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American Shipper

U.S. Customs prepares C-TPAT criteria for brokers

U.S. Customs prepares C-TPAT criteria for brokers

   U.S. Customs and Border Protection will not insist that customs brokers police foreign suppliers to make sure they establish good supply chain security practices as it does for importers who want to participate in the Customs-Trade Partnership Against Terrorism, a top CBP supervisor said last week.

   The border management agency plans to complete the first draft of security criteria for brokers by the end of the month, said Todd Owen, executive director of cargo and conveyance security, at the National Customs Brokers and Forwarders Association of America’s fall conference in Washington. The document will reflect the understanding that brokers have limited influence on other parties in the supply chain.

   “There won’t be criteria where we expect you to push back all the way to the point of stuffing because we recognize that you simply don’t have that leverage over the foreign manufacturer,” he said.

   CBP began tightening rules for the trusted shipper program last March by moving from suggested guidelines to minimum criteria for importers to follow. C-TPAT is a voluntary program under which importers can reduce their threat scores and the chances of cargo inspection by adopting approved internal controls over personnel, facilities, physical access and information, and demanding similar steps from foreign vendors to maintain business ties.

   Earlier this year, CBP also rolled out new criteria for ocean and highway carriers and recently completed minimum standards for railroads and foreign manufacturers in Mexico and Canada. The agency is also in the process of developing criteria for air carriers, Owen said. Importer criteria are modified to accommodate business realities for each sector.

   Owen said brokers serve as conduits, or middlemen, between all the parties and the U.S. government. As such brokers can help screen clients and alert authorities to discrepancies in shipping and financial documents that might indicate criminal or terrorist smuggling activity. They also can educate clients about the benefits of filing entry-level information in advance so CBP has all the targeting data it needs to analyze shipments before arrival and let legitimate ones pass through without inspection, he said.

   Most brokers already provide entry-type data to Customs prior to vessel arrival for their C-TPAT clients.

   The latest program update by Owen showed that 6,092 companies that have been certified as meeting C-TPAT’s minimum security requirements, compared with 4,615 since the beginning of 2005 and 6,108 in June.

   Suspensions, mergers, voluntary withdrawals and companies going out of business can account for small fluctuations in program membership month to month.

   Almost three dozen officers for supply chain security compliance have recently completed training in logistics matters and will be in the program’s five field offices by the end of the month, raising the number of people dedicated to assessing corporate security profiles and conducting on-site validations from 125 to 158. In the first quarter of the year, CBP had about 88 supply chain specialists.

   Owen said the increase in staffing this year has allowed the agency to surge the number of validations it has conducted so shippers can receive the full benefits of expedited clearance. More than 3,200 companies, or 52 percent of the C-TPAT membership, have been audited on specific trade lanes to make sure they have implemented security plans as promised, compared with 2,455 (40 percent) in June. CBP will complete validations on 65 percent of applicants by the end of the year and be caught up sometime in 2007. At that point, CBP will begin revalidating companies based on their risk, he said. Earlier this year, Owen said he expected companies to undergo a follow-up security exam every three years, with higher risk supply chains subject to more frequent checks. Supply chain inspectors will examine a different part of a company’s supply chain each time.

   CBP has sped up the validation process by conducting overseas “blitzes” in which it deploys multiple teams of inspectors for several weeks to investigate many different supply chains in a single trip. A CBP supply chain team visited Hungary for the first time last week, while others paid visits to Vietnam and Cambodia. C-TPAT officers are also scheduled to visit Indonesia, the Philippines and Singapore by the end of the year, Owen said.

   CBP has suspended 175 companies from C-TPAT for various types of security breaches, up from 151 in June. Highway carriers (115) are involved in a large portion of the sanctions. Owen said the quantity and size of seizures from Canada is on the increase and could jeopardize the status of C-TPAT carriers who are not careful.

   Congress has criticized the slow pace of validations and granting of benefits simply for signing up, but CBP’s efforts to correct these and other deficiencies has quelled any talk about mandating C-TPAT requirements for all companies involved in international trade.

   A survey of 44 shippers recently released by the Lyndon B. Johnson School of Public Affairs at the University of Texas indicated some companies are concerned that the program lacks resources and proper training for personnel, and that audits take too long to complete. The survey was conducted earlier this year before many of CBP’s upgrades went into effect.

   CBP Commissioner Ralph Basham reiterated in a keynote speech that the Department of Homeland Security intends to keep C-TPAT a voluntary program.

   “Your companies work best and are more profitable when you are not overburdened with unnecessary government regulation,” he said.

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