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CBP Considering Expansion of C-TPAT Benefits, Participation

Wednesday, November 20, 2013
Sandler, Travis & Rosenberg Trade Report

A month after a Congressional Research Service report speculated that participation in the Customs-Trade Partnership Against Terrorism may have peaked, U.S. Customs and Border Protection officials and industry representatives indicated that they are moving ahead with efforts to expand the program’s benefits and participants. Of particular note are the development of Portal 2.0 and preparations to extend C-TPAT to exports.

(The following information was reported by CBP and the Trusted Trader Subcommittee of the Advisory Committee on Commercial Operations of CBP (COAC) prior to a Nov. 15 COAC meeting.)

Portal 2.0. CBP has been working to develop the next generation of the C-TPAT online portal (Portal 2.0), and a pilot test involving 40-50 C-TPAT partners testing the new software is expected in the near future. CBP states that it is aware of the need for non-member service providers to have the ability to verify C-TPAT membership and that this requirement was slated for inclusion in Portal 2.0. CBP is in the process of finalizing the parameters for included data elements and partner disclosure, and the Office of Chief Counsel is reviewing the requests for changes to the current Status Verification Interface system.

Exports. As part of its effort to expand C-TPAT into a broader authorized economic operator-type program, CBP is working with industry members and other government stakeholders to establish the eligibility requirements and criteria that will allow exporters to participate in C-TPAT. CBP presented to the COAC Trusted Trader Subcommittee a pre-decisional draft on this issue in September, but the subcommittee’s response indicates that much work remains before these elements will be finalized. The subcommittee produced more than 125 specific and substantive comments and offered the following observations.

- CBP’s draft includes many regulatory requirements that are already mandated under various agency regulations, but since C-TPAT is a voluntary program, the scope of the minimum security criteria should be limited to those requirements that are not already mandated by the regulations.

- The purpose of the C-TPAT exporter certification should be to facilitate exports. However, the minimum security criteria as listed are difficult to meet and do not seem to reduce the regulatory burden on exporters nor provide synergies with import destinations to expand business. The overall goal of the program is not clear.

- The requirements for C-TPAT exporter certification should be based on existing AEO programs.

- The program must accommodate existing legitimate supply chain practices that are accepted and standard methods of doing business and should therefore not be disregarded or identified as risky. In this vein, the International Chamber of Commerce’s “Guidelines for Cross-Border Traders in Goods” could serve as guidance for the development of a C-TPAT export program that would be recognized by foreign customs authorities. CBP officials speaking at the COAC meeting indicated a willingness to listen on this topic and said they want a C-TPAT export component to cause as little trade disruption as possible.

Enhancements. CBP officials said the agency is considering allowing highway carriers to achieve C-TPAT Tier III status, a proposal supported by the majority of program members, and is very close to proposing to expand participation to foreign-trade zones. The COAC Trusted Trader Subcommittee said that over the next few months it will examine the feasibility of expanding C-TPAT to also include domestic transportation hubs and additional foreign manufacturers.

Mutual recognition. Officials said efforts to conclude mutual recognition arrangements between C-TPAT and the AEO programs of Mexico and China are moving quickly and could be wrapped up in 2014. A subcommittee report adds that an MRA with Israel could be finalized in December. CBP has begun providing technical assistance to help India and Brazil develop AEO programs, with an eye toward eventual MRAs with those countries as well.

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