JIG Expresses Concern Regarding the Possible Development of a Global Data Warehouse Owned and/or Operated by the Private Sector

In its letter, JIG states that the development of this program will undoubtedly raise a number of issues related to commercial competitiveness and global security. For this reason, JIG states that the international trade community must be consulted in the program's development before it or a pilot is instituted.

JIG's Immediate Concerns about the Development of a Global Trade Exchange

The following are highlights of JIG's immediate concerns about the developmentof a Global Trade Exchange, as outlined in its letter:

Information stored will be difficult to protect. The vast amount of information stored within a data warehouse, managed by a private entity, will be difficult to protect. Given the volume of the data and complexity of the electronic protocols, there is a significant potential for leaks. The ability of unauthorized parties to obtain information from the system will inevitably result in harm to both homeland security and the competitiveness of U.S. business.

Companies are hesitant to share confidential information. Companies are constantly searching for new business opportunities and markets and are hesitant to share confidential information with outside parties, including foreign governments, as it will almost always be shared with competitors.

U.S. will have little/no control over foreign gov't use of information. Sharing confidential business data with foreign governments must be carefully considered, especially since the U.S. will have little or no control over how the information will be used or disseminated. At this time, JIG states that it is unaware of any means to ensure that information shared by U.S. Customs and Border Protection with a foreign government will be protected or secured against distribution to a business competitor.

JIG questions if extraterritoriality of U.S. law will be enforced, if data will be protected through the World Trade Organization, and if action through the WTO would be sufficient. JIG states that these questions must be addressed because if any foreign government acts in a manner that undermines the integrity of the Global Trade Exchange, the effects on U.S. industry would be disastrous.

Information sharing will introduce uncontrollable elements. In addition to the numerous commercial concerns the Global Trade Exchange creates, it also establishes security concerns. JIG states that by trusting a large amount of data to the care of the private sector and sharing it with foreign governments, a number of uncontrollable elements will be introduced to the system. A breach of any of these levels could carry significant consequences for the security of the U.S. border.

Necessity of Global Trade Exchange challenged. In light of other data-oriented programs already implemented or under development, such as the "102" program (also known as Security Filing), JIG questions the necessity of the Global Trade Exchange. JIG adds that it understands the importance of collecting data elements to develop more accurate risk profiles, but wants to know at what point the expanded requirements become unnecessary or duplicative.

Implementation may violate U.S. laws. The implementation of the Global Trade Exchange may violate current U.S. laws, such as the Trade Secrets Act (18 USC 1905).

JIG urges DHS to consult with trade before moving ahead. JIG states that this proposal has very serious ramifications to the competitiveness of U.S. companies engaged in global trade. Unlike previous rulemaking by DHS, CBP, etc., there does not appear to be a plan for input from the commercial stakeholders on the data warehouse concept. JIG strongly urges the DHS Secretary to consult with the trade before moving ahead with the proposal.

(See ITT's Online Archives or 06/28/07 news, 07062899 2, for BP summary announcing that DHS was considering such a third-party data warehouse.)

JIG letter (dated 08/02/07) available via email by sending a request to documents@brokerpower.com

BP Note

American Shipper suggests in its August 2007 issue that such a Secure Freight Initiative data clearinghouse could allow one country's export data to become another country's import data for security and/or data requirements, adding that a private sector approach could get around the jurisdictional challenge of DHS requiring 100% scanning of all containers at foreign ports, by having terminal operators automatically transmit readouts to the privately run clearinghouse, that in turn would send the data to CBP and other customs agencies. (AS, dated August 2007, www.americanshipper.com)