C-TPAT to be recast as ‘all-threats’ program

   The U.S. Customs-Trade Partnership Against Terrorism could evolve beyond a program focused on supply chain security to one that encompasses all types of threats associated with international trade, David Aguilar, acting commissioner of U.S. Customs and Border Protection, recently said.
   Plans to widen the scope come as the program prepares to take a $5 million hit, according to the Obama administration’s fiscal year 2013 budget proposal released this week. 
   Meeting with three reporters shortly after taking the organization’s helm at the start of the year, Aguilar said the goal is to expand C-TPAT to address counterfeit imports; narcotics, weapons and currency smuggling; and other risks in addition to terrorists penetrating commercial freight transportation networks to sneak weapons, equipment or people into the country.
   C-TPAT is a voluntary program in which importers adopt tighter security measures across their international supply chains. It is designed to improve CBP’s efficiency by allowing officers to focus inspections on companies that have fewer demonstrated controls over their shipments or are unknown quantities. Audited importers must follow approved security plans covering operational components such as facilities, shipping containers, data exchange, and personnel to ensure their shipments are not compromised by criminals or terrorists, and most importantly, require their suppliers and transportation vendors to follow the same criteria.
   In exchange, participants are eligible for reduced container examinations at ports of entry, release of other containers in a shipment when only one is the subject of a compliance exam, potential front-of-the-line treatment in the event of an inspection and other benefits.
   There are 10,221 member companies in C-TPAT as of Jan. 12, Kevin McAleenan, acting assistant commissioner of field operations, said in testimony before the House Homeland Security Committee last week. Less than 12 months ago, former Commissioner Alan Bersin set a goal of reaching 40,000 members within five to seven years. Program growth has stagnated, however, with only 138 new companies joining since the end of 2010. 
   The level of benefits depends on the importer’s status within the program. A company that is certified based on database checks of its records is essentially on probation and does not receive any true benefits. Once a company passes an on-site validation confirming security practices are being carried out in foreign and domestic facilities in a selected trade lane, and makes any necessary changes to its processes, it is considered a Tier 2 member and eligible for entry-level benefits. Partners that exceed the minimum security criteria and adopt best security practices or innovative techniques are granted Tier 3 status. A year ago, there were only 312 Tier 3 members, according to the most recent data available.
   C-TPAT only applies to imports, but exports will be part of the program expansion contemplated by CBP, Aguilar said. 
   Trade compliance experts for several years have called for the program to include an export component so that companies can get credit for applying the same processes to outbound shipments, and then receive trade facilitation benefits from foreign customs services that coordinate supply chain security with CBP.
   Under a more robust C-TPAT, shippers will be responsible for having plans to identify and prevent a range of threats. The key aspect to leveraging the private sector for enforcement and security purposes is sharing information, Aguilar said.
   “The more information we get, the sooner we get it, the quicker we can make assessments” about the admissibility of cargo, he said. The new approach follows the path started by Aguilar’s predecessor, Bersin, who advocated quicker cargo release decisions for shippers that provide more information much earlier than required to meet normal regulatory requirements.
   The agency is working with the Commercial Operations Advisory Committee, represented by industry members, on how to broaden the trusted shipper program, Aguilar said.
   Meanwhile, the Department of Homeland Security said in its budget request to Congress this week that it plans to extend from three to four years the period of time before a company comes up for a follow-up validation. Changing to a four-year cycle to recheck companies would save $5 million, bringing program funding needs down to $40 million and reducing the amount of validations conducted each year, it said. The savings will be used to cover expenses for increased staff levels at ports of entry. The new revalidation schedule aligns with one available since 2010 for Tier 3 member firms. At the time, the change was characterized as a unique benefit for those companies in recognition of their strong security measures.
   Mexican highway carriers undergo verification every year because they are considered to pose a high risk given the influence of drug cartels south of the U.S. border.  
   With fewer available resources, C-TPAT supply chain specialists will conduct overseas validations on a more regional basis and fewer domestic site visits, and hold annual training for the trade community every other year, according to the budget document. The program will pursue more agreements to integrate C-TPAT with similar industry partnership programs in other countries, which has the potential to reduce the number of required overseas site visits if CBP can accept reviews conducted by a foreign customs service as meeting its standards. Mutual recognition agreements are in place so far with Canada, Japan, New Zealand, Jordan, and South Korea, although the level of operational coordination is still limited in many cases. 
   Other belt-tightening moves include consolidating some C-TPAT field offices in the United States, eliminating contractors and personal digital assistants for supply chain security specialists, and limiting resources for the automated Web-based portal system for maintenance issues.
   The C-TPAT portal allows members to submit their application, update their security profile, view their validation scorecard, and receive sanitized intelligence information and other communications from CBP. It also enables business partners to verify the status of a company within C-TPAT.
   CBP will phase in enhancements to the portal system over an extended period of time and delay development of the second generation portal, according to the budget. — Eric Kulisch