Monday, June 28, 2010

Korea, U.S. Sign Mutual Recognition Arrangement at World Customs Organization

Brussels – U.S. Customs and Border Protection today signed a mutual recognition arrangement with the Korean Customs Service today at the 115th/116th Session of the World Customs Organization Council in Brussels, Belgium. The arrangement aligns security standards in international trade partnership programs, also known as Authorized Economic Operator programs, critical to both countries.

"Opportunities to secure our borders are aggressively being identified on an ongoing basis through our partnerships and collaboration efforts. Building upon these relationships will be at the forefront of our priorities and strategies,” said CBP Commissioner Alan Bersin.

The Commissioner of the Korean Customs Service, Young sun Yoon, and U.S. Customs Border Protection Commissioner Alan Bersin agreed to mutual standards in Korea’s Authorized Economic Operator program and the U.S.’s Customs-Trade Partnership Against Terrorism program (C-TPAT).

The arrangement recognizes compatibility between the Korean and U.S. cargo security programs and acknowledges that KCS and CBP will accept the security status of members of the other program. Additionally, it will allow for closer collaboration between agencies and greater benefits and common standards to the trade community. This marks the fifth mutual recognition arrangement signed by the U.S., with previous arrangements signed with New Zealand, Canada, Jordan and Japan.

Mutual recognition is a key concept within the World Customs Organization’s SAFE Framework of Standards to Secure and Facilitate Global Trade, established with the input of the U.S. in 2005 in order to promote end-to-end supply chain security and facilitation at a global level. Similarly, the integration of border security and trade facilitation is an essential part of Commissioner Bersin’s vision for a layered risk management and risk segmentation strategy, which extends security beyond our physical borders.

Source: U.S. Customs and Border Protection

Wednesday, June 23, 2010

Customs-Trade Partnership Against Terrorism
Mutual Recognition

Mutual Recognition (MR) refers to those activities associated with the signing of a document between U.S. Customs and Border Protection (CBP) and a foreign Customs Administration that provides for the exchange of information. The document, referred to as an “arrangement”, indicates that the security requirements or standards of the foreign industry partnership program, as well as its validation or audit procedures, are the same or similar with those of the C-TPAT program.
The essential concept of MR is that C-TPAT and the foreign program are compatible in both theory and practice so that one program may recognize the validation findings of the other program. Mutual Recognition as a concept is reflected in the World Customs Organization’s Framework of Standards to Secure and Facilitate Global Trade, a strategy designed with the support of the United States so that Customs administrations work together to improve their capability to detect high-risk consignments and expedite the movement of legitimate cargo. Through MR, international industry partnership programs are linked so that together they create a unified and sustainable security posture that can assist in securing and facilitating global cargo trade. It means end to end supply chain security based on program membership.

The C-TPAT mutual recognition process involves four (4) phases:
1. A side-by-side comparison of the program requirements. This is designed to determine if the programs align on basic principles.
2. A pilot program of joint validation visits. This is designed to determine if the programs align in basic practice.
3. The signing of a mutual recognition arrangement. All four MR Arrangements signed by CBP have been signed at the World Customs Organization’s Headquarters in Brussels.
4. The development of mutual recognition operational procedures, primarily those associated with information sharing.

Key Facts About Mutual Recognition….
• Mutual Recognition Arrangements are only based on security. Arrangements do not address Customs compliance issues.
• Mutual recognition can only occur to the extent permitted by law, regulations, and is subject to national security considerations.
• Mutual Recognition does not exempt any partner, whether domestic or foreign, from complying with other CBP mandated requirements. By the same token, mutual recognition does not replace any of CBP’s cargo enforcement strategies. Importers, for instance, still need to comply with the importer security filing requirements; they are still required to submit to CBP electronically and 24 hours prior to lading the 10 trade data elements required under this mandate.
• Finally, CBP has developed guidance for maintaining the continuity and/or restoring the flow of trade across the Nation’s borders during and after an incident that disrupts the flow of trade at the border ports of entry. Business resumption privileges consideration, however, while envisioned for C-TPAT members, is not a factor that is included in any mutual recognition arrangement.

Current Status:
As of January 2010, four Mutual Recognition Arrangements have been signed by CBP:
• June 2007 – New Zealand Customs Service’s Secure Export Scheme Program.
• June 2008 – Canada Border Services Agency’s Partners in Protection Program.
• June 2007 – Jordan Customs Department’s Golden List Program.
• June 2009 – Japan Customs and Tariff Bureau’s Authorized Economic Operator Program.

CBP is also currently working with the following Customs Administration with the goal of reaching MR:
• Korean Customs – Authorized Economic Operator Program
• Singapore Customs - Secure Trade Partnership Plus Program
• European Union – Authorized Economic Operator Program

Before CBP engages a foreign Customs Administrations towards mutual recognition, three pre-requisites must be met:

1. The foreign Customs Administration must have a full fledged operational program in place –i.e. not a program in development or a pilot program.

2. The foreign partnership program must have a strong validation process built into its program.

3. The foreign partnership program must have a strong security component built into its program.

Benefits - Some of the benefits envisioned by an MRA include:
Efficiency: C-TPAT does not have to expend limited resources to send its staff overseas to validate a facility that has been certified by a foreign partnership program.
Risk Assessment Tool: The status of the foreign partnership program participant is recognized by C-TPAT and it is used as a risk-assessment factor. A C-TPAT validation visit will be conducted on a different segment of the C-TPAT importer’s supply chain.
Less Redundancy/Duplication of Efforts: Foreign companies do not have to go through two separate validation visits: the first one conducted by the local Customs administration as the company is initially certified by its business partnership program followed by the one that C-TPAT would have to conduct if no MRA was in place. Moreover, companies only have to go through one revalidation visit in the future.
Common Standard/Trade Facilitation: Companies only have to conform to one set of security requirements. Avoiding the burden of addressing different sets of requirements as a shipment moves through the supply chain in different countries facilitates international trade. Since C-TPAT’s minimum security criteria has become the world’s standard, once a company complies with C-TPAT’s criteria, that company essentially complies with the security criteria of those countries the U.S. has reached MR with: Japan, Canada, New Zealand, and Jordan. Finally, since MR is based on having equally stringent minimum security criteria, companies will have an easier task when they have to conduct and document their security self-assessments.
Transparency: Closer collaboration among Customs Administrations and between Customs administrations and their partnership program companies should lead to more transparency in international commerce. Similar security platforms and the exchange of information between all of these partners expedite and facilitate the movement of commerce across nations.

For more information on C-TPAT, please contact us at

Tuesday, June 22, 2010

C-TPAT Validation Process Fact Sheet

C-TPAT Validation Process Fact Sheet

I. Introduction
The Customs-Trade Partnership Against Terrorism (C-TPAT) program is U.S. Customs and Border Protection’s (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. C-TPAT requires the trade company participant to document and validate their supply chain security procedures in relation to existing CBP C-TPAT criteria or guidelines as applicable. CBP requires that C-TPAT company participants develop an internal validation process to ensure the existence of security measures documented in their Supply Chain Security Profile and in any supplemental information provided to CBP. As a part of the C-TPAT process, CBP C-TPAT Supply Chain Security Specialists (SCSS) and the C-TPAT participant will jointly conduct a validation of the company’s supply chain security procedures. The validation process is essential to verifying the company’s commitment to C-TPAT.

II. 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. The validation team evaluates the status and effectiveness of key security measures in the participant’s profile to make recommendations and recognize best practices where appropriate.

III. Validation Principles
The guiding principle of the C-TPAT program is enhancing and ensuring supply chain security though a government-industry partnership. The C-TPAT program is voluntary and designed to share information that will protect the supply chain from being compromised by terrorists and terrorist organizations. 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. Throughout the process there will also be the opportunity to discuss security issues and to share “best practices” with the ultimate goal of securing the international supply chain.
C-TPAT validations are not audits. In addition, they will be focused, concise, and will last not longer than ten working days.
Based on the participant’s C-TPAT security profile and the recommendations of the validation team, Headquarters will also oversee the specific security elements to be validated.

IV. Conducting a Validation

A. Validation Selection Process
To ensure accuracy, the security profiles of C-TPAT participants will be validated. 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.

B. Validation Teams
A validation team consisting of C-TPAT SCSS and a representative(s) of the C-TPAT participant will conduct the C-TPAT validation visits.
SCSS on a validation team is composed of trained CBP specialists knowledgeable in international supply chain security matters. SCSS receive supply chain security training to assist them in working with industry representatives to promote effective supply chain security programs.
Generally, the lead SCSS performing the validation will be the company’s assigned C-TPAT representative responsible for the reviewing and assessing the company’s security profile and other accessible information to determine the scope of the validation. This will help ensure that the validation is effective, focused, and limited in duration.

C. Validation Procedures
The SCSS validation team leader will provide the company with a written notification of the scheduled validation. The notice will be issued at least thirty days prior to the start of the validation and will include a request for supporting documentation or materials, if any. The validation team leader will also contact the C-TPAT participant to establish a single point of contact at the corporate level.
Prior to the commencement of the validation, the C-TPAT SCSS team will review the participant’s C-TPAT security profile, any supplemental information received from the company, and any CBP headquarters instructions, to determine the intended scope of the validation.
In preparation for the validation, the validation team may also consider specific C-TPAT security criteria and guidelines. The security criteria and guidelines are used to determine the sufficiency of specific aspects of a participant’s C-TPAT security profile. It is understood that the criteria and guidelines are not inclusive with respect to effective security practices.

D. Validation Venue
Under normal circumstances, the validation will begin with a briefing of C-TPAT participant company officials via phone or at the company’s primary U.S. office location. The validation team will discuss the participant’s role in the C-TPAT program. The validation team will also focus on the scope of the validation including validation visit locations throughout the companies international supply chain. If additional information is required to validate a portion of a C-TPAT participant’s supply chain, the validation team will coordinate the required request with the company officials.

E. 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.

F. 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.
Source: US Customs and Border Protection

C-TPAT: Program Director outlines State of the Program

During the 2010 C-TPAT Seminar in Anaheim, CA. Mr. Bradd M Skinner, Director of C-TPAT/Industry Partnership Programs outlined the following State of the Program

2009 Accomplishments
•Exceeded its target of 3,200 validations for the year by conducting 3,422 validations involving 4,131 physical site visits.

•Performed the field work and testing necessary to allow CBP to proceed with the signing of a mutual recognition arrangement with the Government of Japan

•Initiated several strategies to harden supply chains coming from Mexico

•Issued an updated and enhanced version of its Best Practices catalog

•Conducted the first annual Northern Border Highway Carrier conference and four hands-on Southwest Border workshop sessions both of which were in addition to carrying out the Annual C-TPAT conference and more than 90 outreach sessions for stakeholders throughout the world.

C-TPAT Validation Goal
•Revalidation all Mexico Highway Carriers

•Accelerate Revalidations of certain higher risk Mexico Manufacturers

•Revalidate importers, carriers and manufacturers on a 3 year cycle, all other sectors every four years

•Move Tier 3 importers to a 4 year revalidation cycle

•Establish an Internal Evaluation and Assessment Branch

•Supply Chain Security Specialist and CBP officials with extensive field experience

•Achieve consistency, uniformity and streamline processes throughout the program

•Deficiencies are identified, ensuring corrective actions take place to strengthen the program

International Outreach
•Mutual Recognition Arrangements:
New Zealand, Jordan, Canada, Japan

•Technical Assistance Projects:
Malaysia, Mexico, Philippines, Guatemala, China, Colombia, Israel, Ghana, Kenya, Taiwan

•Mutual Recognition Projects:
Argentina, Singapore, Korea, European Union

C-TPAT / Non-C-TPAT Exam
Comparisons (FY09)
•1 out of every 23 sea containers examined (Overall)
•1 out of every 3.3 trucks examined (Overall)
•1 out of every 38 C-TPAT sea containers examined
•1 out of every 8 Non-C-TPAT sea containers examined
•1 out of every 5.36 C-TPAT Trucks examined
•1 out of every 1.24 Non-CTPAT Trucks examined
•Tier 1: 1.99 times less likely to be examined
•Tier 2: 3.71 times less likely to be examined
•Tier 3: 7.26 times less likely to be examined
•C-TPAT importers are examined on Average 4.31 times less than Non-C-TPAT