Fast And Secure Trade
Since C-TPATs enactment after 9/11 in the United States, the Customs Trade Partnership Against Terrorism (C-TPAT) has grown to be one of the largest public and private partnerships in the world. Enter 2016, 15 years after C-TPAT was implemented, it still plays an equally import role in international trade with 53 Countries deploying mutual recognition “Authorized Economic Operator” (AEO) programs.
C-TPAT General Overview
- What is C-TPAT?
- What are the benefits of C-TPAT?
- What are the eligibility requirements?
- What are the “Security Criteria”?
- Application to participate.
- Customs validation of C-TPAT programs.
- C-TPAT Mutual Recognition.
What is C-TPAT?
“The Customs-Trade Partnership Against Terrorism (C-TPAT) program is a U.S. Customs and Border Protections (CBP) premier trade security program. The purpose of C-TPAT is to partner with the trade community for the purpose of securing the U.S. and international supply chains from possible intrusion by terrorist organizations.”
CBP Fact Sheet:
What are the benefits of C-TPAT?
According to U.S. Customs and Border Protection, the benefits of participating in C-TPAT could include:
- Tiered Benefit Levels. Minimal program benefits are afforded until after an on-site validation is performed to confirm the C-TPAT member has adopted the minimum security criteria.
- Free and Secure Trade (FAST). FAST lane access is granted for certified members for shipments from either the Canadian or Mexican border, and get special consideration during examinations.
- Stratified Exam Benefit. For entries with multiple containers this allows the importer to move all but the container that actually has the line item in question to their premises. However, those containers moved must remain sealed and ready for inspection should CBP choose. This may result in significant cost savings on storage at the pier for container not required for the examination.
- Front of the Line. To the extent possible containers can be moved ahead of any non C-TPAT shipments awaiting examination, regardless of how long they have been there. This translates into time savings and money savings in that containers will not wait as long at the examination site.
- Business resumption. CBP has conducted comprehensive business resumption planning in the event of significant disruption in the flow of trade. C-TPAT status will be taken into consideration once CBP resumes shipment processing. This benefit is a direct result of 9/11.
- C-TPAT can be associated with everything a company needs to maintain reputation, and brand equity. C-TPAT can raise a company’s reputation and ability to secure new business
- Mutual Recognition. CBP has entered into mutual recognition agreements with: New Zealand, Canada and Jordan. Companies participating in C-TPAT will have the assurance their standing in the program will be made available, if they choose, to the foreign Customs administrations for which a mutual recognition agreement is in place. This can be factored in when foreign Customs administrations make their own risk assessments.
- Fight Against Terrorism. C-TPAT allows CBP and those members who are willing to go the extra step to work together to prevent potentially crippling economic disruption due to terrorist activity.
What are the eligibility requirements?
Importer eligibility requirements are:
Be an active U.S. Importer or Non-Resident Canadian Importer into the United States.
- Have a business office staffed in the U.S. or Canada.
- Have an active U.S. Importer of Record number.
- Posses a valid continuous import bond registered with CBP.
- Have a designated company officer as the primary cargo security officer responsible for C-TPAT.
- Commit to maintaining the C-TPAT supply chain security criteria.
- Create and provide CBP with a supply chain security profile.
What are the Importer Security Criteria?
- Business Partner Requirement: Must have written process for selection of business partners including manufacturers, suppliers and vendors.
- Security Procedures: The importer must have documentation indicating whether business partners are or are not C-TPAT certified. For those partners not eligible for C-TPAT importers must require they demonstrate they are meeting C-TPAT security criteria in written/electronic confirmation.
- Point of Origin: Importers must ensure business partners develop security processes consistent with C-TPAT security criteria to insure integrity of the shipment at point of origin.
- Participation/Certification in Foreign Customs Administration Supply Chain Security Programs: Prospective business partners achieving certification in a supply chain security program administered by foreign Customs Administration should be required to indicate their status and participation.
- Other Internal criteria for selection: Financial soundness, ability of meeting contractual security requirements, and identify and correct security deficiencies as needed should be addressed by the importer.
- Container Security: Container integrity must be maintained to protect against the introduction of unauthorized materials or persons. Procedures must be in place to maintain the integrity of the container at the point of stuffing. A high security seal must be affixed to all containers bound for the U.S., and must meet or exceed current PAS ISO 17712 standards.
- Container Inspection: Procedures must be in place to verify the integrity of each containers structure. A seven-point inspection process is recommended:
- Front Wall
- Left Side
- Right side
- Inside/outside doors
In addition, procedures must be in place for the following areas related to container security:
- Container Seals: How seals are controlled and affixed.
- Container Storage: Secure from unauthorized access.
- Physical Access Controls: Prevent unauthorized access to facilities.
- Employees: ID system must be in place.
- Visitors: Must present ID upon arrival.
- Deliveries: Must have proper ID present upon arrival, even for mail.
- Challenge and Remove Unauthorized Persons
- Personnel Security: Screen prospective employees.
- Pre-Employment Verification: Verify application information.
- Background checks: Consistent with applicable laws.
- Employee Termination Procedures: Deny access.
- Procedural Security
- Documents processing: Accurate, legible protected against loss, exchange or introduction of erroneous information.
- Manifest Procedures: Insure integrity of cargo received from abroad.
- Shipping & Receiving: Cargo should be reconciled against shipping manifest.
- Cargo Discrepancies: Shortages, overages or other significant discrepancies are investigated.
- Security and awareness training: Employees must be made aware of security procedures.
- Physical security: Facilities must have physical barriers to guard against unauthorized access.
- Gates and gate houses: must be manned or monitored.
- Parking: Private vehicles should not park next to cargo handling or storage areas.
- Building structure: Constructed to prevent unlawful entry.
- Locking devices and key controls: All windows, gates, fences must be secured with locking devices.
- Lighting: Must be adequate inside and out.
- Alarm systems, and video surveillance.
- T. security: Password protection and identify abuse.
Application to participate
How do eligible companies apply to participate in C-TPAT?
Businesses must apply to participate in C-TPAT. Participants complete an online electronic application on www.cbp.gov that includes submission of corporate information, a supply chain security profile, and an acknowledgement of an agreement to voluntarily participate. In completing the supply chain security profile, companies must conduct a comprehensive self-assessment of their supply chain security procedures using the C-TPAT security criteria or guidelines jointly developed by CBP and the trade community for their specific enrollment category. The criteria or guidelines, available for review on the CBP website, encompass the following areas: Business Partner Requirements, Procedural Security, Physical Security, Personnel Security, Education and Training, Access Controls, Manifest Procedures, Information Security, and Conveyance Security.
Validation of C-TPAT programs
- Objective: The purpose of the validation is to ensure that the C-TPAT participant’s international supply chain security measures contained in the C-TPAT participant’s security profile have been implemented and are being followed in accordance with established C-TPAT criteria or guidelines.
- Validation Principles: The validation process will enable CBP and the C-TPAT participant to jointly review the participant’s C-TPAT security profile to ensure that security actions in the profile are being effectively executed.
- Validation Selection Process: The C-TPAT participant’s security profile will be selected for validation based on the company’s import supply chain risk. Validations may be initiated based on many factors including: security related anomalies, strategic threat posed by geographic regions, other risk related information, or strategic import volume. Unannounced validations will not be conducted. C-TPAT participants will be given approximately thirty days’ advance written notice along with a request for any supporting documentation that is needed.
- Validation Teams: Consist of a C-TPAT Supply Chain Security Specialist (SCSS) which is a CBP employee, and a representative of the C-TPAT participant.
- Validation Procedures: The SCSS provides written notification of the scheduled validation at least thirty days in advance of the validation. The SCSS will review the participants C-TPAT security profile, and other information received from the company. The validation will begin with a briefing of the participant company’s officials by phone or the primary U.S. office. The SCSS will discuss the participant’s C-TPAT role and focus on the scope of the validation, including location visits throughout the supply chain.
- Validation Visit: A validation visit is a detailed review of the participant’s import supply chain security procedures to determine if sufficient security procedures are in place to meet current C-TPAT guidelines or criteria. The specific sites of the validation visits will be determined based on the C-TPAT SCSS validation risk analysis and coordinated with the C-TPAT participant representative. A validation may require multiple visits at foreign locations. The visits are usually performed in no more than a day per visit location.
- Validation Report: Validation visit findings are documented in a validation report and forwarded to the C-TPAT participant. The report findings will identify supply chain security recommendations or best practices. If significant supply chain security weaknesses or recommendations are found, a participant’s C-TPAT benefits may be suspended or removed depending on the circumstances. If a company has their C-TPAT benefits suspended, C-TPAT will recommend that the company implement an action plan containing corrective actions to address specific supply chain security weaknesses.
Q: How long will it take to complete a C-TPAT validation?
A: Validations are focused and concise. Although they may extend beyond two weeks on some occasions due to CBP planning and travel, they will not involve more than ten working days of a company’s time.
Q: How will validation findings impact a company’s participation in C-TPAT?
A: If the validation findings are satisfactory, the results will increase the level of benefits provided to importer participants. If the validation findings reveal significant weaknesses in the company’s application of C-TPAT guidelines or criteria, some or all of the participant’s C-TPAT benefits may be suspended or removed until corrective action is implemented and verified.
C-TPAT Mutual Recognition
Mutual Recognition (MR) refers to those activities relates with the signing of a document between foreign Customs Administration that allows an exchange of information aiming to improve supply chain security. The signed document, or MR, indicates that security requirements or standards of the foreign partnership program, as well as its validation procedures are similar. The essential concept of a Mutual Recognition Agreement (MRA) is that C-TPAT and the foreign program are compatible in both theory and practice so that one program will recognize the validation findings of the other program.
Today 53 countries have an AEO program, including the member states of the European Union, the United States, Canada, South America, Japan, China and Korea. Countries with AEO programs have the option of recognizing the secure and reliable status of a company that is awarded by another AEO country program, through the mutual recognition process.
As of March 2014, 168 out of 179 World Customs Organization (WCO) Members have signed Letters of Intent committing to implement the SAFE Framework. Reference: http://goaeo.com/ABOUT_AEO.aspx
The following programs have Mutual Recognition with C-TPAT:
- New Zealand Customs Service – Secure Export Scheme Program (SES) – June 2007 http://www.customs.govt.nz/features/ses/Pages/default.aspx
- Canada Border Services Agency – Partners in Protection Program (PIP) – June 2008
- Jordan Customs Department – Golden List Program (GLP) – June 2007 https://www.customs.gov.jo/English/default.shtm
- Japan Customs and Tariff Bureau – Authorized Economic Operator Program (AEO) –June 2009 http://www.customs.go.jp/english/aeo/
- Korean Customs Service – AEO Program – June 2010 http://aeo.or.kr/eng/aeoAboutaeo.do
- European Union – AEO Program – May 2012 http://ec.europa.eu/taxation_customs/customs/policy_issues/customs_security/index_en.htm
- Taiwan – General of Customs, Taiwan Ministry of Finance’s – AEO Program. November 2012 http://www.mof.gov.tw/Eng/Pages/Detail.aspx?nodeid=318&pid=57917
- Israel – AEO Program – June 2014 http://ozar.mof.gov.il/ita2013/eng/AEO.htm
- Mexico – October 2014
- Singapore – Secure Trade Partnership (STP) – December 2014 http://www.customs.gov.sg/businesses/customs-schemes-licences-framework/secure-trade-partnership-stp
Through these initiatives, CBP is asking businesses to ensure the integrity of their security practices and communicate and verify the security guidelines of their business partners within the supply chain.
ID Global Concepts has been involved in managing global trade for apparel and soft goods commodities for 10 years. IDGC can add value and experience to your organisation either through consultancy or management contract to ensure your business has the best practice trade policy in place that is the right fit for your business and meets your value expectations.
Below are the retailer’s ID Global Concepts have delivered apparel and accessories to over the last ten years;
Macy’s, Urban, Sears, Marks & Spencer, Myer, Kmart US & Kmart Australia, Dunnes Stores, Debenhams Monsoon Accessorize, Asos, Witchery, Brown Sugar, RM Williams, Coles, Chloe, John Lewis, Disney, Next, Firetrap, Lonsdale, Postie, ASDA, Harris Scarf, River Island, Tesco, Woolworths, Walmart, Glassons, Babies’R’Us, New Look, Target US & Australia, Primark, David Jones, Best & Less, Sophie, Yakka, Top Shop, BHS, Burlington, BigW, Oasis, JayJays, Blue Illusion, Driza-Bone, Just Jeans, Volcom, House of Fraser, Pumpkin Patch, Suzanne Grae, Pelaco, Laura Ashley, Sportsgirl, Ted Baker, Truetex, TableEight, French Connection
If you would like to learn more or wish to discuss other supply chain opportunities, please email us at email@example.com.