industrial security service

Field OperationsApril 2008

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Program updates, progress and achievements

Presented by

Ron May

Director, Buffalo, NY C-TPAT Field Office


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Customs mission before 9-11:

• Protect and collect the revenue• Interdict the flow of illegal contraband both into and out of the

United States (narcotics, weapons, technology)• Enforce the laws and regulations of other government agencies

(Fish & Wildlife, APHIS, USDA, etc.)• Protect the borders of the United States

Note: During this time Customs, Immigration, Border Patrol and other agencies existed as separate agencies under

different departments (Treasury, Justice, Transportation)


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One day, The World Changes…….


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The next day, US Customs changes as

well….


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Post 9-11 Mission: Anti-Terrorism

• Weapons of Mass Destruction/Effect (WMD/WME)• Use of conveyances as tools of terror• Prevent smuggling of:

Weapons, People, Terrorist materials, Information

***Creation of Department of Homeland Security joining Customs, Immigration, Border Patrol, Coast Guard, APHIS and newly formed TSA under one department***


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Advanced information analysis and targeting Employing the use of advanced inspection technologies

Expanding our borders by pre-screening high-risk shipments prior to arrival in the U.S.

**Engaging the private sector to increase supply chain security

Increase Personnel

CBP’s Layered Enforcement Strategy...


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Non-Intrusive Inspection Technology...

Radiation Portal Monitors (RPM) Radiation Isotope Identifier Devices, (RIID) Personal Radiation Detectors Large-Scale Gamma-Imaging Systems K-9 (narcotics, currency, explosive, chemical)


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What is C-TPAT?

• Agreement between CBP and participantAgreement between CBP and participant• Submission of security profile by participant for use by Submission of security profile by participant for use by

CBP in examining supply chainCBP in examining supply chain• Validation by CBP of submitted security profile via site Validation by CBP of submitted security profile via site

visits (domestic and foreign)visits (domestic and foreign)• Administration of C-TPAT benefits by CBP to certified Administration of C-TPAT benefits by CBP to certified

and validated participantand validated participant• Continued communication between participant and CBP Continued communication between participant and CBP

through the C-TPAT programthrough the C-TPAT program


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• Voluntary Partnership - cooperatively developed minimum security criteria vs. mandatory requirements

• Provides for the customized application of guidelines by members

• Provides tangible benefits

• Trust but verify information


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Why the C-TPAT Approach has worked...

• Many of the security criteria and supply chain processes adopted by C-TPAT were already in place by currently successful companies.

• C-TPAT Program not only created stronger supply chains, but dependability and better familiarity with processes.

• Because non-regulatory, allows trade to have input on how criteria were developed and how program is administered (flexibility).

• Partnership


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C-TPAT Achievements April 23, 2009

• 9,181 Certified Partners to current date:

• 196 Total C-TPAT staffing level is185 Current staffing level in 7 Field Offices 11 Headquarters current staffing level

• 11,122 Total Validations Completed 8,444 Initial Validations Completed 2,678 Re-Validations Completed

• Number of completed validations by year: 2003 137 -Validations 2004 294 -Validations 2005 1,109 -Validations

2006 2,251 Initial Validations 15 Revalidations 2,266 Total Validations2007 2,515 Initial Validations 574 Revalidations 3,089 Total Validations 2008 1,846 Initial Validations 1,632 Revalidations 3,478 Total Validations 2009 291 Initial Validations 458 Revalidations 749 Total Validations

• 490 - Total Suspensions (246 Highway Carriers)• 355 - Total Removals (160 Highway Carriers)

• Internationalization Efforts: 3 - Mutual Recognition Arrangements: New Zealand, Canada, Jordan4 - Mutual Recognition Projects: Japan, Singapore, Korea, European Union7 - Technical Assistance Projects: Malaysia, Mexico, Philippines, Guatemala, China, Colombia, Israel 3 - Capacity Building Training Programs: Ghana, Brazil, Kenya

• Tiered Benefits Structure – commensurate with security enhancements. Best Practices Catalog.295 - Tier 3 Importers

Certified Members by Business Type

4238

2503

791

856

738 55

Importers - 4238

Carriers - 2503

Brokers - 791

Foreign Manufacturers - 856

Consolidators/3PLs - 738

Marine Port Authorities andTerminal Operators - 55

Validations completed by Year

01000200030004000

2003 2004 2005 2006 2007 2008 2009


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Program Travel

• Covered 6 of 7 continents

• Nearly 90 countries visited (multiple visits within higher risk countries)

– Angola

– Bangladesh (45 visits)

– Israel (24 visits)

– Sri Lanka (54 visits)

– Pakistan (14 visits)

– India (196 visits)

– Botswana (5 visits)

• Each SCSS averages approx. 75-100 days a year on travel


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Security and Accountability for Every Port Act of 2006 (SAFE Port Act Legislation)

• Signed by President in October of 2006

• Program remains voluntary and non-regulatory

• Sections 211 thru 222 deal with C-TPAT program– Minimum Security Requirements

Review and maintain Evolve and strengthen

– Eligible entities (new sectors) 3PL coming on line

– Tier level benefits Review and examine application Benefits booklet to be released later this year


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Security and Accountability for Every Port Act of 2006 (SAFE Port Act Legislation) con’t

– Validation/revalidation timelines New partner validated within 12 months of

certification Revalidations occur w/in 3 years of date of initial

validation

– Consequences for lack of compliance Reduction in benefits Suspension Removal Violation of contracts with business partners**

– Third Party pilot program Concluded (discussed in upcoming slide)


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Security and Accountability for Every Port Act of 2006 (SAFE Port Act Legislation) con’t

– Program management and staffing issues 2 new field offices (Buffalo & Houston) Close to full staff of 200 Stronger oversight; Multiple GAO audits within first 5

years of program operation Application system is fully automated, all applications

reviewed and acted on within 90 days Validation reports out to partner within 90 days

(current average is <48 days) All validation reports will be automated by end of

year and require a response from the partner within 90 days of receiving the report. This 90 day response will also be automated within the Portal


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Main Issue Remains:

Enforcementand

Facilitation


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Port of LA/Long Beach


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CBP Point of Entry Hidalgo, TX


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Increase in Overall Exam Rates


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C-TPAT Member Examination Rates

Overall, post 9-11 examination rates by CBP

have more than quadrupled

C-TPAT membership does not preclude

shipments from possible examination,

However, we can state:

Overall, a C-TPAT member is 5 times less likely

to be examined than a non C-TPAT member.


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C-TPAT Benefits...Trade Based

• Emphasis on self-policing not Customs inspections

• Greater risk mitigation• Stronger brand equity• Greater supply chain

integrity and dependability

• Reduced cargo theft and pilferage

• Greater efficiency between internal and external functions

• Improved asset utilization


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C-TPAT Benefits…Customs based

• Reduced Inspections • Access to Free and Secure

Trade (FAST)• Access to CBP/C-TPAT

Training Seminars• Established point of

contact within government• Access to SVI• Emphasis on self-policing

not Customs inspections

When another event occurs requiring temporary shutdown of borders, certified C-TPAT members shipments will move uniquely under CBP business resumption plans.


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Benefits Comparison

FY2008 1 out of every 33 sea containers was examined; Meaning: 1 out of every 55 C-TPAT sea containers was examined and; 1 out of every 11 Non C-TPAT sea containers was examined.

FY2008 - 1 in every 4 trucks was examined; Meaning: 1 out of every 6 C-TPAT trucks was examined and; 1 out of every 2 non C-TPAT trucks was examined.

Foreign Service Provider

C-TPAT ImporterNon C-TPAT Importer

83% less inspections than a non C-TPAT importer(Reduce time and cost of getting cargo released by CBP)

Can use FAST lanes (where applicable)(Improve in moving goods and services across borders)

Front of the Line privileges (as per Port limitations)(Reduce time in CBP secondary cargo inspection Lines)

No Benefits


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C-TPAT Validation/Revalidation Objective

Process to ensure that C-TPAT participants have……

implemented the security measures outlined in their security profile and are

following those measures.


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Validation and Revalidation Visits

• Initial validation visits take place within 12 months of certification (unless documented circumstances prevent this)

• Revalidation visits take place within 3 years of original validation completed date.

• C-TPAT partner is strongly recommended to attend overseas or foreign portion of validation or revalidation visit.

• CBP covers cost of its employees for travel and accommodations. C-TPAT participant only covers cost associated with its own employees.

• Many factors are considered in selecting site visit, but primary focus is still on greatest risk to overall supply chain and CBP’s need for compliance with the SAFE Port Act.

• Additional considerations:– Recent incidents or problems at another location– Newly acquired supply chain components– Lack of additional sites to visit– Law enforcement information (internal CBP decision)– Volume or production rates from site– Weather, holidays, labor issues, political issues, disease concerns and other unique circumstances.


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Average Days Validation Report To Partner

Total average for all 7 Field Offices 35 days

**This is due to nearly full staffing and automated report system


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Potential Benefits for all Businesses According to the UVA Study

• Reduce time and cost of getting cargo released by CBP

• Reduce time in CBP secondary cargo inspection lines

• Improve predictability in moving goods and services across borders

• Generate significant opportunities for cost avoidance

• Improve security for workforce• Reduce cargo theft and

pilferage• Improve asset utilization

Likelihood of Company Stayingin C-TPAT

0.1%

0.5%

3.2%

18.1%

78.1%

0% 20% 40% 60% 80% 100%

Definitely willnot stay

Probably willnot stay

Not sure

Probably willstay

Definitely willstay


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C-TPAT Program Actions

All Rejections, Suspension, Removals, Ineligibledeterminations, and program Withdrawal actionstaken within the Customs-Trade PartnershipAgainst Terrorism (C-TPAT) program MUST beapproved by C-TPAT Headquarters (HQ)management and only after the Supply ChainSecurity Specialist (SCSS) receives approvalfrom their local Supervisor.


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C-TPAT Appeal Process• Suspensions and removals are subject to an appeal

process.

• The partner is given a specific time period in which to appeal the decision (usually 30 days).

• All appeals received by the C-TPAT program are reviewed and acted upon by the Executive Director of Cargo Conveyance Security.

• A letter from the Executive Director is sent to the affected partner with his/her final decision and details of any actions required by the partner.


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Post Incident Analysis (PIA)When a C-TPAT participant is involved in a supply chain incident, HQ C-TPATprogram staff will examine the incident and provide details to C-TPAT management sothat they can determine the correct response from the program.

All Post Incident Analysis (PIA) will be conducted within 30 days.

The Field Director will assign a SCSS team to conduct the PIA (usually involving thecompany assigned SCSS). The PIA report, with program status, and recommendationsmust be finalized within this 30 day time frame.

Once the Field Director receives and reviews the PIA report and discusses and approvesthe company status recommendation, the full report and recommended actions are thenforwarded to HQ for review by C-TPAT Management. All final decisions on PIA results,recommendations and C-TPAT program actions must be approved at the HQ C-TPATmanagement level.


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2007 Post Incident Analysis (PIA’s) Summary

43 Total PIA’s

– 39 Involved smuggling of Marijuana• Amounts ranged from 47 lbs. to over 5,500 lbs.

– 2 involved smuggling of Cocaine• Each incident involved no less than 63 lbs.

– 2 involved human smuggling


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2008 Post Incident Analysis (PIA’s) Summary

45 Total PIA’s

– 35 involved smuggling of Marijuana• Amounts ranged from 29lbs. to over 4.6 tons

– 4 involved smuggling of Cocaine• Amounts begin at no less than 24 lbs.

– 2 involved human smuggling

– 3 were general seizures

– 1 was a failed validation as a result of response to incident


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Confirmed Best Practices

• Maintaining consistent point of contact for the C-TPAT program

• Regular monitoring of both C-TPAT website and Portal account.

• Security profile maintenance beyond required annual self-assessment

• Follow up questionnaires and inquiries to business partners/providers (outside of initial effort)

• Notification made to CBP and assigned SCSS in the event of any security breach or anomaly.


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• Inspection of providers facilities by participant personnel (e.g. duel QC/Security visit, red team)

• Not allowing the practice of double brokering within your supply chain

• Using only known providers within your supply chain (specifically other C-TPAT providers)

• Establishing C-TPAT committees, working groups or regular meetings


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• Making C-TPAT participation part of overall supply chain operation and not singular program.

• Provider participation in supply chain security meetings or councils.

• Random audits by management of processes outside of normal established procedures

• Documentation kept of all supply chain incidents, anomalies or issues for future reference.


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• The goal of mutual recognition is to link the various international industry partnership programs, so that together they create a unified and sustainable security posture that can assist in securing and facilitating global cargo trade.

• The signing of a mutual recognition arrangement is the procedure that enables information sharing activities to occur in accordance with the terms of the Customs Mutual Assistance Agreement (CMAA), and each participant’s domestic law and policy.

C-TPAT & Mutual Recognition


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C-TPAT & Mutual Recognition

The Customs-Trade Partnership Against Terrorism (C-TPAT) mutual recognition process involves four (4) phases:

A side-by-side comparison of the program requirements. This is designed to determine if the programs align on basic principles.

A program of joint validation visits. This is designed to determine if the programs align in basic practice.

The signing of a mutual recognition arrangement.

The development of mutual recognition operational procedures, primarily those associated with information sharing.


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• New Zealand – Secure Export Scheme (SES)– June 29, 2007 - Mutual Recognition Arrangement Signed

• Canada – Partners in Protection (PIP)– June 28, 2008 - Mutual Recognition Arrangement Signed

• Jordan – Golden List– June 28, 2008 - Mutual Recognition Arrangement Signed

C-TPAT – Mutual Recognition


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Canada – Partners in Protection (PIP)

• Have established a baseline process for the sharing of information, but will continue to develop process to allow eventual automated information exchanges

• Have identified specific points of contact within each administrations program

• While separate applications will be required for each program, each side is beginning to examine what partners are in both programs and may thus be able to avoid duplication of each programs requirements.


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Canada – Partners in Protection (PIP)

• Long term vision is ability to have each administration complete validations on behalf of the other, thus allowing partner who is member of both programs to only need to go through process one time, but be “validated” in both.

• Recognition between C-TPAT and PIP will be essential in the event of a disruption along the border as current business resumption models being implemented by both CBP and CBSA are taking into account those who participate in these programs as part of the overall cargo processing procedure.


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Japan – Authorized Economic Operator (AEO)Side-by-Side Comparison – CompletedJoint Validation Visits – CompletedMutual Recognition Signing – June 2009

• Singapore – Secure Trade Partnership-Plus (STP-Plus)Side-by-Side Comparison – CompletedJoint Validation Visits – CompletedMutual Recognition Signing – June 2009



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European Union – Authorized Economic Operator (AEO)Side-by-Side Comparison – CompletedJoint Validation Visits – Pending

• Korea – Authorized Economic Operator (AEO)Side-by-Side Comparison – Under Development



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Argentina Argentina (Program Exchanges)(Program Exchanges)

Australia Australia (Program Exchanges)(Program Exchanges)

Brazil Brazil (Training)(Training)

Chile Chile (Program Exchanges)(Program Exchanges)

China China (Program Exchanges)(Program Exchanges)

Colombia Colombia (Training)(Training)

Ghana Ghana (Training)(Training)

Guatemala Guatemala (Program Exchanges)(Program Exchanges)

C-TPAT & Foreign AdministrationsC-TPAT & Foreign Administrations

Israel Israel (Program Exchanges)(Program Exchanges)

Kenya Kenya (Training)(Training)

Malaysia Malaysia (Program Exchanges)(Program Exchanges)

Mexico Mexico (Program Exchanges)(Program Exchanges)

Peru Peru (Program Exchanges)(Program Exchanges)

PhilippinesPhilippines (Program Exchanges)(Program Exchanges)

Switzerland Switzerland (Program Exchanges)(Program Exchanges)

Taiwan Taiwan (Program Exchanges)(Program Exchanges)


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Closing

• All work is pursuant to World Customs Organization SAFE Framework of Standards established baseline

• Each administration will seek mutual arrangements that fit their individual needs at and above this baseline

• Globalization of security standards is essential to successful fight against terrorism

• Trade support and interest is crucial to successful implementation


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Thank you

Ron May

[email protected]

industrial security service

Documents

tpat benefits

ctpat achievements

total ctpat staffing

ctpat approach

security enhancements

homeland security

program travel

minimum security criteria