inventory of programs and initiatives available to address border delays

strategic transportation

& tourism solutions

Cross-Border Flow Analysis Report 8:

Inventory of Programs/ Initiatives Available to

Address Border Delays

Prepared forIndustry Canada

Prepared byInterVISTAS Consulting Inc.

3 March 2009

Cross-Border Flow Analysis Report 8: Inventory of Programs/Initiatives Available to Address Border Delays

March 3, 2009

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Table of Contents

1. Introduction........................................................................................................................ 1

2. Facilitation Programs........................................................................................................ 2 2.1 Free and Secure Trade (CBP + CBSA)...............................................................................2 2.2 Customs-Trade Partnership Against Terrorism (CBP) ........................................................2 2.3 Partners in Protection (CBSA).............................................................................................3 2.4 Container Security Initiative (CBP, CBSA) ..........................................................................4 2.5 Importer Self Assessment (CBP) ........................................................................................4 2.6 Customs Self Assessment (CBSA) .....................................................................................5 2.7 In-transit Pilot Project (CBSA) .............................................................................................5 2.8 e-Manifest (CBSA) ..............................................................................................................5 2.9 ITDS (U.S.)..........................................................................................................................6 2.10 Other Government Department Single Window Interface (CBSA-led) ................................7 2.11 Business Simplification Initiative (Canada) .........................................................................8 2.12 Automated Commercial Environment (CBP).......................................................................8 2.13 Extensive Expansion of CBP Officer Personnel..................................................................8

3. Other................................................................................................................................... 9 3.1 NEXUS (CBP + CBSA) + GlobalEntry (DHS) .....................................................................9 3.2 Western Hemisphere Travel Initiative (CBP + State) ........................................................10 3.3 RFID-Documents ..............................................................................................................10 3.4 e-Passports .......................................................................................................................11 3.5 US-VISIT ...........................................................................................................................11 3.6 ESTA.................................................................................................................................11

4. Summary .......................................................................................................................... 12


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1. Introduction

Canada and the United States have established a number of programs aimed at reducing the extent of border delays. A number of these are based on modernizing the system for customs processing; other programs are specifically aimed at reducing the amount of delays.

The following report provides an analysis of the effectiveness of available programs and tools, including the Free and Secure Trade (FAST) program, Customs-Trade Partnership Against Terrorism (C-TPAT) and other programs.

The report does not include an assessment of emerging security measures aimed at introducing new requirements. Rather, this report is focused on programs/tools that can improve cross-border logistics.

As a result, this report is organized into two chapters:

Facilitation & Customs Modernization Programs: Any initiative specifically designated to streamline processes or data transmission; and

Other Programs: Programs that are not specifically related to freight or cargo programs, but can benefit cross-border movements or resourcing.


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2. Facilitation Programs

Under the 1995 Shared Border Accord, 2001 Smart Border Action Plan and 2004 Security and Prosperity Partnership, Canada and U.S. have collaborated on joint initiative towards the movement of legitimate trade and commerce. In addition to this, the two countries have developed programs with the objective of with facilitating goods movement across the border.

2.1 Free and Secure Trade (CBP + CBSA)

Free and Secure Trade (FAST) is a voluntary joint initiative between the Canada Border Services Agency (CBSA) and U.S. Customs and Border Protection (CBP) that enhances border and trade chain security while making cross-border commercial shipments simpler and subject to fewer delays. All FAST program participants (drivers, carriers, importers) must undergo a risk assessment.

Effectiveness: High

FAST designation denotes a trusted supply chain to border officers and results in lower inspection rates. A FAST Carrier receives significant benefits from automated license plate reading as well as on-board transponders. This facilitates truck movements to allow for automated user fee collection, rather than having a truck driver remit fees in Secondary.

In addition, FAST truck drivers have access to dedicated lanes (where applicable) for faster, more reliable and efficient border clearance because of traffic streaming (no unprepared trucks in same line to Primary). For southbound movements, FAST/C-TPAT shipments enjoy a reduced e-Manifest transmission minimum cut-off time: half an hour for FAST compared to one hour for non-FAST. For driver identification and citizenship purposes, the card enables faster processing at Primary with the secure credential and is compliant with Western Hemisphere Travel Initiative (WHTI) document requirements. This allows the supply chain to enjoy reduced delivery times and costs of imports while reducing some of the documentation required at CBP Primary.

While FAST has had high effectiveness for U.S.-Canada and Canada-U.S. freight movements, in-transit movement (Canada-Canada via U.S., or U.S.-U.S. via Canada) were not initially programmed into the system and are currently not eligible for FAST usage.

2.2 Customs-Trade Partnership Against Terrorism (CBP)

Voluntary participation in C-TPAT allows U.S. Customs and Border Protection to review security programs of a supply chain and reduce examination ratios. C-TPAT is focused on physical and information technology security of the supply chain in its entirety. Membership is tiered (3 tiers) based on a company's past customs compliance history, validation of its supply chain security profile and utilization of best practices.

Effectiveness: High, but lack of full benefits could encumber future growth


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Although members are subjected to a reduced number of CBP inspections (importers are 4 to 6 times less likely to incur a security or compliance examination) and receive priority processing, there is strong feedback from members that benefits are not fully realized. Future innovations such as a “green lane” concept could further differentiate the process from non-C-TPAT movements.

CBP has looked at increasing the benefits to members. In 2008, a review was undertaken to examine the ratio of examinations by tier of membership for which the results are shown in the figure below.

Figure 1: CBP C-TPAT Import Values, Entries, Exams and Exams by Tier (Jan-Apr 2008)

A new Tier 4 is being developed for C-TPAT; however the cost of voluntary measures is substantial relative to the benefits of fewer exams.

2.3 Partners in Protection (CBSA)

Similar to C-TPAT, CBSA’s Partners in Protection (PIP) enlists the cooperation of industry to enhance border and trade supply chain security, to combat organized crime and terrorism and to help detect and prevent contraband smuggling. Through a voluntary program of security standards throughout the supply chain, PIP is designed to protect the end-to-end logistics method – from factory to warehouse and carrier. Registration in FAST is a pre-requisite for members of PIP.

Effectiveness: Medium

PIP has been proven to be of benefit to industry but has not realized its full compliment of benefits. In addition, although Canada and the U.S. committed in 2007 for improved interoperability of PIP and C-TPAT, this has not come fully to fruition. It is very important that, in the future, PIP and C-TPAT are recognized as interchangeable so that both may use FAST lanes.


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2.4 Container Security Initiative (CBP, CBSA)

U.S. Customs and Border Protection created the Container Security Initiative (CSI) with three core elements: Identify high-risk containers. Automated targeting tools identify containers that pose a potential

risk for terrorism based on advance information and strategic intelligence. Pre-screen and evaluate containers before they are shipped. Containers are screened as early

in the supply chain as possible, generally at the port of departure. Use technology to pre-screen high-risk containers to ensure that screening is performed

rapidly without slowing down the movement of trade. This technology includes large-scale x-ray and gamma ray machines and radiation detection devices. It is a multinational initiative that protects the main method of global trade, containerized shipping, from being exploited or disrupted by terrorists. It is designed to safeguard global marine trade while enabling legitimate cargo containers to move faster and more efficiently through the supply chain to seaports worldwide.

In June 2002, the World Customs Organization unanimously passed a resolution that will enable ports in all 161 of the member nations to begin to develop programs along the CSI model. In October 2005, the CBSA signed a CSI partnership arrangement with U.S. Customs and Border Protection. The CBSA has also been conducting outreach activities to encourage other countries to partner with Canada on container security.

Effectiveness: High

As of 2008, 58 ports participate, processing 86% of all containers imported into the U.S. CSI has effectively “pushed the border out” for most of the container traffic going into United States. This success has allowed for more effective risk management overseas, and contributed to reducing the amount of delays for legitimate container movements. Continued bilateral reciprocity will benefit Canada, U.S. and other countries.

2.5 Importer Self Assessment (CBP)

Importer Self Assessment (ISA) is a voluntary approach to trade compliance. The program provides the opportunity for importers who have made a commitment of resources to assume responsibility for monitoring their own compliance in exchange for benefits. These benefits include less CBP oversight based on an ongoing reporting relationship with CBP as well as a waiver of penalties.

To be eligible for ISA, an importer must be an advanced member of C-TPAT with a high level of compliance, must be a resident importer in the United States, and must have two years of importing experience prior to the date the importer applies to the program. The importer conducts self-testing for compliance reporting as well as periodic audits. There are no fines for ISA for voluntary problem correction.

Effectiveness: High


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ISA is a program built upon C-TPAT but directed to importers and can help streamline border movements on the consignee part of the supply chain.

2.6 Customs Self Assessment (CBSA)

Customs Self Assessment (CSA) is a Canadian Border Services Agency program that enables streamlined accounting and payment processes for all imported goods. To be eligible for CSA, carriers and importers must be pre-approved as a low-risk operator and transport CSA-eligible goods. Eligible goods are classified as those that are imported directly from the U.S. and automotive goods from Mexico that are being shipped to an importer who is a vehicle manufacturer in the automotive industry. Currently, membership includes over 50 importers and 800 carriers and is available for use at 20 Canada/U.S. border crossings.

Effectiveness: Medium

CSA has proven to be a valuable program for CBSA and industry alike; however growth of members is limited by the extensive rework of internal systems required for participants. For CBSA, this program has proven useful in terms of focusing resources to shipments that present a greater risk. Future program changes could deal with increasing these benefits, including reducing or removing fines for voluntary reports of non-compliance. For example, CSA participants are also encouraging CBSA to consider expanding the program to offshore and Mexican goods on a transactional basis.

2.7 In-transit Pilot Project (CBSA)

CBSA has established an automated pilot project for carriers that transport goods on a cross border route solely for the logistics function rather than end-use of the good. In-transit routes are those that transport domestic goods across the Canada/U.S. border but are only intended for domestic use. Participating carriers are required to send advance data and attach a seal to the truck when it has crossed the border to ensure the truck is not unloaded while travelling across the border. Carriers and shippers can realize significant benefits through the ability to travel a shorter route or have a number of travel alternatives without having to unload the goods.

Effectiveness: Major when operational

The in-transit pilot project has proven to be of limited value to carriers to date due to the tight restrictions accompanying participation. Participating carriers are required to be members of CSA to haul trailers. Candidate companies are being selected for the pilot to begin.

2.8 e-Manifest (CBSA)

The Advance Commercial Information (ACI) program was created in April 2004 and requires carriers to submit electronic pre-arrival cargo information so a pre-inspection process can be undertaken before they arrive at the border. Phase III of the program, e-Manifest, will expand ACI to include all highway and rail shipments over a planned 5 year staged implementation.


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ACI and Electronic Data Interchange (EDI) provide pre-screening opportunities for carriers and importers not participating in CSA or FAST. CBSA realizes direct benefits due to its ability to focus personnel/resources on risk management as opposed to data capture. As of April 2008, EDI was utilized for over 90% of invoices requiring 100 invoice lines.

Effectiveness: Emerging Initiative

2.9 ITDS (U.S.)

The International Trade Data System (ITDS) supports the implementation of Automated Customs Environment (ACE) as an integrated trade database and processing infrastructure that enables importers to submit the appropriate data. As the result of a presidential directive, ITDS was made mandatory for all Participating Government Agencies (PGAs).

There are 267 unique fields requested by U.S. agencies and departments for goods movement entering the U.S. The large majority (185) are requested by U.S. CBP but there are 43 other departments/agencies seeking information.

The following two charts highlight the overlap between CBP-requested fields versus potential other participating government agency requirements.

It is noted that the number of fields is growing at a rate of about 5 a year on average.

Number of Fields Required for Import to U.S. by Participating Government Agency

183185

6577

142185

108107

5244

10996

29129

46168

182129

85106

115168

94179

98

0 20 40 60 80 100 120 140 160 180 200

Agricultural Marketing Service

Animal and Plant Health Inspection Service

Bureau of Alcohol, Tobacco, Firearms, and Explosives

Bureau of Labor Statistics

Bureau of Transportation Statistics

Customs and Border Protection

Census Bureau

U.S. Environmental Protection Agency

Federal Aviation Administration

Federal Communications Commission

Food and Drug Administration

Federal Motor Carrier Safety Administration

Federal Maritime Commission

Food Safety and Inspection Service

U.S. Foreign-Trade Zones Board

U.S. Fish and Wildlife Service

Import Administration

Internal Revenue Service

US International Trade Commission

Maritime Administration

National Highway Traffic Safety Administration

National Marine Fisheries Service

Office of Foreign Assets Control

Alcohol and Tobacco Tax and Trade Bureau

U.S. Army Corps of Engineers


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Percentage Overlap with CBP for Fields to Import to U.S.

74%75%

78%88%

68%100%

86%85%

92%100%

86%82%

66%82%

93%70%

82%81%

99%71%

89%76%

73%72%71%

Agricultural Marketing Service

Animal and Plant Health Inspection Service

Bureau of Alcohol, Tobacco, Firearms, and Explosives

Bureau of Labor Statistics

Bureau of Transportation Statistics

Customs and Border Protection

Census Bureau

U.S. Environmental Protection Agency

Federal Aviation Administration

Federal Communications Commission

Food and Drug Administration

Federal Motor Carrier Safety Administration

Federal Maritime Commission

Food Safety and Inspection Service

U.S. Foreign-Trade Zones Board

U.S. Fish and Wildlife Service

Import Administration

Internal Revenue Service

US International Trade Commission

Maritime Administration

National Highway Traffic Safety Administration

National Marine Fisheries Service

Office of Foreign Assets Control

Alcohol and Tobacco Tax and Trade Bureau

U.S. Army Corps of Engineers

Effectiveness: High, future potential will grow upon completion

ITDS has already reduced challenges associated with multiple electronic portals for U.S. government agencies. For industry, ITDS reduces the administrative burden that carriers realize through duplicative reporting requirements as well as the elimination of paper processing in favour of online reporting mechanisms. The consolidated database provides a more complete database of information and records leading to a faster and more efficient release of cargo.

2.10 Other Government Department Single Window Interface (CBSA-led)

The OGD Single Window Interface is a joint initiative between the Canada Border Services Agency and other government departments (OGDs) and agencies wishing to receive release information electronically on commercial import data. OGD is currently soliciting industry participants to test the system.

Effectiveness: Low, but emerging

OGD is not as advanced as its U.S. equivalent, ITDS. It could reduce the administrative burden placed upon importers to conduct multiple reporting tasks across government agencies. OGD provides the ability for a consistent treatment of imports with Canadian Food Inspection Agency (CFIA) requirements. However OGD, as it is currently designed, does not provide industry with the same benefits as is realized by the International Trade Data System that is in place for U.S. PGAs.


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2.11 Business Simplification Initiative (Canada)

CBSA is participating in the government-wide Business Simplification Initiative (BSI) and its ongoing effort to reduce administrative burdens on businesses to make it easier, less costly and time consuming for businesses to comply with federal requirements.

Effectiveness: High

BSI aims to eliminate obsolete, non-essential and duplicative requirements. It revises complex policies and forms so that they are clear and easier to use, understand and comply with. After a review of CBSA requirements imposed on industry, 1600 requirements were identified as candidates to be reduced as part of the program.

2.12 Automated Commercial Environment (CBP)

Automated Commercial Environment (ACE) is the commercial trade processing system being developed by U.S. Customs and Border Protection to facilitate trade while strengthening border security. The ACE Secure Data Portal, essentially a customized web page, connects CBP, the trade community and participating government agencies by providing a single, centralized, online access point for communications and information related to cargo shipments.

Effectiveness: High, but still early in release phases

Deployed in phases, ACE will be expanded to provide cargo processing capabilities across all modes of transportation and will replace existing systems with a single, multi-modal manifest system for land, air, rail and sea cargo. Future releases will result in further automation of entry summary processing and enhanced account management features through 2012. ACE would realize its greatest effectiveness if it is linked into the ITDS framework and the CBP Automated Commercial System (ACS).

2.13 Extensive Expansion of CBP Officer Personnel

Although not necessarily a facilitation measure, CBP has significantly boosted its complement of land border officers. For example, CBP hosted job fairs across the country in January 2009 as part of an initiative to hire 11,000 new employees. This initiative allows existing Primary booth infrastructure to be fully operational during high traffic periods. Some industry participants cite that the large number of new officers tends to lead to increased inspections; although, there is acknowledgement that a much greater effort on facilitation has occurred in recent years.

Effectiveness: High, depending on the focus of new officers


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3. Other

3.1 NEXUS (CBP + CBSA) + GlobalEntry (DHS)

NEXUS is a bi-national (Canada-U.S.) program that facilitates processing of pre-approved low risk travellers at Canada/U.S. land, air and water border crossings. Participation in NEXUS requires the applicant to be of a citizen or permanent resident of Canada or the U.S. and to have lived in either country continuously for three years prior to application. With over 300,000 members currently participating, NEXUS enhances the crossing experience for members and enables CBSA and CBP to dedicate further resources to higher-risk travellers. It is not directly related to goods movement, but can assist in streamlining flows of goods to the border. Often, trucks are delayed on the border as a result of private vehicles obstructing the route to FAST or non-FAST truck lanes.

Above: Truck and Vehicle Lines on Peace Bridge on a statutory holiday (Feb 16, 2009)

Should NEXUS membership increase, it will be an even greater benefit for goods movement.

In June 2008, CBP launched the Global Entry program to facilitate the processing of trusted travellers returning to the U.S. to make their customs declarations. As of December 2008, U.S. citizens or permanent residents that are a NEXUS or SENTRI member were eligible for a free


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registration process for Global Entry. Upon registration, the trusted traveller will be eligible to use the Global Entry Kiosks in the United States until the expiration date of their respective NEXUS or SENTRI membership. This does not include Canadian citizens or permanent residents that are NEXUS members. The decision to waive the enrolment fee and enable an easier application process provides trusted travellers with greater access to the selection of programs offered by CBP for expedited border processing.

3.2 Western Hemisphere Travel Initiative (CBP + State)

The Western Hemisphere Travel Initiative (WHTI) requires all travellers to and from the United States, Canada, Mexico, the Caribbean and the British Overseas Territory of Bermuda to present a passport or other document that denotes identity and citizenship when entering or re-entering the United States.

WHTI facilitates entry for U.S. Citizens and legitimate foreign visitors, while strengthening U.S. border security. WHTI will go into effect June 1, 2009 for land and sea travel into the United States. WHTI went into effect for air travellers on January 23, 2007.

Although there are sizable concerns about market access and tourism concerning WHTI implementation, public awareness and costs of compliance, there is a major facilitation benefit of this initiative. Prior to WHTI, CBP inspectors needed to differentiate between hundreds of different document types (birth certificates from states/counties, driver licenses from provinces/states). With increased standardization and new RFID technologies, CBP is anticipating greater efficiency for document checks and potential alleviation of traffic congestion at borders.

3.3 RFID-Documents

3.3.1 Enhanced Driver’s Licenses (EDL)

The Insurance Corporation of British Columbia (ICBC), BC provincial and federal government have developed an enhanced driver’s license (EDL) which provides the holder with proof of permit to drive as well as citizenship. As a result, the holder may use their driver’s license in favour of a passport when crossing the border into the U.S. at select land and water border crossings. This program is currently being piloted in British Columbia for 521 qualified volunteers but plans to expand to Canadian citizens throughout the province. MOUs are being signed with DHS to introduce EDLs by Ontario, Manitoba and Quebec.

The enhanced driver’s licenses have a Radio-Frequency Identification (RFID) chip embedded in them that enable CBP to receive the travellers first and last name, birth date, gender, citizenship, EDL expiration date, digital image (photograph), EDL status, and EDL issuing province. No personal data is embedded in the card’s chip data. Personal driving records are not disclosed to CBP.


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3.3.2 PASS Card

Since fall 2008, the Department of Homeland Security has been issuing Passport Card’s (a.k.a PASS Card) to pre-screened U.S. citizens. The PASS Card is an acceptable proof of identity and citizenship as per the terms of the Western Hemisphere Travel Initiative (WHTI) for land and water border crossings. A passport is still required for transborder air travel.

RFID documents like Enhanced Driver’s Licenses and PASS Cards can assist to facilitate private cars at border crossings. This will, in turn, improve the ability for trucks to get quicker access to CBP Primary.

3.4 e-Passports

e-Passports are similar to the traditional passport with the addition of a computer chip (i.e. integrated circuit) that stores digitally encoded data accessible only by the appropriate border processing authority. The chip securely stores the same data that can be found on the photo page of the passport, and additionally includes a digital photograph. The inclusion of the digital photograph enables biometric comparison, through the use of facial recognition technology, at international borders.

e-Passports will allow improved security features for entry to the United States. While not immediately facilitative in results, e-Passports could allow improved resource utilization to combat identity fraud.

3.5 US-VISIT

The U.S. Department of Homeland Security developed the US-VISIT program to enhance secure processing measures for travellers requiring a visa to enter the U.S. A U.S. visa-issuing location will collect digital copies of the travellers’ fingerprints and photograph. These are then checked against pre-screening databases and validated with the biometrics provided by travellers upon their arrival at their respective U.S. port of entry. The application of biometric data provides the DHS with enhanced abilities to verify and validate the identity visa requiring travellers, thus reducing the amount of resources spent combatting visa fraud.

3.6 ESTA

Effective January 2009, all travellers from participating countries of the U.S. Visa Waiver Program have been required to register online with the Electronic System for Travel Authorization (ESTA) prior to entering the United States. The Travel Authorization does not replace a visa, nor should travellers outside of the VWP register with ESTA. The online registration replaces the former paper based I-94W form and is valid for 2 years of multiple entries. Should travellers not be granted approval through ESTA, they will be required to apply for a B-1 Visitor Visa or B-2 Tourist Visa, which could take weeks or months.


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4. Summary

The Canadian and U.S. governments have been proactive in developing programs and initiatives to address the complicated and burdensome requirements involved with trade and travel across the Canada/U.S. border. However, as identified above, specific aspects of these programs and initiatives can still be enhanced to provide maximum benefit to industry while recognizing the security concerns of both governments. The table below depicts the current success to date that has been realized by the programs and initiatives:

Program/Initiative Success To Date Fast and Secure Trade (CBP + CBSA) High Customs-Trade Partnership Against Terrorism (CBP) High Partners in Protection (CBSA) Medium Container Security Initiative (CBP) High Importer Self Assessment (CBP) High Customs Self Assessment (CBSA) Medium, but limited by

participants In-transit Movement Pilot (CBSA) High, when implemented e-Manifest (CBSA) Emerging ITDS (U.S.) High, but strong potential

upon full implementation Other Government Department Single Window Interface (CBSA-led)

Low, but emerging

Business Simplification Initiative (BSI) High Automated Commercial Environment (CBP) High Additional new officers (CBP) High, depending on the

focus of new officers

Prepared by InterVISTAS Consulting Inc.

Airport Square – Suite 550 1200 West 73rd Avenue

Vancouver, BC Canada V6P 6G5

Telephone: 604-717-1800 Facsimile: 604-717-1818

www.intervistas.com