CBP Says Backup Customs Broker Data Can Be Stored Outside US

Duplicates of customs broker records may be stored on servers outside the U.S. as long as the originals are stored on U.S. servers, CBP said in a March 10 ruling. The ruling, which was requested by Craig Seelig at WiseTech Global, examined WiseTech's use of a foreign server in Australia as a secondary site for its customs records storage.

The software developer told CBP it “wishes to have two copies of the brokers' records, one in a primary and one in a secondary site.” While the primary site is in the U.S., the secondary site will be “under WiseTech's ownership and control, in one of its other secure data centers, in either Australia or the United Kingdom,” it said. The broker “records will be within the U.S. and accessible by CBP through appropriate legal means of access” and “this approach is consistent with industry best practice and provides layers of protection for customer data,” the company told CBP.

CBP requires that for broker records stored on a server, the server must be located in the customs territory of the U.S., CBP said. This is “because this is where CBP has jurisdiction to issue a summons and inspect records,” the agency said. But, “there is no rule applicable to duplicate records,” it said. “It seems logical then that once the recordkeeping regulations are met, including 19 C.F.R. § 111.23(a), requiring that records be retained at any location within the customs territory of the United States, that duplicates of these records may be maintained outside the territory of the United States. In fact, in the event of a disaster, which destroys WiseTech's records in its locations in the U.S., it would behoove CBP to have access to duplicate records, if outside of the U.S.”

WiseTech can “retain duplicate customs records outside of the customs territory of the United States so long as WiseTech maintains all 'records' that are subject to the recordkeeping requirements in the United States and fulfills all recordkeeping requirements with records maintained within the United States,” CBP said in the ruling. The ruling, HQ 8292868, was recently mentioned by Alan Klestadt, a lawyer at Grunfeld Desiderio, during a National Customs Brokers & Forwarders Association of America webinar (see 2004220021). Klestadt noted that with an update to customs broker regulations coming soon, the language around recordkeeping could be revised to allow for more cloud-based recordkeeping.