employee shall be immediately hand carried to the designated Top Secret
Control Officer for proper accountability.
(2) Maintain current accountability records of Top Secret
information received within their bureau or office.
(3) Ensure that Top Secret information is properly stored and that
Top Secret information under their control is personally destroyed, when
required. Top Secret information must be destroyed in the presence of an
appropriately cleared official who shall actually witness such
destruction. Accordingly, the use of burnbags to store Top Secret
information, pending final destruction at a later date, is not
authorized.
(4) Ensure that prohibitions against reproduction of Top Secret
information are strictly followed.
(5) Conduct annual physical inventories of Top Secret information.
An inventory shall be conducted in the presence of an individual with an
appropriate security clearance. The inventory shall be completed
annually and signed by the Top Secret Control Officer and the witnessing
individual.
(6) Ensure that Top Secret documents are downgraded, declassified,
retired or destroyed as required by regulations or other markings.
(7) Attach a TD F 71-01.7 (Top Secret Document Record) to the first
page or cover of each copy of Top Secret information. The Top Secret
Document Record shall be completed by the Top Secret Control Officer and
shall serve as a permanent record.
(8) Ensure that all persons having access to Top Secret information
sign the Top Secret Document Record. This also includes persons to whom
oral disclosure of the contents is made.
(9) Maintain receipts concerning the transfer and destruction of Top
Secret information. Record all such actions on the Top Secret Document
Record which shall be retained for a minimum of three years.
(10) As received, number in sequence each Top Secret document in a
calendar year series (e.g. TS 89-001). This number shall be posted on
the face of the document and on all forms required for control of Top
Secret information.
(11) Attach a properly executed TD F 71-01.5 (Classified Document
Record of Transmittal) when a Top Secret document is transmitted
internally or externally.
(12) Verify, prior to releasing Top Secret information, that the
recipient has both a security clearance and is authorized access to such
information.
(13) Report, in writing, all Top Secret documents unaccounted for to
the Assistant Secretary (Management) who shall take appropriate action
in conjunction with the Departmental Director of Security.
(14) Assure that no individual within his or her office or bureau
transmits Top Secret information to another individual or office without
the knowledge and consent of the Top Secret Control Officer.
(15) Ensure upon receipt that a Standard Form 703 (Top Secret Cover
Sheet) is affixed to such information.
(16) Notify office and/or bureau employees annually in writing of
the designated control point for all incoming and outgoing Top Secret
information.
(17) Be notified as to the transmission, per Sec. 2.28(b), whenever
Top Secret information is sent outside of a Treasury bureau or office
within the Departmental Offices.
(b) Top Secret Control Officer Listings. In order for the
Departmental Director of Security to maintain a current listing of Top
Secret Control Officers within the Department, each Treasury bureau and
the Departmental Offices shall annually report each October 15th in
writing to the Departmental Office of Security, the identities of the
office(s) and names of the officials designated as their primary and
alternate Top Secret Control Officers. Any changes in these designations
shall be reported to the Departmental Director of Security within thirty
days.
(c) Top Secret Document Record. Upon receipt in the Department a
green, color coded, TD F 71-01.7 (Top Secret Document Record) shall be
attached by the Top Secret Control Officer to the first page or cover of
the original and each copy of Top Secret information.

[[Page 97]]

The Top Secret Document Record shall remain attached to the Top Secret
information until it is either transferred to another United States
Government agency, downgraded, declassified or destroyed. The Top Secret
Document Record, which shall initially be completed by the Top Secret
Control Officer, shall identify the Top Secret information attached, and
shall serve as a permanent record of the information. All persons,
including stenographic and clerical personnel, having access to the
information attached to the Top Secret Document Record must list their
name and the date on the TD F 71-01.7 prior to accepting responsibility
for its custody. The TD F 71-01.7 shall also indicate those individuals
to whom only oral disclosure of the contents is made. Whenever any Top
Secret information is transferred to another United States Government
agency, downgraded, declassified or destroyed, the Top Secret Control
Officer shall record the action on the Top Secret Document Record and
retain it for a minimum or three years after which time it may be
destroyed. In order to maintain the integrity of the color coding
process the photocopying and use of non-color coded Top Secret Document
Record forms is prohibited.
(d) Classified Document Record of Transmittal. TD F 71-01.5
(Classified Document Record of Transmittal) shall be the exclusive
classified document accountability record for use within the Department
of the Treasury. No other logs or records shall be required except for
the use of TD F 71-01.7 which is applicable to Top Secret information.
TD F 71-01.5 shall be used for single or multiple document receipting
and for internal and external routing. The inclusion of classified
information on TD F 71-01.5 is to be avoided. In the event the subject
title is classified, a recognizable short title shall be used, e.g.,
first letter of each word in the subject title. Several items may be
transmitted to the same addressee with one TD F 71-01.5. TD F's 71-01.5
shall be maintained for a three year period after which the form may be
destroyed. No record of the actual destruction of the TD F 71-01.5 is
necessary.
(1) Top Secret Information. Top Secret information shall be subject
to a continuous receipt system regardless of how brief the period of
custody. TD F 71-01.5 shall be used for this purpose. Top Secret
accountability records shall be maintained by Top Secret Control
Officers separately from the accountability records of other classified
information.
(2) Secret Information. Receipt on TD F 71-01.5 shall be required
for transmission of Secret information between bureaus, offices and
separate agencies. Responsible office heads shall determine
administrative procedures required for the internal control within their
respective offices. The volume of classified information handled and
personnel resources available must be considered in determining the
level of adequate security measures while at the same time maintaining
operational efficiency.
(3) Confidential and Limited Official Use Information. Receipts for
Confidential and Limited Official Use information shall not be required
unless the originator indicates that receipting is necessary.

[55 FR 1644, Jan. 17, 1990; 55 FR 13134, Apr. 9, 1990]

Sec. 2.27 Storage [4.1(b)].

Classified information shall be stored only in facilities or under
conditions designed to prevent unauthorized persons from gaining access
to it.
(a) Minimum Requirements for Physical Barriers--(1) Top Secret. Top
Secret information shall be stored in a GSA-approved security container
with an approved, built-in, three-position, dial-type, changeable,
combination lock; in a vault protected by an alarm system and response
force; or in other types of storage facilities that meet the standards
for Top Secret information established under the provisions of
Sec. 2.25. Top Secret information stored outside the United States must
be in a facility afforded diplomatic status. One or more of the
following supplementary controls is required:
(i) The area that houses the security container or vault shall be
subject to the continuous protection of U.S. guard or duty personnel;
(ii) U.S. Guard or duty personnel shall inspect the security
container or vault at least once every two hours; or

[[Page 98]]

(iii) The security container or vault shall be controlled by an
alarm system to which a force will respond in person within 15 minutes.

Within the United States, the designated security officer in each
Treasury bureau and the Department Offices shall prescribe those
supplementary controls deemed necessary to restrict unauthorized access
to areas in which such information is stored. Any vault used for the
storage of sensitive compartmented information shall be configured to
the specifications of the Director of Central Intelligence. Prior to an
office or bureau operating such a vault, formal written certification
for its use must first be obtained from the Special Assistant to the
Secretary (National Security) as the senior Treasury official of the
Intelligence Community.
(2) Secret and Confidential. Secret and Confidential information
shall be stored in a manner and under the conditions prescribed for Top
Secret information, or in a container, vault, or alarmed area that meets
the standards for Secret or Confidential information established under
the provisions of Sec. 2.25. Secret and Confidential information may
also be stored in a safe-type filing cabinet having a built-in, three-
position, dial-type, changeable, combination lock, and may continue to
be stored in a steel filing cabinet equipped with a steel lock-bar
secured by a GSA-approved three-position, dial-type, changeable,
combination padlock. The modification, however, of steel filing cabinets
to barlock-type as storage equipment for classified information and
material is prohibited and efforts are to be made to selectively phase
out the use of such barlock cabinets for storage of Secret information.
Exceptions may be authorized only by the Departmental Director of
Security upon written request from the designated bureau security
officer. The designated security officer in each Treasury bureau and the
Departmental Offices shall prescribe those supplementary controls deemed
necessary to restrict unauthorized access to areas in which such
information is stored. Access to bulky Secret and Confidential material
in weapons storage areas, strong rooms, evidence vaults, closed areas or
similar facilities shall be controlled in accordance with requirements
approved by the Department. At a minimum, such requirements shall
prescribe the use of GSA-approved, key-operated, high-security padlocks.
For Secret and Confidential information stored outside the United
States, it shall be stored in the manner authorized for Top Secret, in a
GSA-approved safe file, or in a barlick cabinet equipped with a
security-approved combination padlock if the cabinet is located in a
security-approved vault and/or in a restricted area to which access is
controlled by United States citizen personnel on a 24-hour basis.
(b) Combinations--(1) Equipment in Service. Combinations to dial-
type, changeable, combination locks shall be changed only by persons
having an appropriate security clearance, and shall be changed,
(i) Whenever such equipment is placed in use;
(ii) Whenever a person knowing the combination no longer requires
access to it;
(iii) Whenever a combination has been subjected to possible
compromise;
(iv) Whenever the equipment is taken out of service: or
(v) At least once each year.

Knowledge of combinations shall be limited to the minimum number of
persons necessary for operating purposes. Records of combinations shall
be classified no lower than the highest level of classified information
that is protected by the combination lock. When securing a combination
lock, the dial must be turned at least four (4) complete times in the
same direction after closing. Defects in or malfunctioning of storage
equipment protecting classified national security or officially limited
information must be reported immediately to the designated office or
bureau security official for appropriate action.
(2) Equipment Out of Service. When security equipment, used for the
storage of classified national security or officially limited
information, is taken out of service, it shall be physically inspected
to ensure that no classified information or officialy limited
information remains therein. Built-in, three-position, dial-type,
changeable, combination locks shall be reset to the

[[Page 99]]

standard combination 50-25-50 and combination padlocks shall be reset to
the standard combination 10-20-30. The designated security officer in
each Treasury bureau and the Departmental Offices shall prescribe such
supplementary controls deemed necessary to fulfill their individual
needs to be consistent with Sec. 2.27.
(3) Security Container Check Sheet. Each piece of security equipment
used for the storage of classified information will have attached
conspicuously to the outside a Standard Form 702 (Security Container
Check Sheet) on which an authorized person will record the date and
actual time each business day that they initially unlock and finally
lock the security equipment, followed by their initials. Users of this
form are to avoid citations which reflect the opening, locking and
checking of the security equipment at standardized (non-actual) times,
e.g., opened at 8:00 a.m. and closed/checked at 4:00 p.m. Bureaus and
the Departmental Offices may continue to use Optional Form 62 (Safe or
Cabinet Security Record) in lieu of the SF 702 until September 30, 1990,
or such time as their supplies of Optional Form 62 are exhausted. The
reprinting or photostatic reproduction and use of Optional Form 62 is
not authorized. On each normal workday, regardless of whether the
security equipment was opened on that particular day, the security
equipment shall be checked by authorized personnel to assure that no
surreptitious attempt has been made to penetrate the security equipment.
Such examinations normally consist of a quick or casual visual check to
note either any obvious marks or gashes, or defects or malfunction of
the security equipment which are different from their prior observations
or experience in operating the equipment concerned. Any such
discrepancies in the appearance of or functioning of the security
equipment, based upon this visual check, should be reported to
appropriate security officials. The ``Checked By'' column of the SF 702
or Optional Form 62 shall be annotated to reflect the date and time of
this action followed by that person's initials. Security equipment used
for the storage of classified information that has been opened on a
particular day shall not be left unattended at the end of that day until
it has been locked by an authorized person and checked by a second
person. In the event a second person is not available within the office,
the individual who locked the equipment shall also annotate the
``Checked By'' column of the SF 702 or Optional Form 62. Reversible
``OPEN-CLOSED'' or ``LOCKED-UNLOCKED'' signs, available through normal
supply channels, shall also be used on such security equipment. The
respective side of the sign shall be displayed to indicate when the
container is open or closed. Except for the SF 702 or Optional Form 62,
the top surface area of security equipment is not to be used for storage
and must be kept free of extraneous material. SF 702 and/or Optional
Form 62 shall be utilized on all security equipment used for storing
information bearing the control legend ``Limited Official Use''. The
designated security officer in each Treasury bureau and the Department
Offices may, as warranted, prescribe supplementary use of the SF 702 or
Optional Form 62 to apply to other authorized legends approved by the
Department for officially limited information.
(4) Safe Combination Records. Combinations to security equipment
containing classified information shall be recorded on Standard Form 700
(Security Container Information), national stock number 7540-01-214-
5372. Bureaus and the Departmental Offices may continue to use Treasury
Form 4032 (Security Container Information) in lieu of the SF 700 until
September 30, 1990, or such time as their supplies of Treasury Form 4032
are exhausted. The reprinting of Treasury Form 4032 is not authorized.
Each part of the SF 700 shall be completed in its entirety. The names,
addresses and home telephone numbers of personnel responsible for the
combination, and the classified information stored therein, must be
indicated on part 1 of the SF 700. The completed part 1 shall be posted
in the front interior of the top, control or locking drawer of the
security equipment concerned. Part 2 shall be inserted in the envelop
(part 2A) provided, and forwarded via appropriate secure means to the
designated bureau

[[Page 100]]

or Departmental Offices central repository for security combinations.
Part 2 shall have the highest level of classified information, stored in
the security equipment concerned, annotated in both the top and bottom
border areas of the completed SF 700. Part 2A shall have the highest
level of classified information, stored in the security equipment
concerned, annotated in the blank space immediately above the word,
``WARNING'' which appears on the SF 700. The completion of the SF 700 or
Treasury Form 4032 does not constitute a classification action but
serves as an administrative requirement to ensure the protection of
classified information stored in such security equipment. SF 700 shall
be utilized on all security equipment used for storing information
bearing the control legend ``Limited Official Use''. The designated
security officer in each Treasury bureau and the Departmental Offices
may prescribe supplementary use of the SF 700 to apply to other
authorized legends approved by the Department for officially limited
information, as warranted.
(c) Keys. The designated security officer in each Treasury bureau
and the Departmental Offices shall establish administrative procedures
for the control and accountability of keys and locks whenever key-
operated, high-security padlocks are utilized. The level of protection
provided such keys shall be equivalent to that afforded the information
being protected by the padlock.
(d) Classified Document Cover Sheets. Classified document cover
sheets alert personnel that documents or folders are classified and
require protection from unauthorized scrutiny. Individuals who prepare
or package classified documents are responsible for affixing the
appropriate document cover sheet. Orange Standard Form 703 (Top Secret
Cover Sheet), red SF 704 (Secret Cover Sheet) and blue SF 706
(Confidential Cover Sheet) are the only authorized cover sheets for
collateral classified information. The national stock numbers of these
cover sheets are as follows: SF 703, 7540-01-213-7901; SF 704, 7540-01-
213-7902; and SF 705, 7540-01-213-7903. In order to maintain the
integrity of the color coding process the photocopying and use of non-
color coded classified document cover sheets is prohibited. Bureaus and
offices shall maintain a supply of classified document cover sheets
appropriate for their needs. Classified document cover sheets are
designed to be reused and will be removed before classified information
is filed to conserve filing space and prior to the destruction of
classified information. Document cover sheets are to be used to shield
classified documents while in use and particularly when the transmission
is made internally within a headquarters by courier, messenger or by
personal contact. File folders containing classified information should
be otherwise marked, e.g., at the top and bottom of the front and back
covers, to indicate the overall classification of the contents rather
than permanently affixing the respective classified document cover
sheet. Treasury Directive 71-02 provides for the use of a green cover
sheet, TD F 71-01.6 (Limited Official Use Document Cover Sheet) for
information bearing the control legend ``Limited Official Use''. Bureaus
or offices electing to create and use other cover sheets for officially
limited information must obtain prior written approval from the
Departmental Director of Security.
(e) Activity Security Checklist. Standard Form 701 (Activity
Security Checklist) provides a systematic means to make a thorough end-
of-day security inspection for a particular work area and to allow for
employee accountability in the event that irregularities are discovered.
Bureaus and the Departmental Offices may include additional information
on the SF 701 to suit their unique needs. The SF 701, available through
normal supply channels has a national stock number of 7540-01-213-7900.
It shall be the only form used in situations that call for use of an
activity security checklist. Completion, storage and disposition of SF
701 will be determined by each bureau and the Departmental Offices.

Sec. 2.28 Transmittal [4.1(b)].

(a) Preparation. Classified information to be transmitted outside of
a Treasury facility shall be enclosed in opaque inner and outer covers.
The inner cover shall be a sealed wrapper or

[[Page 101]]

envelope plainly marked with the assigned security classification and
addresses of both sender and addressee. The outer cover shall be sealed
and addressed with no identification of the classification of its
contents. Whenever classified material is to be transmitted and the size
of the material is not suitable for use of envelopes or similar
wrappings, it shall be enclosed in two opaque sealed containers, such as
boxes or heavy wrappings. Material used for packaging such bulk
classified information shall be of sufficient strength and durability as
to provide security protection while in transit, to prevent items from
breaking out of the container, and to facilitate detection of any
tampering therewith.
(b) Receipting. A receipt, Treasury Department Form 71-01.5
(Classified Document Record of Transmittal), shall be enclosed in the
inner cover, except that Confidential and Limited Official Use
information shall require a receipt only if the sender deems it
necessary. The receipt shall identify the sender, addressee and describe
the document, but shall contain no classified information. It shall be
immediately signed by the recipient and returned to the sender. Within a
Treasury facility, such information may be transmitted between offices
by direct contact of the officials concerned in a single sealed opaque
envelope with no security classification category being shown on the
outside of the envelope. Classified information shall never be delivered
to unoccupied offices or rooms. Senders of classified information should
maintain appropriate records of outstanding receipts for which return of
the original signed copy is still pending. TD F's 71-01.5 shall be
maintained for a three year period after which they may be destroyed. No
record of the actual destruction of the TD F 71-01.5 is required.
(c) Transmittal of Top Secret. The transmittal of Top Secret
information outside of a Treasury facility shall be by specifically
designated personnel, by State Department diplomatic pouch, by a
messenger-courier system authorized for that purpose, e.g., Defense
Courier Service, or over authorized secure communications circuits. Top
Secret information may not be sent via registered mail.
(d) Transmittal of Secret. The transmittal of Secret information
shall be effected in the following manner:
(1) The 50 States, District of Columbia and Puerto Rico. Secret
information may be transmitted within and between the 50 States, the
District of Columbia, and the Commonwealth of Puerto Rico by one of the
means authorized for Top Secret information, by the United States Postal
Service registered mail or express mail service; or by protective
services provided by United States air or surface commercial carriers
under such conditions as may be prescribed by the Departmental Director
of Security. United States Postal Service express mail service shall be
used only when it is the most effective means to accomplish a mission
within security, time, cost and accountability constraints. To ensure
direct delivery to the addressee, the ``Waiver of Signature and
Indemnity'' block on the United States Postal Service Express Mail Label
11-B may not be executed under any circumstances. All Secret express
mail shipments are to be processed through mail distribution centers or
delivered directly to a United States Postal Service facility or
representative. The use of external (street side) express mail
collection boxes is prohibited. Only the express mail services of the
United States Postal Service are authorized.
(2) Other Areas. Secret information may be transmitted from, to, or
within areas other than those specified in Sec. 2.28(d)(1) by one of the
means established for Top Secret information, or by United States
registered mail through Military Postal Service facilities provided that
the information does not at any time pass out of United States citizen
control and does not pass through a foreign postal system. Transmittal
outside such areas may also be accomplished under escort of
appropriately cleared personnel aboard United States Government owned
and United States Government contract vehicles or aircraft, ships of the
United States Navy, civil service manned United States Naval ships, and
ships of United States Registry. Operators of

[[Page 102]]

vehicles, captains or masters of vessels, and pilots of aircraft who are
United States citizens, and who are appropriately cleared, may be
designated as escorts. Secret information may not be sent via certified
mail.
(e) Transmittal of Confidential and Limited Official Use
Information. Confidential and Limited Official Use information shall be
transmitted within and between the 50 States, the District of Columbia,
the Commonwealth of Puerto Rico, and United States territories or
possessions by one of the means established for higher classifications,
or by the United States Postal Service registered mail. Outside these
areas, confidential and Limited Official Use information shall be
transmitted only as is authorized for higher classifications.
Confidential and Limited Official Use information may not be sent via
certified mail.
(f) Hand Carrying of Classified Information in Travel Status--(1)
General Provisions. Personnel in travel status shall physically
transport classified information across international boundaries only
when absolutely essential. Whenever possible, and when time permits, the
most desirable way to transmit classified information to the location
being visited is by other authorized means identified in Sec. 2.28 (c),
(d) and (e). The physical transportation of classified information on
non-United States flag aircraft should be avoided if possible. Treaury
Directive 71-03, ``Screening of Airline Passengers Carrying Classified
Information or Material'' provides specifics on the requirements for
transporting classified information.
(2) Specific Safeguards. If it is determined that the transportation
of classified information by an individual in travel status is in the
best interest of the United States Government, the following specific
safeguards shall be fulfilled:
(i) Classified information shall be in the physical possession of
the individual and shall have adequate safeguards at all times if proper
storage at a United States Government facility is not available. Under
no circumstances shall classified information be stored in a hotel safe
or room, locked in automobiles, private residences, train compartments,
or any vehicular detachable storage compartments.
(ii) An inventory of all Top Secret classified information,
including teletype messages, shall be made prior to departure and a copy
of same shall be retained by the traveller's office until the
traveller's return at which time all Top Secret classified information
shall be accounted for. These same procedures are recommended for
information classified Secret, Confidential or Limited Official Use.
(iii) Classified information shall never be displayed or used in any
manner in public conveyances or rooms. First class or business travel is
not authorized when the justification for commercially available
transportation is based on the need for reviewing classified materials
while enroute. Travelers are responsible for reviewing and familiarizing
themselves with required classified materials, under appropriately
secure circumstances, in advance of their travel and not during such
travel.
(iv) In order to avoid unnecessary delays in the screening process
prior to boarding commercial air carriers, the traveler shall have in
his or her possession written authorization, on Treasury or bureau
letterhead, to transport classified information and either an
identification card or credential bearing both a photograph and
descriptive data. Courier authorizations shall be signed by an
appropriate security representative authorized to direct official
travel. This courier authorization, along with official travel orders,
shall, in most instances, permit the individual to exempt the classified
information from inspection. If difficulty is encountered, the traveler
should tactfully refuse to exhibit or disclose the classified
information to inspection and should insist on the assistance of the
local United States diplomatic representative at the port of entry or
departure.
(v) Upon completion of the visit, the traveler shall have the
information returned to his or her office by approved means. All Top
Secret and Secret classified information, including teletype messages
transported for the purpose of the visit shall be accounted for. It is
highly recommended that Confidential

[[Page 103]]

and Limited Official Use information also be accounted for. If any Top
Secret or Secret classified items are left with the office being visited
for its retention and use, the individual shall obtain a receipt.

[55 FR 1644, Jan. 17, 1990, as amended at 55 FR 50321, Dec. 6, 1990]

Sec. 2.29 Telecommunications and computer transmissions.

Classified information shall not be communicated by
telecommunications or computer transmissions except as may be authorized
with respect to the transmission of classified information over
authorized secure communications circuits or systems.

Sec. 2.30 Special access programs [1.2(a) and 4.2(a)].

Only the Secretary of the Treasury may create or continue a special
access program if:
(a) Normal management and safeguarding procedures do not limit
access sufficiently; and
(b) The number of persons with access is limited to the minimum
necessary to meet the objective of providing extra protection for the
information.

Sec. 2.31 Reproduction controls [4.1(b)].

(a) Top Secret documents, except for the controlled initial
distribution of information processed or received electronically, shall
not be reproduced without the consent of the originator.
(b) Unless restricted by the originating agency, Secret,
Confidential and Limited Official Use documents may be reproduced to the
extent required by operational needs.
(c) Reproductions of classified documents shall be subject to the
same accountability and controls as the original documents.
(d) Paragraphs (a) and (b) of this section shall not restrict the
reproduction of documents to facilitate review for possible
declassification.

Sec. 2.32 Loss or possible compromise [4.1(b)].

(a) Report of Loss or Possible Compromise. Any Treasury employee who
has knowledge of the loss or possible compromise or classified
information shall immediately report the circumstances to their
designated office or bureau security officer who shall take appropriate
action to assess the degree of damage. In turn, the Departmental
Director of Security shall be immediately notified by the affected
office or bureau security officer of such reported loss or possible
compromise. The Departmental Director of Security shall also notify the
department or agency which originated the information and any other
interested department or agency so that a damage assessment may be
conducted and appropriate measures taken to negate or minimize any
adverse effect of the loss or possible compromise. Compromises may occur
through espionage, unauthorized disclosures to the press or other
members of the public, publication of books and treatises, the known
loss of classified information or equipment to foreign powers, or
through various other circumstances.
(b) Inquiry. The Departmental Director of Security shall notify the
Assistant Secretary (Management) who shall then direct an immediate
inquiry to be conducted for the purpose of taking corrective measures
and assessing damages. Based on the results of this inquiry, it may be
deemed appropriate to notify the Inspector General who shall determine
whether the Office of the Inspector General or a Treasury bureau will
conduct any additional investigation. Upon completion of the
investigation by the Inspector General, the Inspector General shall
recommend to the Assistant Secretary (Management) and concurrently to
the Departmental Director of Security, the appropriate administrative,
disciplinary, or legal action to be taken based upon jurisdictional
authority of the Treasury components involved.
(c) Content of Damage Assessments. At a minimum, damage assessments
shall be in writing and contain the following:
(1) Identification of the source, date and circumstances of the
compromise.
(2) Classification and description of the specific information which
has been lost.

[[Page 104]]

(3) An analysis and statement of the known or probable damage to the
national security that has resulted or may result.
(4) An assessment of the possible advantage to foreign powers
resulting from the compromise.
(5) An assessment of whether,
(i) The classification of the information involved should be
continued without change;
(ii) The specific information, or parts thereof, shall be modified
to minimize or nullify the effects of the reported compromise and the
classification retained;
(iii) Downgrading, declassification, or upgrading is warranted, and
if so, confirmation of prompt notification to holders of any change, and
(6) An assessment of whether countermeasures are appropriate and
feasible to negate or minimize the effect of the compromise.
(d) System for Control of Damage Assessments. Each Treasury bureau
and the Departmental Offices shall establish a system of control and
internal procedures to ensure that damage assessments are performed in
all cases described in Sec. 2.32(a) and that records are maintained in a
manner that facilitates their retrieval and use within the Department.
(e) Cases Involving More Than One Agency. (1) Whenever a compromise
involves the classified information or interests of more than one
agency, the Departmental Director of Security shall advise the other
affected agencies of the circumstances and findings that affect their
information or interests. Whenever a damage assessment, incorporating
the product of two or more agencies is needed, the affected agencies
shall agree upon the assignment of responsibility for the assessment and
Treasury components will provide all data pertinent to the compromise to
the agency responsible for conducting the assessment.
(2) Whenever a compromise of United States classified information is
the result of actions taken by foreign nationals, by foreign government
officials, or by United States nationals in the employ of international
organizations, the agency performing the damage assessment shall
endeavor to ensure through appropriate intergovernmental liaison
channels, that information pertinent to the assessment is obtained.
Whenever more than one agency is responsible for the assessment, those
agencies shall coordinate the request prior to transmittal through
appropriate channels.
(3) Whenever an action is contemplated against any person believed
responsible for the loss or compromise of classified information, damage
assessments shall be coordinated with appropriate legal counsel.
Whenever a violation of criminal law appears to have occured and a
criminal prosecution is contemplated, coordination shall be made with
the Department of Justice.
(4) The designated representative of the Director of Central
Intelligence, or other appropriate officials with responsibility for the
information involved, will be consulted whenever a compromise of
sensitive compartmented information has occurred.

Sec. 2.33 Responsibilities of holders [4.1(b)].

Any person having access to and possession of classified information
is responsible for protecting it from persons not authorized access,
i.e., persons who do not possess an appropriate security clearance, and
who do not possess the required need-to-know. This includes keeping
classified documents under constant observation and turned face-down or
covered when not in use and securing such information in approved
security equipment or facilities whenever it is not under the direct
supervision of authorized persons. In all instances, such protective
means must meet accountability requirements prescribed by the
Department.

Sec. 2.34 Inspections [4.1(b)].

Individuals charged with the custody of classified information shall
conduct the necessary inspections within their areas to ensure adherence
to procedural safeguards prescribed to protect classified information.
Security officers shall ensure that periodic inspections are made to
determine whether procedural safeguards prescribed by this regulation
and any bureau implementing regulation are in effect at all

[[Page 105]]

times. At a minimum such checks shall ensure that all classified
information is stored in approved security containers, including
removable storage media, e.g., floppy disks used by word processors that
contain classified information; burn bags, if utilized, are either
stored in approved security containers or destroyed; and classified
shorthand notes, carbon paper, carbon and plastic typewriter ribbons,
rough drafts and similar papers have been properly stored or destroyed.

Sec. 2.35 Security violations.

Any individual, at any level of employment, determined to have been
responsible for the unauthorized release or disclosure or potential
release or disclosure of classified national security information,
whether it be knowingly, willfully or through negligence, shall be
notified on TD F 71-21.1 (Record of Security Violation) that his or her
action is in violation of this regulation, the Order, the Directive, and
Executive Order 10450, as amended. Treasury Directive 71-04, entitled,
``Administration of Security Violations'' sets forth provisions
concerning security violations which shall apply to each Treasury
employee and persons under contract or subcontract to the Department
authorized access to Treasury classified national security information.
(a) Repeated abuse of the classification process, either by
unnecessary or over-classification, or repeated failure, neglect or
disregard of established requirements for safeguarding classified
information by any employee shall be grounds for appropriate adverse or
disciplinary action. Such actions may include, but are not necessarily
limited to, a letter of warning, a letter of reprimand, suspension
without pay, or dismissal, as appropriate in the particular case, under
applicable personnel rules, regulations and procedures. Where a
violation of criminal statutes may be involved, any such case shall be
promptly referred to the Department of Justice.
(b) After an affirmative adjudication of a security violation, and
as the occasion demands, reports of accountable security violations
shall be placed in the employee's personnel security file, and as
appropriate, in the employee's official personnel folder. The security
official of the office or bureau concerned shall recommend to the
respective management official or bureau head that disciplinary action
be taken when such action is indicated.

Sec. 2.36 Disposition and destruction [4.1(b)].

Classified information no longer needed in current working files or
for reference or record purposes shall be processed for appropriate
disposition in accordance with the provisions of Title 44, United States
Code, Chapters 21 and 33, which govern disposition of Federal records.
Classified information approved for destruction shall be destroyed by
either burning, melting, chemical decomposition, pulping, mulching,
pulverizing, cross-cut shredding or other mutilation in the presence of
appropriately cleared and authorized persons. The method of destruction
must preclude recognition or reconstruction of the classified
information. The residue from cross-cut shredding of Top Secret, Secret,
and Confidential classified, non-Communications Security (COMSEC),
information contained in paper media may not exceed \3/32\&lt;gr-thn-eq&gt; by
\1/2\&lt;gr-thn-eq&gt; with a \1/64\&lt;gr-thn-eq&gt; tolerance.
(a) Diskettes or Floppy Disks. Diskettes or floppy disks containing
information or data classified up to and including Top Secret may be
destroyed by the use of an approved degausser, burning, pulverizing, and
chemical decomposition, or by first reformatting or reinitializing the
diskette then physically removing the magnetic disk from its protective
sleeve and using an approved cross-cut shredder to destroy the magnetic
media. Care must be exercised to ensure that the destruction of magnetic
disks does not damage the cross-cut shredder. The residue from such
destruction, however, may not exceed \1/32\&lt;gr-thn-eq&gt; by \1/
2\&lt;gr-thn-eq&gt; with a \1/64\&lt;gr-thn-eq&gt; tolerance. The destruction of
classified COMSEC information on diskettes or floppy disks may only be
effected by burning followed by crushing of the ash residue.
(b) Hard Disks. Hard disks, including removable hard disks, disk
packs, drums or single disk platters that contain classified information
must first

[[Page 106]]

be degaussed prior to physical destruction. The media must be destroyed
by incineration, chemical decomposition or the entire magnetic disk
pack, drum, or platter recording surface must be obliterated by use of
an emery wheel or disk sander.
(c) Approval of Use of Mulching and Cross-cut Shredding Equipment.
Prior to obtaining mulching or cross-cut shredding equipment, the
Departmental Director of Security shall approve the use of such
equipment.
(d) Use of Burnbags. Any classified information to be destroyed by
burning shall be torn and placed in opaque containers, commonly
designated as burnbags, which shall be clearly and distinctly labeled
``BURN'' or ``CLASSIFIED WASTE''. Burnbags awaiting destruction are to
be protected by security safeguards commensurate with the classification
or control designation of the information involved.
(e) Records of Destruction. Appropriate accountability records shall
be maintained on TD F 71-01.17 (Classified Document Certificate of
Destruction) to reflect the destruction of all Top Secret and Secret
information. As deemed necessary by the originator, or as required by
special regulations, the TD F 71-01.17 shall be executed for the
destruction of information classified Confidential or marked Limited
Official Use. TD F's 71-01.17 shall be maintained for a three-year
period after which the form may be destroyed. No record of the actual
destruction of the TD F 71-01.17 is required.
(f) Destruction of non-record Classified Information. Non-record
classified information such as extra copies and duplicates, including
shorthand notes, preliminary drafts, used carbon paper and other
material of similar temporary nature, shall also be destroyed by
burning, mulching, or cross-cut shredding as soon as it has served its
purpose, but no records of such destruction need be maintained.

[55 FR 1644, Jan. 17, 1990; 55 FR 5118, Feb. 13, 1990]

Sec. 2.37 National Security Decision Directive 197.

National Security Decision Directive 197, Reporting Hostile Contacts
and Security Awareness, provides that United States Government employees
are responsible for reporting to their designated security officer:
(a) Any suspected or apparent attempt by persons, regardless of
nationality, to obtain unauthorized access to classified national
security information, sensitive or proprietary information or technology
and/or;
(b) Instances in which they feel they are being targeted for
possible exploitation. Contacts with representatives of designated
countries of concern identified in Sec. 2.43(f) which involve requests
for information which are not ordinarily provided in the course of an
employee's job, regular or daily activity, and/or which might possibly
lead to further requests for access to sensitive, proprietary or
classified information or technology, are to be reported to designated
security officers. Reports of such contacts are to be forwarded by the
designated security officer to the Departmental Director of Security for
appropriate action and coordination.

Subpart E--Implementation and Review

Sec. 2.38 Departmental management.

(a) The Assistant Secretary (Management) shall:
(1) Enforce the Order, the Directive and this regulation, and
establish, coordinate and maintain active training, orientation and
inspection programs for employees concerned with classified information.
(2) Review suggestions and complaints regarding the administration
of this regulation.
(b) Pursuant to Treasury Directive 71-08, ``Delegation of Authority
Concerning Physical Security Programs'', the Departmental Director of
Security shall:
(1) Review all bureau implementing regulations prior to publication
and shall require any regulation to be changed, if it is not consistent
with the Order, the Directive or this regulation.
(2) Have the authority to conduct on-site reviews of bureau physical
security programs and information security programs as they pertain to
each Treasury bureau and to require such

[[Page 107]]

reports, information and assistance as may be necessary, and
(3) Serve as the principal advisor to the Assistant Secretary
(Management) with respect to Treasury physical and information security
programs.

Sec. 2.39 Bureau administration.

Each Treasury bureau and the Departmental Offices shall designate,
in writing to the Departmental Director of Security, an officer or
official to direct, coordinate and administer its physical security and
information security programs which shall include active oversight to
ensure effective implementation of the Order, the Directive, this
regulation. Bureaus and the Departmental Offices shall revise their
existing implementing regulation on national security information to
ensure conformance with this regulation. Time frames for bureau and
Departmental Offices implementation shall be established by the
Departmental Director of Security.

Sec. 2.40 Emergency planning [4.1(b)].

Each Treasury bureau and the Departmental Offices shall develop
plans for the protection, removal, or destruction of classified
information in case of fire, natural disaster, civil disturbance, or
possible enemy action. These plans shall include the disposition of
classified information located in foreign countries.

Sec. 2.41 Emergency authority [4.1(b)].

The Secretary of the Treasury may prescribe by regulation special
provisions for the dissemination, transmittal, destruction, and
safeguarding of national security information during combat or other
emergency situations which pose an imminent threat to national security
information.

Sec. 2.42 Security education [5.3(a)].

Each Treasury bureau that creates, processes or handles national
secutity information, including the Departmental Offices, is required to
establish a security education program. The program shall be sufficient
to familiarize all necessary personnel with the provisions of the Order,
the Directive, this regulation and any other implementing directives and
regulations to impress upon them their individual security
responsibilities. The program shall also provide for initial, refresher,
and termination briefings.
(a) Briefing of Employees. All new employees concerned with
classified information shall be afforded a security briefing regarding
the Order, the Directive and this regulation and sign a security
agreement as required in Sec. 2.22(c). Employees concerned with
sensitive compartmented information shall be required to read and also
sign a security agreement. Copies of applicable laws and pertinent
security regulations setting forth the procedures for the protection and
disclosure of classified information shall be available for all new
employees afforded a security briefing. All employees given a security
briefing shall be required to sign a TD F 71-01.16 (Physical Security
Orientation Acknowledgment) which shall be maintained on file as
determined by respective office or bureau security officials.
(b) [Reserved]

Subpart F--General Provisions

Sec. 2.43 Definitions [6.1].

(a) Authorized Person. Those individuals who have a ``need-to-know''
the classified information involved and have been cleared for the
receipt of such information. Responsibility for determining whether
individuals' duties require that they possess, or have access to, any
classified information and whether they are authorized to receive it
rests on the individual who has possession, knowledge, or control of the
information involved, and not on the prospective recipients.
(b) Compromise. The loss of security enabling unauthorized access to
classified information. Affected information or material is not
automatically declassified.
(c) Confidential Source. Any individual or organization that has
provided, or that may reasonably be expected to provide, information to
the United States on matters pertaining to the national security with
the expectation, expressed or implied, that the information or
relationship, or both, be held in confidence.

[[Page 108]]

(d) Declassification. The determination that particular classified
information no longer requires protection against unauthorized
disclosure in the interest of national security. Such determination
shall be by specific action or occur automatically after the lapse of a
requisite period of time or the occurrence of a specified event. If such
determination is by specific action, the information or material shall
be so marked with the new designation.
(e) Derivative Classification. A determination that information is,
in substance, the same as informaiton that is currently classified and a
designation of the level of classification.
(f) Designated Countries of Concern. For purposes of National
Security Decision Directive 197 reporting: Afghanistan, Albania, Angola,
Bulgaria, Cambodia (Kampuchea), the People's Republic of China
(Communist China), Cuba, Czechoslovakia, Ethiopia, East Germany (German
Democratic Republic including the Soviet sector of Berlin), Hungary,
Iran, Iraq, Laos, Libya, Mongolian People's Republic (Outer Mongolia),
Nicaragua, North Korea, Palestine Liberation Organization, Poland,
Romania, South Africa, South Yemen, Syria, Taiwan, Union of Soviet
Socialist Republics (Russia), Vietnam and Yugoslavia.
(g) Document. Any recorded information regardless of its physical
form or characteristics, including, without limitation, written or
printed material; data processing cards and tapes; maps, charts;
painting; drawings; engravings; sketches; working notes and papers;
reproductions of such things by any means or process; and sound, voice,
or electronic recordings in any form.
(h) Foreign Government Information. (1) Information provided by a
foreign government or governments, an international organization of
governments, or any elements thereof with the expectation, expressed or
implied, that the information, the source of the information, or both,
are to be held in confidence; or
(2) Information produced by the United States Government pursuant to
or as a result of a joint arrangement with a foreign government or
governments or an international organization of governments, or any
element thereof, requiring that the information, the arrangement, or
both, are to be held in confidence.
(i) Information. Any data or material, regardless of its physical
form or characteristics, that is owned by, produced by or for, or is
under the control of the United States Government.
(j) Information Security. The administrative policies and procedures
for identifying, controlling, and safeguarding from unauthorized
disclosure, information the protection of which is authorized by
Executive Order or statute.
(k) Intelligence Activity. An activity that an agency within the
Intelligence Community is authorized to conduct pursuant to Executive
Order 12333.
(l) Intelligence Sources and Methods. A person, organization, or
technical means or method which provides foreign intelligence or foreign
counterintelligence to the United States and which, if its identity or
capability is disclosed, is vulnerable to counteraction that could
nullify or significantly reduce its effectiveness in providing foreign
intelligence or foreign counterintelligence to the United States. An
intelligence source also means a person or organization which provides
foreign intelligence or foreign counterintelligence to the United States
only on the condition that its identity remains undisclosed.
Intelligence methods are that which, if disclosed, reasonably could lead
to the disclosure of an intelligence source or operation.
(m) Limited Official Use. The legend authorized for ``Officially
Limited Information'' which provides that it be handled, safeguarded and
stored in a manner equivalent to national security information
classified Confidential.
(n) Multiple Classified Sources. The term used to indicate that a
document is derivatively classified when it contains classified
information derived from other than one source.
(o) National Security. The national defense or foreign relations of
the United States.
(p) National Security Information. Information that has been
determined

[[Page 109]]

pursuant to the Order or any predecessor Executive Order to require
protection against unauthorized disclosure and that is so designated.
(q) Need-to-Know. A determination made by the possessor of
classified information that a prospective recipient, in the interest of
national security, has a requirement for access to, knowledge of, or
possession of the classified information in order to perform tasks or
services essential to the fulfillment of particular work, including
performance on contracts for which such access is required.
(r) Officially Limited Information. Information which does not meet
the criterion that unauthorized disclosure would at least cause damage
to the national security under the Order or a predecessor Executive
Order, but which concerns important, delicate, sensitive or proprietary
information which is utilized in the development of Treasury policy.
This includes the enforcement of criminal and civil laws relating to
Treasury operations, the making of decisions on personnel matters and
the consideration of financial information provided in confidence.
(s) Original Classification. An initial determination that
information requires, in the interest of national security, protection
against unauthorized disclosure, together with a classification
designation signifying the level of protection required.
(t) Original Classification Authority. The authority vested in an
Executive Branch official to make an initial determination that
information requires protection against unauthorized disclosure in the
interest of national security.
(u) Originating Agency. The agency responsible for the initial
determination that particular information is classified.
(v) Portion. A segment of a document for purposes of expressing a
unified theme; ordinarily a paragraph.
(w) Sensitive Compartmented Information. Information and material
concerning or derived from intelligence sources, methods, or analytical
processes, that requires special controls for restricting handling
within compartmented intelligence systems established by the Director of
Central Intelligence and for which compartmentation is established.
(x) Special Access Program. Any program imposing ``need-to-know'' or
access controls beyond those normally provided for access to
Confidential, Secret, or Top Secret information. Such a program may
include, but is not limited to, special clearance, adjudication, or
investigative requirements, special designations of officials authorized
to determine ``need-to-know'' or special lists of persons determined to
have a ``need-to-know''.
(y) Special Activity. An activity conducted in support of national
foreign policy objectives abroad which is planned and executed so that
the role of the United States Government is not apparent or acknowledged
publicly, and functions in support of such activity, but which is not
intended to influence United States political processes, public opinion,
policies or media and does not include diplomatic activities or the
collection and production of intelligence or related support functions.
(z) Unauthorized Disclosure. A communication or physical transfer of
classified information to an unauthorized recipient. It includes the
unauthorized disclosure of classified information in a newspaper,
journal, or other publication where such information is traceable due to
a direct quotation or other uniquely identifiable fact.