Penn State: Take the survey to weigh in on value of C-TPAT program

logo-ctpatThe age old question: Is participating in the C-TPAT program worth it.  As blogged here previously, this question has generated its share of controversy.

Now, Penn State Erie – Black School of Business, is conducting research on C-TPAT’s value for business and supply chain risk compliance. (Penn State is repeatedly ranked as number the number one leader in supply chain education).

The university is seeking C-TPAT participants for a survey that will take 5-10 minutes.  They will share the survey results.  Please email Dr. Varun Gupta with any questions.




C-TPAT: AQUA Lane for expedited unlading opens at LA/LB seaport



US Customs’ Los Angeles Field Operations Unit has announced the opening of the Advanced Qualified Unlading Approval (AQUA) Lane program at the Los Angeles/Long Beach seaport.

AQUA Lane provides an expedited vessel clearance process to sea carriers actively participating in the C-TPAT program, who meet the requisite criteria, that enables them to immediately unload cargo upon arrival in the US — prior to CBP meeting the vessel.  It allows CBP to lessen congestion at seaports, redirecting Customs’ resources towards high risk threats and away from low risk carriers.

Complete information, including FAQs are found in the LA/LB seaport’s September 28, 2016, Public Bulletin.  LA:LB Implementation of AQUA Lane at the LALB Seaport


CBP launches Broker-Known Importer Program (BKIP)

US Customs and Border Protection logoUS Customs recently announced, in CSMS #15-000275, the implementation of the Broker-Known Importer Program (BKIP), an initiative proposed by the National Customs Brokers & Forwarders Association of America (NCBFFA).

The program allows a licensed customs broker to inform CBP, via the filing of an electronic entry,  that the importer listed on the entry is known to the broker, and that the broker has advised the importer of their compliance responsibilities under Customs regulations.  In addition, the broker will have verified the importer’s grasp of its obligations in areas such as entry declarations, ADD/CVD, IPR, valuation and preference programs, through a questionnaire.

CBP will use this information for purposes of cargo risk segmentation.  When a broker identifies an importer who is exercising reasonable care in connection with their imports by checking the BKIP indicator flag on an entry, Customs may adjust that importer’s risk profile in CBP’s targeting system accordingly, even if the importer is not part of the Trusted Trader programs — C-TPAT or ISA. (The BKIP indicator flag for entries has already been deployed as part of ACE.)

BKIP is a voluntary program for both brokers and importers.

BKIP Benefits:

  • New platform for brokers and importers to discuss compliance obligations
  • Potential to increase broker entry accuracy
  • Increased compliance knowledge for importer staff
  • Improved cargo targeting by CBP at time of cargo arrival
  • More information to CBP about importer from a trusted source

Helpful Links




CBP launches Trusted Trader program test


US Customs has launched a test of its Trusted Trader initiative, “a new program that will streamline the process through which importers can establish to CBP that they strive to secure their supply chains and strengthen their internal controls for compliance with … existing [customs] laws.”

Working in conjunction with the CPSC and FDA, CBP plans to use the Trusted Trader program to unify the current C-TPAT and ISA programs.  (Non-participating companies will still have the option to participate exclusively in C-TPAT and apply to the ISA program).  In addition, the Trusted Trader program will leverage the expertise of Customs’s CEEs “to manage trusted trader accounts from an industry perspective.”

CBP lists numerous benefits of the Trusted Trader program, including:

  • All the incentives provided by the C-TPAT and ISA programs
  • Reduced FDA targeting/examination risk score
  • Potential for penalty offsets in penalty mitigation decisions
  • Additional benefits if participating in Reconciliation Prototype program
  • Exemptions from on-site visits from Drawback Specialists
  • And much more

The Trusted Trader test is expected to last for 18 months, and the application process is now open.

See last week’s Federal Register announcement for more details.

US retailers streamline C-TPAT audits of overseas factories

logo-ctpatSince its post-9/11 inception, the US Customs C-TPAT program has helped the trade — and national security — by establishing a risk-based approach towards import cargo security.  Many large US retailers are involved in the program, taking steps to ensure that their foreign suppliers pass muster.  Recently, several large retailers have voluntarily joined forces to greatly improve the auditing of their suppliers’ factories.  Their pilot program has met with great success, and they hope that other retailer join forces for a wider rollout.

According to an article in the November 2013 print edition of American Shipper, “Common security lens,” an unanticipated byproduct of the C-TPAT program has been “audit fatigue” — foreign contract manufacturers inundated with extensive audit requests from US retailers and their third-party auditors.

The result has been increased costs for suppliers to comply with these often duplicative audits, which require “managers to spend time answering questionnaires, preparing for on-site audits, accompanying audit teams during plant visits and paying for third-party auditors when retailers outsource verification.”   Moreover, since the average factory is audited multiple times by different retailers annually, there is “confusion about whose standards to follow, inefficiency… and a focus on passing the audit rather than fixing any underlying problems.”

To address these issues, about 10 top US retailers — including Target, Home Depot and Levi Strauss — partnered to standardize audits in global supply chains.  With input from US Customs and third-party auditors, they created a harmonized audit checklist that incorporates the eight major areas that CBP requires for C-TPAT certification, essentially “agreeing on minimum security requirements” while leaving the details of compliance up to each factory.

The advantages of a standard approach to security are numerous:

  • Factories benefit by:
    • having more clarity and consistency about requirements
    • undergoing fewer audits, which enables them to focus on production and security.
  • Retailers gain by:
    • lowering costs of doing business
    • focusing time and resources on corrective action, education and training
    • exchanging best practices with other retailers and brands

After a successful pilot which resulted in some tweaking to the audit checklist, the working group of retailers hopes to broaden the program to include other retailers, by creating a website and LinkedIn group, and presenting at US Customs’ next C-TPAT conference.


CBP updates the Simplified Entry pilot program

Effective November 4, 2013, US Customs has made changes to the Simplified Entry pilot program which launched in 2011:

  • CBP has changed the name of the program to “ACE Cargo Release Test” to reflect the addition of enhance functionality for:
    • automated corrections and cancellations
    • split shipments
    • in-bond cargo
    • quantity less than full manifested bill quantity (if no in-bond)
  • CBP has loosened the program’s eligibility so that direct filing importers and customs brokers no longer need to be participants in the C-TPAT program
  • The program is now open to all eligible participants for  an indefinite period, up from a 14-day period
  • CBP has added 3 new data elements to be filed in ACE Cargo Release:  Port of Entry, In-Bond (if applicable) and Bill Quantity



American Shipper: C-TPAT, ISA benefits questioned


In the August 2013 print edition of American Shipper, the magazine highlighted its Import Operations and Compliance Benchmark Study which was released in May.  In particular, the focus was on the results of one part of the study — a survey of over 100 shippers on the effectiveness of US Customs’ C-TPAT and ISA programs.

Unfortunately, the results were not particularly positive.

As for C-TPAT:

  • 11% – Receiving all promised benefits of C-TPAT
  • 29% – Receiving some, but not all, of the expected benefits of C-TPAT
  • 7% – Receiving less than expected benefits of C-TPAT
  • 20% – Receiving no benefit from C-TPAT
  • 33% – Uncertain if C-TPAT is effective

As for ISA, “a third of respondents say they derive no benefit from the program, and nearly one half say they are uncertain of its benefits.”

The study is available here (registration required).



US works to enhance trade with Mexico, EU

The United States continues its efforts to facilitate trade with two of its significant trading partners, Mexico and the European Union.

On the southern border, the US and Mexico recently signed a joint work plan for mutual recognition of each other’s trade security program, CBP’s C-TPAT and Mexico’s New Certified Companies Scheme (NEEC).  Both countries expect to implement the plan in two years.  This is similar to Beyond the Border initiative with our northern trading partner, Canada.

Separately, the US and the EU have renewed efforts to create a free trade zone for their mutual benefit.  Previously, the parties were unable to agree on the harmonization of taxes, tariffs, regulations and standards.  But with economic woes still engrained on both sides of the Atlantic, a free trade zone will likely save hundreds of billions of dollars — on both sides — each year, providing an incentive to find common ground.  Listen to the report from National Public Radio.

Beyond the Border — improvements for US/Canada trade

Canada is the United States’ largest trading partner, with billions of dollars in goods crossing the border annually.  Last year, the United States and Canada agreed to implement the Beyond the Border Action Plan, which is intended to expedite trade between the two countries while enhancing border security.

As noted in a recent piece posted on the Government Security News website, Canada recently took a significant step in this regard by expanding its trusted travelers’ expedited border crossing pilot (Free and Secure Trade or FAST) program to a third crossing in Ontario.  Under FAST, participants that are either in Canada’s Partners in Protection (PIP) or Customs Self Assessment (CSA) program to have expedited border crossings.  Previously, expedited service was available only to carriers and shippers who were participants in both programs.  Now, the program is more in alignment with America’s trusted trader programs:  C-TPAT and ISA.

While this is a solid step in the right direction, significant work remains to meet the goals of Beyond the Border.  A recent article in Canada’s Financial Post, “Will the new Can-Am border agreement be a supply-chain headache?”, lays out several concerns.  For example, much effort must be expended to harmonize the two countries’ regulatory schemes for trade.  As pointed out by Joy Nott, president and CEO of the Canadian Association of Importers and Exporters,

[i]f we all live another 300 years, I suppose all regulations would end up being harmonized.  In the interim, it’s still the biggest hurdle to business, irrespective of the sector.  And no sector is exempt from this.

Until that time, as pointed out in the Financial Post article, traders will need to be well-versed in the trade requirements of both the US and Canada.  Ruth Snowden, executive director of the Canadian International Freight Forwarders Association, stated:

Traders will have to have both types of in-house expertise, as well as develop processes and systems to ensure compliance.  That’s getting increasingly difficult because it’s expensive to build the systems, relationships and third-party connectivity needed.

Nevertheless, in addition to the Ontario border crossing pilot, there are glimmers of progress .  For instance, as reported on this blog, CBP just increased the the dollar value of goods that would qualify for “informal entry” processing to $2,500, in a move to harmonize the values for the US and Canada in line with the Beyond the Border initiative.

CBP to launch six new CEEs in 2013

Building on the success of the existing Centers of Excellence & Expertise,  US Customs has announced that six new CEEs will open in FY 2013:

1. Agriculture & Prepared Products:  Miami, FL

2. Apparel, Footwear & Textiles:  San Francisco, CA

3. Base Metals:  Chicago, IL

4. Consumer Products & Mass Merchandising:  Atlanta, GA

5. Industrial & Manufacturing Materials:  Buffalo, NY

6. Machinery: Laredo, TX

This will bring the number of CEEs to ten.

A vital component of CBP’S Trade Transformation efforts on the import front, “[t]hese virtual centers will provide one-stop processing to lower the trade’s cost of business, provide greater consistency and predictability and enhance CBP enforcement efforts.”