Customs-Trade Partnership Against Terrorism Officially Opening to Exporters

US Customs and Border Protection will open enrollment to exporters for the first time next week.

On May 17, exporters will be eligible to participate in the Customs-Trade Partnership Against Terrorism program (C-TPAT). Exporters that enroll in C-TPAT will be able to avail themselves of the trade facilitation benefits previously offered only to importers under the program. The effort is seen as boosting the Obama administration's National Export Initiative to facilitate export cargo shipments.

Background

C-TPAT is a voluntary supply chain security program administered by US Customs and Border Protection (CBP) that was developed to improve the security of private companies' supply chains with respect to terrorism. The program was launched in November 2001, but initially limited enrollment exclusively to importers. C-TPAT requires participating companies to document and validate their supply chain security procedures according to C-TPAT guidelines. In addition, CBP requires that C-TPAT-participating companies develop an internal validation process to ensure that security measures are in place and documented in their Supply Chain Annual Security Profile and in any supplemental information provided to CBP. As a part of the C-TPAT process, CBP’s C-TPAT Supply Chain Security Specialists (SCSS) and a C-TPAT participant will jointly validate a company’s supply chain security procedures.

Eligibility

Companies interested in participating in the C-TPAT exporter program must meet the program’s definition of an “exporter” (a person or company that, as the principal party in interest in the export transaction, has the power and responsibility to determine and control the sending of items out of the United States) and meet the following eligibility requirements:

• Be an active US exporter (exporting out of the United States)
• Have a business office staffed in the United States
• Have an Employer Identification Number or a Dun & Bradstreet number
• Have a documented export security program, and designate an officer or manager as the C-TPAT point of contact and another as an alternate
• Commit to maintaining the C-TPAT supply chain security criteria
• Create or provide a security profile to CBP outlining how the applicant will enhance internal policies to satisfy C-TPAT security criteria
• Have an acceptable level of compliance for export reporting for the last 12 months, and be in good standing with US federal government departments

Considerations

According to CBP, the benefits of being C-TPAT certified include the following:

• Increased facilitation of exports from foreign partners located in countries that have established Mutual Recognition Arrangements with the United States
• The ability to market the fact that C-TPAT-certified cargo is secure
• Prioritized processing examinations over non-C-TPAT parties, reduced rates, and times
• Increased coordination with C-TPAT partners during shipping disruptions
• Individually assigned C-TPAT SCSS available to assist with supply chain security inquiries
• Access to C-TPAT trainings and seminars and various multimedia supply chain materials
• Use of C-TPAT common standards and security requirements that facilitate international trade by reducing the duplication of procedures

Some of the benefits that companies with secure international supply chains also experience beyond those offered by C-TPAT are improved product safety, inventory management, supply chain visibility, and higher customer satisfaction.

Although the benefits of becoming C-TPAT certified are undeniable, it is important to note that there is no legislation or regulation that governs the program. This means that CBP can choose to modify the program at will, as it has already done in the past. These modifications have consequently increased the requirements imposed on program participants.

Exporters considering whether to become C-TPAT certified should understand the costs involved in participating in the program and weigh such costs against the benefits. It is an individual decision that must be made on the unique facts and circumstances of each company’s profile. 

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Washington, DC
Margaret M. Gatti