- Type : • HTSUS :
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Related:
116025
OT:RR:CTF:ER
H221355 MES
Alan R. Klestadt, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
399 Park Avenue, 25th Floor
New York, NY 10022-4877
RE: Ruling Request on Application of 19 CFR § 111.24 to the Sharing of Client and Prospective Client Information.
Dear Mr. Klestadt:
This is in response to your ruling request dated June 6, 2012, regarding whether your client may share its client and prospective client information with third parties for security verification purposes. FACTS:
Your client is a customs broker incorporated in a multidimensional logistics company offering, inter alia, freight forwarding and other logistics related services. You ask whether disclosure of client and prospective client contact information to a third party for security screening purposes violates the terms of 19 CFR § 111.24. You describe the type of information to be shared as “ordinary contact information, such as the name and address.” You state that such screening is often required to facilitate a broker’s overall compliance with CBP’s national security objectives, as well as those of other governmental agencies. ISSUE:
Whether a customs broker may share client or prospective client contact information, such as the name and address, with a third party for security verification purposes.
LAW AND ANALYSIS:
You argue that the name and address of clients (and prospective clients) are independent information constituting precursor information to any customs filing and state that a customs broker sharing this contact information with a third party to screen against any security database prior to the initiation of any customs transaction should not be prohibited under § 111.24. Information such as the client name and address are protected under § 111.24 as information that pertains to the business of the clients serviced by the broker and absent client consent, the broker must not disclose the contents of the records or any information connected with the records. However, these confidentiality requirements do not apply to prospective clients.
Section 641(f) of the Tariff Act of 1930, as amended (19 U.S.C. § 1641(f)), provides in pertinent part that the Secretary may prescribe:
[S]uch rules and regulations relating to the customs business of customs brokers as the Secretary considers necessary to protect importers and the revenue of the United States, and to carry out the provisions of this section, including rules and regulations governing the licensing of or issuance of permits to customs brokers, the keeping of books, accounts, and records by customs brokers, and documents and correspondence, and the furnishing by customs brokers of any other information relating to their customs business to and duly accredited officer or employee of the Customs Service.
Pursuant to the above, brokers are subject to certain recordkeeping requirements, which are set forth in §§ 111.21 through 111.27 and Part 163 of CBP’s Regulations (19 CFR 111.21-111.27; 19 CFR Part 163). One of these requirements is that brokers maintain the confidentiality of client records. In this regard, 19 CFR § 111.24, “Records confidential,” reads as follows:
The records referred to in this part and pertaining to the business of the clients serviced by the broker are to be considered confidential, and the broker must not disclose their contents or any information connected with the 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 special agent in charge, the port director, or other duly accredited officers or agents of the United States, except on subpoena by a court of competent jurisdiction.
Thus, if “records” include the client’s name and address, then it cannot be shared. The term "records" is defined in 19 CFR § 111.1 in the following manner:
"Records" means documents, data and information referred to in, and required to be made or maintained under, this part and any other records, as defined in § 163.1(a) of this chapter, that are required to be maintained by a broker under part 163 of this chapter.
Section 111.24 thus covers a broad range of records. The term "records" can include any information made or normally kept in the ordinary course of business that pertains to certain activities, including information required in connection with any importation, declaration or entry. See 19 CFR § 163.1(a). The name and address of clients are found on various entry forms and are therefore, included in the range of information considered confidential per 19 CFR § 111.24.
CBP has previously considered the confidentiality requirements imposed on brokers relative to certain information, including a client’s name and address. In HQ 116025 (September 29, 2003), we stated “the identity of a client is information that appears on entry documents, and thus does relate to the transaction of "customs business.” We further stated that “there are specific fields on both the CF 3461 entry and CF 7501 entry summary that require information about a client’s identity and location… Since section 111.24 protects both the content of, and information connected with, covered records, the identity of a party to an entry transaction must be kept confidential.” Finally, HQ 116025 stated,
In the same manner that a broker should not reveal client name and address information that is derived directly from entry records, nor should the broker disclose information that would indirectly enable client identification. Thus the disclosure of the other types of UPS/SCS and UPS/CHB client background information, i.e., customer point of contact, internally generated UPS identifiers, and historical data, would also be proscribed by section 111.24.
Therefore, CBP has applied 19 C.F.R. § 111.24 to prohibit the sharing of information provided on entry forms and connected with these records, such as a client’s identity (i.e., name) and location (i.e., address).
However, the situation is different if the client consents to disclosure of the information. Accordingly, a broker obtaining a written release from a client allowing for the sharing of client information, such as that which would be necessary to share with a third party for security screening purposes, would not be subject to disciplinary action for violating the confidentiality requirements of § 111.24. See HQ 116025, dated September 29, 2003.
Moreover, the situation is different concerning disclosing only the name and address of prospective clients. The language of § 111.24 references records “pertaining to the business of the clients serviced by the broker.” The prohibition extends to such records and information connected to the records. In the case of a prospective client, we assume that no business records have yet been provided to the broker. Assuming that the proposed disclosure involves no records of the prospective client, disclosure of the name and address of the proposed client would not be prohibited by § 111.24.
HOLDING:
Absent client consent, 19 C.F.R. §111.24 prevents the sharing of client contact information, such as the name and address, with a third party for security verification purposes. Assuming that the proposed disclosure involves no records of the prospective client, disclosure of the name and address of the proposed client would not be prohibited by § 111.24.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division