Customs Brokers Seek Modification of Broker Confidentiality Rules

On August 18, 2013, the National Customs Brokers & Forwarders Association of America, Inc. (NBCFAA) posted a press release on their website stating that NBCFAA asked the Customs and Broker Protection (CBP) to revoke or modify a number of Customs rulings that it believes have created an overly strict confidentiality standard. The NCBFAA has requested that CBP adopt a standard that requires brokers to maintain the confidentiality of an importer’s “proprietary business information” which is generally defined as information which could harm the importer’s competitive position if disclosed.

A number of CBP rulings, issued over the last decade, have interpreted the provisions of 19 CFR 111.24 to preclude brokers from disclosing the most basic client information to any third party (including affiliated businesses) without first obtaining a confidentiality waiver from the client. According to NCBFAA, “this interpretation fails to consider that there are numerous situations where the broker is required to share this information with a third party to facilitate the client’s transactions. Furthermore, CBP has maintained this position despite the proliferation of data mining services and the fact that other parties in the supply chain are not subject to any restriction on the disclosure of same client information.”

The NBCFAA also seeks confirmation that the confidentiality requirement does not extend to information that would otherwise be publicly available. Further, the NCBFAA would like to create an exception to the confidentiality requirement that permits a broker to share information with an attorney or liability carrier in situations where the broker is forced to defend itself against a claim from the importer.

NCBFAA has stated in their press release that CBP has preliminarily expressed a willingness to consider the NCBFAA proposal. In the event that CBP agrees to modify or revoke the rulings at issue, a notice will be published in the Federal Register.