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ISOO has received guidance from the White House National Security Council regarding reforms that should be made to the Interagency Security Classification Appeals Panel (ISCAP) Bylaws, Rules, and Appeals Procedures. The ISCAP hears appeals of mandatory declassification reviews conducted by agencies, as well reviewing agency declassification guides to ensure compliance with national policies. In a way, it acts as a "Supreme Court" for classification decisions that fall within the scope of its authorities, with its decisions appealable only to the President. The policy reforms aim to enable the ISCAP to operate more efficiently and effectively, ultimately declassifying and releasing more information to the American people that is in the public interest.

Statement of Need:

The Information Security Oversight Office (ISOO) of the National Archives and Records Administration (NARA), is revising the National Industrial Security Program (NISP) Directive.  The NISP safeguards classified information the Federal Government or foreign governments release to contractors, licensees, grantees, and certificate holders.  This revision adds provisions that would result  in fewer federal regulations, as they would enable DoD to rescind its regulation at 32 CFR 148 by incorporating some of its elements within 32 CFR 2004, eliminating unnecessary provisions, and recognizing many provisions are already codified in DoD's NISPOM.

It also:

Incorporates existing authorities regarding the sharing of insider threat information.

Clarifies conflicting guidance concerning private joint ventures with respect to the NISP.

Removes the requirement in many instances for costly and time-consuming national interest determinations (NIDs), which is an assessment conducted by the government when an entity is under foreign ownership, control, or influence, as such concerns are now accounted for in other government processes.

Updates program provisions concerning international programs security that were discussed during the 2018 revision process but not yet ready for finalization.

Clarifies definitions and other minor administrative edits.

Summary of the Legal Basis:

Executive Order 12829, as amended, "National Industrial Security Program" requires ISOO to develop and issue implementing directives as needed to implement the program. 32 CFR 2004 is the primary mechanism by which ISOO does so.

Alternatives:

None.

Anticipated Costs and Benefits:

Executive Order 12866 (Regulatory Planning and Review) directs agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity).  Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.  Executive Order 14094 (Modernizing Regulatory Review) amends section 3(f) of Executive Order 12866.

Risks:

The provisions seeking to be updated are woefully out of date, and until revised are contributing to unnecessary and duplicative costs both to the government and private industry for the implementation of the program.