CBP Withdraws Proposed Rule on Importer Record Sharing by Customs Brokers
U.S. Customs and Border Protection is withdrawing its October 2010 proposed rule that would have amended CBP regulations to state that customs brokers are allowed to disclose certain information regarding client (importer) records under certain conditions. CBP says the proposed rule received opposition from customs brokers, so CBP is withdrawing it effective March 26, for further consideration.
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The proposed amendment had stated that brokers, upon the client’s consent in a written authorization, could share client information with affiliated entities related to the broker so that these entities may offer non-customs business services to the broker’s clients. It had also stated that customs brokers could use a third-party to perform photocopying, scanning, and delivery of client records for the broker. (See ITT's Online Archives 10102714 for detailed summary of CBP's proposed rule.)
Brokers Opposed the Proposal, Said Rule Didn't Serve Importing Public
Although the proposed rule was prepared in response to a request from a member of the broker community, CBP said there was opposition to the proposal from brokers due to the conditions on sharing the information that CBP included to protect importers' proprietary information. Most commenters expressed concern that the proposed rule did not serve the interests of the importing public.
Therefore, CBP is withdrawing its proposed rule, pending further consideration of the relevant issues involved in the proposed rulemaking.
(Currently, 19 CFR 111.24 provides that with the exception of certain accredited officers or agents of the U.S. and the surety involved in a particular transaction, brokers may not disclose client information to third persons except when ordered to by a court.
CBP had proposed to revise 19 CFR 111.24 into a new paragraph (a) in order to provide for disclosure exceptions in new paragraphs (b) and (c), as follows:
(a) Client records are confidential, with exceptions. The business records of the clients serviced by the broker are considered confidential. Except as provided in paragraphs (b) and (c), the broker must not disclose the contents or any information connected with client records to any persons other than those clients, their surety on a particular entry, and the Field Director, Office of International Trade, Regulatory Audit, the CBP port director, the Immigration and Customs Enforcement agent, or other duly accredited officers or agents of the United States, except on subpoena by a court of competent jurisdiction.
(b) Disclosure to affiliated entity related to broker. Upon the client’s consent in a written authorization to share client information outside the brokerage, a broker may disclose only to an affiliated entity related to the broker, information specified in the written authorization pertaining to the customs business of that client so that the affiliated entity may offer non-customs business services to the broker’s client.
(c) Other third-party service providers. (1) Photocopying and scanning services. A broker may provide its clients’ records to a third-party service provider for photocopying and/or scanning without violating the prohibitions set forth in the provisions of this part pertaining to confidentiality, provided that:
(i) The broker exercises due diligence in accordance with 19 CFR 111.29(a)2 in the selection of the third-party service provider for photocopying and/or scanning by ensuring that its association with the third-party does not violate the provisions in 19 CFR 111.36(b)3; and
(ii) The broker enters into a non-disclosure agreement with the third-party service provider for photocopying and/or scanning that requires the third-party to keep the information contained in any records pertaining to the broker’s client confidential.
(2) Messenger services. A broker may provide its clients’ records to a third-party messenger service provider for transport and delivery without violating the prohibitions set forth in the provisions of this part pertaining to confidentiality, provided that the clients’ records are sealed in such a manner so that the third-party messenger service provider may not view, alter, or amend the documents to be delivered.
CBP had also noted that the written consent and the nondisclosure agreement would be subject to the recordkeeping requirements prescribed for brokers as set forth in 19 CFR 111.21(a), 111.23, and 111.25.)
(See ITT's Online Archives 11011117 for summary of the comments submitted to CBP by customs brokers, importers, express consignment operators, and sureties in response to the proposed rule.)
CBP Contact -- Anita Harris (202) 863-6069
(Docket No. USCBP-2010-0038, FR Pub 03/26/12)