customs-trade partnership against terrorism (c-tpat) · 2013-01-08 · customs-trade partnership...
TRANSCRIPT
Customs-Trade Partnership Against Terrorism (C-TPAT)
March 3, 2004
Presented byGeorge R. Tuttle, III
George R. Tuttle Law OfficesThree Embarcadero Center, San Francisco
Phone (415) 986-8780Fax (415) 986-0908www.tuttlelaw.com
George R Tuttle Law Offices 2
What is C-TPAT?A voluntary Customs-Trade Partnership intended to facilitate trade while reducing the risk of introduction of terrorists weapons through legitimate channels of trade
George R Tuttle Law Offices 3
C-TPAT was first introduced by Customs Commissioner Bonner at the November 2001 Trade Symposium
Initial program was develop jointly by Customs and the COAC (Commercial Operations Advisory Committee)
Seven Charter Members invited to join in April 2002
Importers, Carriers, Brokers, Forwarders, Consolidators, and other entities invited to join throughout the summer and fall of 2002
As Of March 1, 2003, Customs is a part of the Department of Homeland Security (United States Customs And Border Protection)
About The Program . . .
George R Tuttle Law Offices 4
1816 “C-TPAT Partners”1138 Importers266 Brokers and Consolidators203 Carriers2 Port Authorities/Terminal Operators
418 “Certified Partners” First round of C-TPAT validations begin in March of ‘03
Recent Numbers . . .
George R Tuttle Law Offices 5
How Does It Work?Number 1 objective Of Customs is to ensure the security of all U.S. Ports of entry and prevent the transit of WMD through them
Customs uses a variety intelligence systems and resources to identify shipments and “containers of concern” and divert them to inspections sites for more intensive electronic and/ or physical examination
George R Tuttle Law Offices 6
How Does Cargo Security Work?
Customs rates all cargo on a point scale
The higher the points awarded the greater the risk
“High risk” cargo is subject to electronic and/ or physical examination
Joining CTPAT lowers your score
Customs also has randomly selected cargo examinations
Intrusive exams
Non-intrusive exams (electronic)
George R Tuttle Law Offices 7
How Does Cargo Security Work?
There are many risk factors considered by Customs, including:importer
Exporter/ Manufacturer
Vague commodity descriptions on shipment paperwork
Exports from countries or destinations of concern (Malaysia, Philippines, Pakistan, Indonesia, etc., i.e., countries with high Muslim populations)
Shipments through known trans-shipment ports such as Hong Kong and Singapore
George R Tuttle Law Offices 8
How Does It Work?
Customs’ 24 hr. Container Manifest ruleGives Customs more information on shipments in sufficient time to decide whether to allow carrier to load.
Specific HTS and cargo descriptions are required on manifests or loading will be denied
Similar rules are in effect for air cargo and express consignment shipments
Notification= wheels up or within 4hrs depending on point of departure
Code Orange conditions can increase the number and frequency of cargo exams (up to 400% in San Francisco)
George R Tuttle Law Offices 9
How Does C-TPAT help?
Importers concerned over security or with potential delays caused by shipment examination can become “trusted” partners with Customs
Shipments by importers with a secure supply chain bypass examination process, allowing Customs better use of its resources to examine other cargo
When bypass is not possible, C-TPAT partners receive examine services before non-CTPAT shippers
George R Tuttle Law Offices 10
Other Benefits of C-TPAT
Additional benefits of C-TPAT membership:
Assignment of Customs Account Manager (if one is not already assigned)
Access to the C-TPAT membership list
Eligibility for account-based processing (bimonthly/monthly payments, e. g.) of duties and fees
An emphasis on self-policing, not Customs verifications
Eligibility for participation in Customs’ Importer Self Assessment (ISA) program
Other specific benefits to be assigned on a case-by-case basis
George R Tuttle Law Offices 11
How To Become A Member of C-TPAT
Sign Memorandum of Understanding (MOU) and submit to Customs
Conduct a self-assessment your supply chain security using the C-TPAT security guidelines jointly developed by Customs and the trade community, covering:
Procedural Security
Physical Security
Personnel Security
Education and Training
Access Controls (IT and facilities)
Manifest Procedures, and Conveyance Security
George R Tuttle Law Offices 12
How To Become A Member of C-TPAT
Respond to Customs’ supply chain security profile questionnaire which requests, in executive format, information on your company’s:
Physical & Procedural Security
Employee and visitor screening
Education and Training
Access Controls
Manifest Procedures, and Conveyance Security
Summarize standards for selection of suppliers related to security, production process, and fiscal soundness
Prepare profiles on all “tier 1” suppliers in LSI’s logistics chain
George R Tuttle Law Offices 13
The C-TPAT Application Process
Customs aims to complete an evaluation of the questionnairewithin 30-60 days after it has been submitted
Comments may include
Request for additional information
Request for clarification of facts or process
Recommendations for security enhancements
Generally, an applicant is approved for program unless significant security lapses appear evident or insufficient information is provided
George R Tuttle Law Offices 14
How To Become A Member of C-TPAT
In mutual cooperation with Customs, develop and implement security program enhancements, as needed, in accordance with C-TPAT guidelines and any recommendations by Customs.
Stated intent of Customs is not to impose any security requirements that will be cost prohibitive
C-TPAT Applicants typically find that they already have many of Customs guidelines already in place
Communicate C-TPAT guidelines to unrelated suppliers in the supply chain and work toward building the guidelines into relationships with these companies
George R Tuttle Law Offices 15
C-TPAT Validation Process
Following acceptance, applicant will be subject to an on-site validation process
The purpose is to ensure that the supply chain security measurescontained in the C-TPAT security profile have been implemented and followed
Evaluate the status and effectiveness of security measures in the participant’s profile and make recommendations where appropriate.
C-TPAT validations are not audits. They will be focused, concise, and are to last not longer than ten work days.
Customs will schedule a company’s first validation within approximately three years of the company becoming a C-TPAT certified participant.
George R Tuttle Law Offices 16
C-TPAT Validation Process
Expects to complete 100 validations by the November 2004 Trade Symposium
Customs’ “supply chain specialists” review CTPAT applications and perform validations
Customs to hire and train 40 new “supply chain specialists” during the remaining part of the fiscal year
Customs to have 100 new “supply chain specialists” for fiscal year 2004
George R Tuttle Law Offices 17
What Needs To Be Done to Join?
Step 1: Conduct C-TPAT self-assessment studyPrepare written overview of Company organization, structure, & facilitiesRequest and review any company internal policies, procedures, orguidelines on:
Physical security of facilitiesEmployee and visitor access controls, security, & screeningAny company training or education on security awarenessManifest/ shipment verification proceduresShipping and receiving verification procedureConveyance Security Procedures
George R Tuttle Law Offices 18
What Needs To Be Done?
C-TPAT self-assessment study, cont., Conduct on-site reviews or interviews to verify if policies and procedures are implemented
If specific policies and procedures are lacking, interview appropriate personnel in affected areas or department to determine presence of undocumented practices
George R Tuttle Law Offices 19
What Needs To Be Done?
C-TPAT self-assessment study, cont.,Request and review any internal standards for selection of suppliers related to:
Physical security, production process, and fiscal soundness
George R Tuttle Law Offices 20
What Needs To Be Done?
Step 2: Prepare Profiles on all “tier 1” suppliers (Materials, Goods, & Transit Services)
Name & location of Supplier
Product(s) or services provided
Location of production facilities
Nature of relationship with importer and shipper
Conduct written supply chain security review for major tier 1 providers (Send questionnaire)***
Summary of applicant’s knowledge of supplier’s security procedure (Note: it is not necessary to have completed security review of tier 1 suppliers at time of submission of application)
George R Tuttle Law Offices 21
What Needs To Be Done?
Step 3Prepare questionnaire response based on information gathered in steps 1-3.
Document all information for later review by Customs during the verification process.
George R Tuttle Law Offices 22
Additional Requirements
Profiles and assessments of new suppliers must be completed and communicated to Customs as soon as possible
Company expected to prepare written internal controls and procedures to maintain and evaluate C-TPAT program.
What does company do to report, evaluate and correct any breaches of security?
What does company do to evaluate security risk associate with a new supplier?
George R Tuttle Law Offices 23
George R Tuttle Law Offices 24
Approaching the taskPhase 1
Security assessmentInternalTier 1 suppliers
Preparation of Questionnaire Response
Phase 2Preparation of manual and internal proceduresOngoing reviews
George R Tuttle Law Offices 25
Why Join?The Bottom Line
Does C-TPAT make sense for you?Evaluate your logistics lines. Are you in a “high risk” lane?
What are your current clearance / release times?
How critical is your release time?
Future is unknown, CTPAT is good insurance against possible disruption of supply chain
Avoids some security screening
Speeds up other security that can not be avoided
Enhances view of company as a good corporate citizen
Creates positive business image & relationship with Customs and Customers
George R Tuttle Law Offices 26
Why Join?The Bottom Line
Allows companies to access other “special” Customs programs:
Import Self-assessment (ISA) Program
Eligibility for Account based Processing (ACH) for Customs payments
An Account Manager to assist you with Customs issues
Access to listings of other CTPAT members