August 29, 2008


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Cross-Border Travellers Beware: Confidential Information is at Risk

by: John W.  Boscariol, Simon V.  Potter, Orlando E.  Silva, Brenda C.  Swick

Much attention has been paid recently to the extent to which customs officials can search electronic media devices such as laptops, digital music players, personal data assistants and BlackBerry® devices accompanying travellers when crossing international borders. Most of this attention has focused on the US Customs and Border Patrol (CBP), as it has recently published a policy statement affirming its position that border patrol officials may conduct "suspicionless" searches of electronic devices entering the United States. However, the topic is equally important with respect to the Canada Border Services Agency (CBSA), as many business professionals enter and re-enter Canada daily with electronic devices in hand and the CBSA has stated that its examination authority under the Customs Act extends to electronic storage devices.

Although this article has been prepared from a Canadian legal perspective, given the recent US policy statement on the topic, as well as the vast number of business ties binding the two countries, it is very useful to consider each issue as it applies to both sides of the border. Organizations developing strategies to protect confidential data carried by employees when crossing the Canada—United States border should consult with both Canadian and US customs counsel.

1. Electronic Devices Are "Ordinary Goods" for Customs Purposes

Electronic devices are unlike other items travellers typically carry in their luggage. These devices often contain important, confidential information, such as trade secrets or legal documents. Unfortunately, border officials from both the United States and Canada do not treat electronic devices any differently than other goods.

Following closely on the heels of a decision of the US Court of Appeals for the Ninth Circuit affirming the CBP’s right to search electronic devices, the CBP recently issued a policy statement clarifying its position on searches of electronic devices at the border. This was not intended to be a declaration of new law. Rather, the CBP insisted that searching electronic devices is part of its long-standing practice. It emphasized that the examination of electronic devices is a crucial tool for detecting criminal behaviour and regulatory violations. Thus, these devices like all other goods entering the United States may be searched by the CBP.

The CBSA has yet to publish a report detailing its policy on border searches of electronic devices. That said, the CBSA has stated that its examination authority under the Customs Act extends to electronic storage devices. Other sources of information also suggest that, like its American counterpart, the CBSA does not accord electronic devices special status at the border. For example, the Canadian Customs Act broadly defines "goods" to include "any document in any form," suggesting no special treatment for electronic documents. Canadian case law also supports this interpretation. In a 2008 Ontario Court of Justice decision, the court stated that it saw no intrinsic difference between a computer search and a detailed examination of the contents of one’s suitcase.

2. Searches without Suspicion

Given their characterization as ordinary goods, it follows that a border official can search travellers’ electronic goods even in the absence of suspicion regarding the traveller or the electronic device.

US officials have clearly stated this as their policy. In its recent statement, the CBP asserted that its officers can review and analyze information transported by an individual crossing the US border absent individualized suspicion.

Canadian policy on this matter is not clearly spelled out, though sources suggest that it is similar to the American one. From their press releases concerning the confiscation of child pornography, it is evident that CBSA officers regularly perform spot-checks of laptops at the border. Moreover, in another recent Ontario Superior Court of Justice case, the court justified a customs search of a computer disc by reasoning that searches at the border are routinely held to be reasonable simply because they are searches at the border. This suggests that electronic devices may also be subject to suspicionless examinations at the Canadian border.

It should also be noted that the CBSA does not treat items shipped by mail any differently than those brought across the border with a traveller, unless that mail weighs 30 grams or less. Thus, shipping a laptop into Canada by mail will not provide you any greater protection of your privacy.

3. Detention of Electronic Devices for Customs Review

The detention of a laptop or BlackBerry® device at the border could have very harmful effects for the business traveller. These travellers should be aware of their potential vulnerability when crossing the Canada—United States border.

The CBP policy statement affirms that officers may detain electronic devices in order to properly search them, which may include translating and decrypting the documents. This search can occur on-site, or the device may be shipped to an off-site location. While the CBP insists that the detention will only last for a reasonable period of time to perform a thorough border search, what qualifies as a "reasonable time" has not been specified.

Without a clear policy statement, the extent to which CBSA officers can detain electronic devices without suspicion in order to search them is uncertain. However, under the Customs Act, officers may seize and detain goods when they have reasonable grounds to believe a contravention has occurred. If records are seized as evidence, they cannot be detained for longer than three months unless the person from whom they were seized consents, a justice of the peace so orders, or judicial proceedings have been instituted in which the records might be required.

4. Border Officials’ Duty of Confidentiality is Permeable

Both CBP and CBSA officials have made efforts to assure travellers that their confidential information will be protected. Despite this attempt, there are many exceptions to the general rule of confidentiality. Thus, travellers are vulnerable to the possibility of their private information being made public.

The recent CBP policy statement highlights the great potential for exposure of sensitive information during border searches. For example, documents detained at the border without individualized suspicion may be shared with third parties in order to translate, decrypt or receive explanations regarding complex subject matter. Where officers retain documents or devices based on probable cause of unlawful activity, they may share copies with federal, state, local and foreign law enforcement agencies, albeit only to the extent consistent with applicable law and policy.

The Canadian Customs Act provides many exceptions to the general rule of confidentiality. For example, information gathered during a customs search can be released for use in any criminal proceedings and also for civil proceedings when those proceedings relate to the administration or enforcement of legislation such as the Income Tax Act, the Customs Act, the Employment Insurance Act and any other legislation that provides for the imposition or collection of a tax or duty.

Information obtained by the CBSA can also be disclosed in a wide variety of fora, including courts of record in Canada, courts outside of Canadian jurisdiction, international organizations, dispute settlement panels and other bodies.

The clearest reflection of the weakness of the confidentiality guarantee is encompassed in subsection 107(6) of the Customs Act, which permits the Minister of National Revenue to provide customs information to any person solely on the basis that the Minister believes that "the public interest in providing the information clearly outweighs any invasion of privacy, or any material financial loss or prejudice to the competitive position of the person to whom the information relates."

5. Vulnerability of Information Subject to Legal Privilege

A further concern is the potential search of electronic devices containing information covered by solicitor-client privilege.

In its recent policy statement, the CBP declared that although material covered by solicitor-client privilege may be subject to special handling procedures, that material is not necessarily exempt from a border search. Moreover, if the documents are privileged but the CBP officer suspects that the content of the document may constitute a crime or otherwise pertain to a determination within the CBP’s jurisdiction, the officer may search the privileged document after seeking advice from the Associate/Assistant Chief Counsel or appropriate US Attorney’s office.

Neither the Canadian Customs Act nor the CBSA’s publications have directly addressed the issue of border searches of documents covered by solicitor-client privilege. While the Customs Act does provide protection for such documents in the context of an official demand for production, it does not necessarily follow that a declaration of privilege in a document will prevent a border official from searching that document. Thus, lawyers and others crossing the Canadian border should be cautious when transporting privileged information.

6. Protect Yourself and Your Clients

It is important to seek both Canadian and US customs advice on how to best protect sensitive material when crossing the Canada—United States border. The following are suggestions from a Canadian legal perspective for those who plan to enter or re-enter Canada.

Know how to characterize your sensitive information — Not all types of information are treated equally. Indeed, the CBSA distinguishes "biographical core information" and accords it a greater level of confidentiality. While there is no precise definition of this type of information, it does include income tax, banking and health records. Characterizing your sensitive information as biographical core information may help to improve your chances of maintaining confidentiality.

Know your rights — Remember that these broad investigative powers are limited to border searches. Canadian case law tends to justify these powers by emphasizing the reduced expectation of privacy at the border. Officials therefore generally must have individualized suspicion before searching your electronic device once you are inside Canada’s borders. Being aware of your rights can help prevent the unnecessary exposure of sensitive information.

Minimize risk — No matter which international border you are crossing, it is always wise to take positive steps to minimize the risk of exposing sensitive information. Encrypting this information might not be sufficient since, at least in the United States, border officials may seek decryption assistance even in the absence of individualized suspicion. A more effective alternative is to bring a clean laptop when travelling internationally. This should not pose any strategic difficulties if it is possible to connect remotely to the company’s server in order to access any required electronic documents. In order to keep the laptop clean for the border crossing back into the home country, be sure not to save any new documents to the local drives on the clean laptops.

 

 


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