gaining benefits from a trusted trader program (e.g. ctpat) · 2019-07-23 · u.s. customs &...
TRANSCRIPT
Gaining Benefits from a Trusted Trader Program
(e.g. CTPAT)
Monday, July 29, 2019
1:15 - 2:45 p.m.
Panelists
Allen GinaCT Strategies
(202) 629-5199 [email protected]
Karen LobdellThomson Reuters
(704) 576 3678 ext. [email protected]
Beth PrideBPE Global
(415) [email protected]
Agenda
• History of the Program
• Status of Trusted Trader Programs
• Portal Update
• Rollout of New Minimum Security Criteria
• Benefits of Participation
• Real-life Validation Examples
• Best Practices
• Q&A
History of Trusted Trader Programs
U.S. Customs Service (USCS) Programs
1980/1990
1980
➢ Carrier Initiative Program (CIP)
➢ Super Carrier Initiative Program (SCIP)
1990
➢ Americas Counter Smuggling Initiative (ACSI)
➢ Land Border Carrier Initiative Program (LBCIP)
➢ USCS/Private Sector Partners Against Drugs (PAD)
➢ USCS/Private Sector Business Anti-Smuggling Coalition (BASC)
➢ Business Alliance for Secure Commerce (BASC)
U.S. Customs & Border Protection (CBP) Programs - 2000/2010 and Beyond
2000
➢ Customs-Trade Partnership Against Terrorism (C-TPAT)
➢ Importer Self-Assessment (ISA)
➢ World Customs Organization (WCO) Framework for Standards to Secure and
Facilitate Global Trade (SAFE Framework)
➢ WCO Authorized Economic Operator (AEO)
➢ Mutual Recognition Arrangements (MRAs)
2010
➢ Authorized Economic Operator (AEO) Programs
➢ Mutual Recognition Arrangements (MRAs)
The New Risk Reality• Cocaine seizure on a major vessel carrier in June 2019
• Largest seizure in history – 7 containers, 15,000 bricks, 20 tons, value $1bn plus over $56K in currency
• Immediate suspension from CTPAT program
• 6 crew members arrested and federally charged
• July 4th, warrant issued, vessel is seized, potential for civil forfeiture
• $10 mill security deposit; $40 mill surety bond posted by carrier
• Civil penalties estimated at about $640 mill - a liability that will be carried on the books
• Civil penalty mitigation – you must demonstrate you are an “active” member of the program!
Current Status of Trusted Trader Programs
• Global expansion continues. As of July 2018:
– 169 of 182 WCO members have signed Letters of Intent
– 77 Operational programs
– 17 AEO programs preparing to launch
– 31 Operational Customs Compliance programs
– 2 Customs Compliance programs to launch
– 57 Mutual Recognition Agreements (MRA) concluded; 35 under negotiation (4 are plurilateral)
Current Status of the CTPAT Program
• Some CTPAT statistics:
– 11,500 + members
– 53% of US imports (by value) with CTPAT members
– 2,250 (re)validations in 2018, still having challenges in CN and MX
– 12 MRAs
– 120 revocations (2018)
• Primary reason was failure to complete self assessments
– 96 suspensions (2018)
CTPAT Program: Trusted Trader Strategy
Non-participant in CTPAT
But consistently low risk importers and exporters
The Timelines
C-TPAT Portal
Portal Enhancements
New Portal Capabilities• “Trade Compliance” Portal will:
– Allow Trade Partners (Importers) to electronically transmit Trade Compliance Information
– Automate the process of information review/approval process between Trade Partners and CBP
– Provide seamless integration with CTPAT Security Portal while securely sharing the information across the two programs
– Use Multi Channel System Architecture (MCSA) framework
– Improve user experience for all trade partners; users will be benefited irrespective of their sizes and complexity in their business processes
• Phase I objective:
– Offer capability for Trade Partners to Electronically transmit Trade Compliance Application / Annual Notification Letter to CBP for review and Approval process
ISA/ Trade Compliance Enhancements
Focused section
for User Actions
Informational Sections
Informational Sections
Roll Out of the New MSC
• In the works since 2016
• Initiated with the COAC, but also included stakeholders from multiple aspects of the trade
• Received 800 comments from trade
• Guiding principles included:– Partnership with the trade
– Bi-directional Education
– Consideration for small businesses
– Results driven
• New Security Profile in the Portal ready November 2019
• Validations using new MSC begin January 2020
• Impact on MRA yet to be seen
Key New Criteria to the MSC
• The new criteria takes a more comprehensive approach towards supply chain security. The new criteria includes new requirements - “musts” - and recommendations -“shoulds” - in the following areas:
– Security Vision & Responsibility
– Prevention of trade based money laundering and terrorist financing
– Protecting the supply chain from agricultural contaminants
– Cybersecurity
– Use of security technology - including cameras and intrusion alarms
Security Vision & Responsibility
“Corporate responsibility is critical – it is the most important criteria for the program.Whether you are a small or large company, corporate responsibility must be there. Top to bottom and bottom to top – anything less is not good enough!”
Business Partner Security
• Continues to be a critical requirement of the program
• Business partner relationships act as the force multiplier globally
• Additional emphasis on screening for money laundering & terrorist financing activities
• Address weaknesses, implement corrections and confirm completion!
Agriculture SecurityAgriculture is the largest business sector
Contaminants found in all conveyances
(all modes / all types of cargo 352 pests discovered daily by CBP)
Contaminants harbor pests and diseases
Threaten this industry
We know that … and so do terrorists
Objective –Destroy our Economic Viability
Agriculture Security
• A “must do” in the MSC
• Found under Transportation Security requirements in two sections:– Conveyances and Instruments of International Traffic Security
– Agricultural Security
• Compliance with Wood Packing Materials (WPM) requirements
• Must meet the International Plant Protection Convention’s (IPPC) International Standards for Phytosanitary Measures No. 15 (ISPM 15)
• The “Carrier Conveyance Contamination” presentation can be found in the Portal Public Library for guidance
Cybersecurity• Top priority of all the new MSC – expected to be phase 1
for enforcement
Cybersecurity
• Policy in place – review annually
• Use of software/hardware to protect IT systems
• Test security of network systems
• Sharing of information on cyber threats with gov’t and business partners
• Individual accounts/ use of PWDS / passphrases
• Backing up of data
• Data inventories and proper data destruction
• No use of counterfeit or improperly licensed products
Forced Labor – Increased Scrutiny• CBP has received funding and State Department approval to add nine more
customs attachés in US embassies overseas.
• More CBP Form 28s are being issued inquiring on forced labor practices
• CBP Reasonable Care publication has been updated to include Forced Labor Guidelines
• CBP’s eAllegation Portal use is encouraged to report potential violations –compensation up to $250K
• Congressional fixation on the issue – especially during the confirmation hearing for Commissioner McAleenan.
• CBP plans to incorporate Forced Labor requirements into the new CTPAT MSC (specifically as part of the Trusted Trader Compliance component)
– A draft of the proposed “CTPAT/Trade Compliance Forced Labor Strategy” was presented by CBP to the COAC at the February 2019 meeting and is under review.
– Per CBP, “CTPAT intends to incorporate social compliance as part of its trade compliance program, thus supporting the agency wide effort to combat forced labor.”
Forced Labor
• CTPAT Program = “Should”
• CTPAT Trade Compliance = “Must”
• Final requirements are still under development
• ICP Reasonable Care – Forced Labor section has been added
• CBP website provides additional guidance
• OECD and ILAB provide additional resources
Tariffs and CTPAT
• Tariff increases are impacting company budgets, including security
• Shifts in sourcing to offset tariffs
– New business partners
– New trade lanes
– Change in risk profiles
• Impacted companies could receive more scrutiny as a result
Current Benefits
• Assigned Supply Chain Security Specialist (SCSS)
• Advanced Qualified Unlading Approval Pilot (“AQUA Lane”)
• Free and Secure Trade (FAST) Lanes
• Front of the Line
• Reduced Examination Rates
• Business Resumption
• Mutual Recognition Arrangements (MRAs)
• Training Seminars
• CTPAT Portal
• Best Practices
• Status Verification Interface (SVI) Access
• SAFETY Act
Trusted Trader Expanded Benefits
Overall Program Benefits
Risk Assessment
Validation Comments
Risk Assessments
• 5 Elements1. Mapping Cargo Flow and Business Partners
2. Conducting a threat assessment
3. Vulnerability assessment
4. Action Plan/Follow up
5. Risk assessment process
Mapping Cargo and Partners
Threat Assessment
Vulnerability Assessment
Risk Assessment
Trusted Trader – Automate or Perish• Managing the 5-step risk assessment process – especially business
partner requirements, can be administratively burdensome
• Consider the paperless alternatives.
– On demand
– Standardized
– Single database
– Proactive
– Risk calculations
– “Verifiable” for validation purposes
– Corrective Action management
Risk Assessment Tools
• Maintain business partner data for multiple areas of risk in one central repository
• Targeted workflow
• Customize risk assessment questions and questionnaires based on your company business model & partner types
• Generate point-to-point summary of risk on a given trade lane
• Automatically generate & track corrective actions to address vulnerability gaps
• Dashboard metrics provide a corporate wide view of supply chain risk factors
• Create custom reports for risk analysis
• Conduct robust restricted partner screening
• Access to centralized country threat content
Risk Assessment Tools
Best Practices
What is a Best Practice?
• Definition: A method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark
• A Best Practice should be:
✓Repeatable
✓Predictable
✓Adaptable
✓Enforceable
One Size Does Not Fit All
• C-TPAT is designed to be a flexible program.
• Procedures and controls should be based on your company’s areas of risk.
• Pay close attention to the “musts,” and consider the value of the “shoulds.”
• Use common sense and practicality when developing procedures to meet criteria.
• As your business changes, so should your C-TPAT profile
CTPAT Field Offices• Buffalo, New York
• Houston, Texas [email protected]
• Los Angeles, California [email protected]
• Miami, Florida • [email protected]
• New York, New York [email protected]
• Newark, New Jersey [email protected]
QUESTIONS AND ANSWERS
Thank You!
Allen GinaCT Strategies
(202) 629-5199 [email protected]
Karen LobdellThomson Reuters
(704) 576 3678 ext. [email protected]
Beth PrideBPE Global
(415) [email protected]