The Customs Trade Partnership Against Terrorism (C-TPAT) is a partnership between the United States government and the private sector, seeking to increase U.S. border security by extending the protection of US borders to the point of origin for incoming cargo. Recognizing, in the aftermath of 9/11, that in order to maximize the government’s ability to protect the nation's borders, it was both imperative and necessary to enlist the aid of the private sector, C-TPAT was created.
C-TPAT enrolls compliant, low security risk companies who are directly responsible for importing, transporting, or coordinating commercial import cargo into the United States. Thru the partnership, the U.S. Customs and Border Patrol identifies trusted import traders with good supply chain security protocols, thereby reducing its need to screen their imported cargo. In doing so, U.S. Customs is able to focus its efforts on imported cargo involving unknown or high-risk importers.
Today, the extent of C-TPAT’s impact upon trade continues to expand, as the program evolves to include more participants, and widens its membership into more areas of the industry. Currently, only importers, brokers, and transportation providers are able to join the partnership. In the future, C-TPAT membership will be extended to others in the trade industry, including exporters and other vendors.
The Benefits and Detriments to C-TPAT Partnership
While industry participation is voluntary, U.S. Customs and Border Patrol encourages participation through incentives that include:
- Reduced customs inspections;
- Reduced border delays;
- Entitlement to a customs account manager; and
- Account-based processes eligibility.
For most companies, joining C-TPAT is not optional. The reality is that most importers have found that not being C-TPAT certified makes continued operations extremely difficult. The risk of supply-chain disruptions, and an increased number of customs inspections resulting from noncompliance with C-TPAT, is simply cost prohibitive. Border delays cost money.
Moreover, without certification, a company is not eligible for benefit programs such as the Importer Self-Assessment (ISA) program, and more and more companies insist upon doing business only with C-TPAT certified companies. C-TPAT is simply an industry standard at this point.
However, the program is not mandatory and businesses are free to choose not to join.
For companies deciding not to participate in C-TPAT, there is a possibility of increased inspections; increased border waiting time; loss of business from companies who prefer to work with C-TPAT partners; and the potential negative publicity associated with non-compliance.
Joining C-TPAT Is Deceptively Simple
The steps to joining C-TPAT are deceptively simple: first, the company signs an Agreement To Voluntarily Participate (AVP); and second, the company completes a Supply Chain Security Questionnaire. (Both forms are available at the U.S. Customs and Border Patrol website, www.cbp.gov.) These two documents are submitted to US Customs and Border Patrol, and the company is admitted into the partnership upon customs approval. Companies began to receive C-TPAT benefits 60 days after their questionnaire’s approval date.
Successfully joining C-TPAT, however, is much more complex than just completing some paperwork. US Customs, through C-TPAT, requests that companies ensure the integrity of their security systems, as well as verifying the security guidelines of their business partners within the supply chain. Before the application questionnaire can be finalized, the applicant company must thoroughly evaluate its security procedures, as well is its internal security training program, along with its recordkeeping to ensure these all conform to C-TPAT standards.
Moreover, C-TPAT applies not only to the company's internal supply chain, but to the importer’s suppliers of materials, services, and transportation, internally and externally, as well as its brokers, carriers, freight forwarders, and other partners. All must be compliant with C-TPAT guidelines in order for the company’s application to be approved.
Who Can Join C-TPAT?
As for current members, while U.S. Customs does not disclose a company’s participation in the partnership without its consent, Customs does publicize the name of companies that have not requested confidentiality. For those seeking to become members, enrollment for C-TPAT is available for the following businesses involved in import supply chain cargo handling and movement:
- U.S. importers of record;
- Highway carriers (US-Canada; US-Mexico);
- Rail carriers;
- Sea carriers;
- Air carriers;
- US Marine Port Authority -- terminal operators;
- US air freight consolidators, ocean transportation intermediaries, and non-vessel operating common carriers (NVOCC);
- Manufacturers in Mexico and Canada;
- Foreign manufacturers by invitation; and
- Licensed US customs brokers
Fuerst Ittleman Assists in Obtaining C-TPAT Membership
Fuerst Ittleman helps its clientele not only fulfill all the requirements necessary for C-TPAT partnership, the firm also assists companies in the completion and submission of the required Customs documentation, i.e., both the Application and the Questionnaire.
As part of the Application, companies must provide specific corporate information, a supply chain security profile, and sign an acknowledgment and agreement of voluntary participation in the program. As part of the supply chain security profile, the company must conduct a comprehensive self-assessment of their supply chain security procedures using C-TPAT security criteria (available at www.cbp.gov).
The firm works with its clients to develop security criteria and guidelines that not only meet C-TPAT standards, but do so from an effective business standpoint. While C-TPAT is not intended to increase costs for participant companies, compliance with C-TPAT standards may involve significant expense without conscientious and experienced advise and oversight.
Fuerst Ittleman conducts comprehensive, diagnostic audits upon request, evaluating supply chain security procedures and making suggestions for improvement as need be. Fuerst Ittleman also advises on the compliance standards of those working with the company, as well: its brokers, suppliers, carriers and other business partners in the supply chain.
Additionally, the firm works with clients in both establishing and maintaining effective and up-to-date security systems that meet C-TPAT standards. This includes insuring strict background checks and screenings of employees; safeguarding information systems; and establishing standards for the inspection of containers and product.
Validations and Re-Validations
Finally, Fuerst Ittleman represents clients during C-TPAT validations. In 2007, C-TPAT validated 3011 supply chains, 20% of which were re-validations. During this time, C-TPAT removed 112 companies from the program for security breaches, or failure to meet minimum-security criteria, during validation process.
Validations are not audits. Validations usually last 7-10 days; management is then informally given the validation findings during a meeting with Customs representatives. Afterwards, a formal, written Validation Report is prepared and forwarded by the agency.
If the validation findings are satisfactory, the level of benefits provided to the importer increases; however, if the validation reveals weaknesses in the company’s application of C-TPAT criteria, benefits can be suspended or removed until a correction has taken place which has been verified by Customs.
