U.S. nears supply chain security pact with New Zealand

U.S. nears supply chain security pact with New Zealand U.S. Customs and Border Protection will soon announce that it will recognize New Zealand’s supply chain security program as equivalent to its own Customs-Trade Partnership Against Terrorism and work to coordinate the two programs to accredit trusted shippers for expedited shipment clearance on either end, Michael Mullen, assistant commissioner for international affairs and trade relations, said last week.
   Agency officials have indicated during the past six months that New Zealand is among a handful of countries that are likely candidates for exchanging reciprocal trade benefits because they have demonstrated strong security partnership programs are in place.
   Mutual recognition would allow companies accredited in one country as having adequate safeguards for container shipments to receive faster customs clearance without having to go through multiple application and vetting processes, or wait until U.S. officers can arrive to do the job.
   C-TPAT is a voluntary program that provides trade facilitation benefits to importers that meet baseline criteria for strong shipment controls. The World Customs Organization, at U.S. urging, has passed a global security blueprint for customs administrations to follow that is largely modeled on U.S. programs, including C-TPAT. The SAFE Framework of security standards encourages customs administrations to start similar industry partnership programs. In the WCO’s parlance, trusted shippers are called authorized economic operators (AEO).
   Under C-TPAT, U.S. teams travel overseas to verify the security practices of foreign suppliers. Multinational corporations in particular are pushing for a common approach to customs processes, including voluntary trusted shipper programs, so that companies do not have to comply with multiple security and data requirements in the nations in which they do business. Companies also favor a multilateral approach because they can gain more credits towards inspection-free status by expanding the universe of suppliers directly and indirectly participating in C-TPAT.
   CBP will consider mutual recognition with countries that have fully operational AEO programs. The agency undertakes a four-step process to evaluate whether other programs are compatible with U.S. security requirements, Mullen said during a Commercial Operations Advisory Committee meeting of industry representatives.
   First, the countries meet to do a side-by-side comparison of the programs, which are based on core criteria in the WCO security framework, to identify any gaps in validation procedures. Then customs administrations design an operational plan to do a pilot project to test their ability to share security assessments of shippers and information on each container shipment. A pilot program is conducted with companies from each program and, finally, the data from the trial exercise is analyzed.
   If the process works well the two sides can spell out mutual security arrangements in a memorandum of understanding.
   The European Union, Jordan, Australia and Sweden have also been mentioned by CBP as possible candidates for mutual recognition.
   CBP supply chain specialists have attended joint training sessions with customs officers in these countries, as well as conducted vulnerability assessments of manufacturing and transportation facilities under the oversight of the host customs agencies. CBP officers, in turn, have shadowed local customs officials conducting supply chain inspections.
   There are several challenges to achieving U.S.-EU reciprocity, not least of which is that the EU favors a system whereby countries audit domestic shippers and share the results with trading partners so that customs agencies don’t have to send inspection teams around the world to check the supply chain security practices of each company.
   The EU also doesn’t have a fully functional AEO program that covers supply chain security. The European Commission is scheduled in January to augment its existing AEO program, which is focused on trade compliance, with a security component to conform to the WCO standards.
   On top of that, each of the 27 EU member nations will need to conform to the collective standard for the United States to consider a reciprocal arrangement on supply chain security, but each country is expected to have its own program with unique differences.
   Mullen said other countries don’t have to have programs identical to C-TPAT, but that they should follow the “analogous standard” set by the WCO in order to achieve mutual recognition. The majority of the work to implement mutual recognition with the United States will still fall to each of the EU member states, he said.
   “An agreement must be at the EU level, but it’s a member by member issue about how this proceeds,” Mullen said. “There won’t be some blanket mutual recognition.”