1st National Conference on SAFE Trade and AEO

U.S. Customs and Border Protection

Customs-Trade Partnership
Against Terrorism

Manila, Philippines
May 13, 2008
CBP’s Mission….

Preventing the entry of

terrorists and their
weapons while facilitating
legitimate trade and travel
Layered Enforcement Strategy
Advance electronic information analysis and targeting of high risk
shipments.
The 24-Hour Rule and the National Targeting Center (NTC)

Using advanced inspection technologies.

Non-intrusive Inspection Technologies (NII)

Pre-screening high-risk shipments prior to arrival in the U.S.

Container Security Initiative (CSI)
Secure Freight Initiative / 100% Scanning

Partnering with the trade community to increase supply chain

security.
Customs-Trade Partnership Against Terrorism (C-TPAT)
SUPPLY CHAIN ROAD MAP
Shift in Supply Chain Security
From Traditional “Single Point” to “End-to-End”

Traditional
Import
Intervention

Single Point intervention by Customs at import location.

Shift in Supply Chain Security
From Traditional “Single Point” to “End-to-End”

Expanding to
Transit Port
Intervention

Adding intervention at transit port - CSI type measures.

Shift in Supply Chain Security
From Traditional “Single Point” to “End-to-End”

Securing Full
Transport Legs

Securing the full maritime portion - ISPS type measures.

Shift in Supply Chain Security
From Traditional “Single Point” to “End-to-End”

End-to-End Supply Chain

Security Solution

Securing the entire supply chain from end-to-end – C-TPAT type measures.
C-TPAT
C-TPAT is the largest government-private sector partnership
to emerge from the terrorist attacks on September 11, 2001.

C-TPAT was launched in November 2001 with seven major

importers who also saw the need for the focus on supply chain
security.

The guiding principles for C-TPAT have been enhanced

supply chain security, partnership, and a voluntary program.
Who is Eligible to Participate?
U.S. Importers of Record
U.S. / Canada / Mexico Highway Carriers
Air, Rail, Sea Carriers
U.S. Marine Port Authority/Terminal Operators
U.S. Air Freight Consolidators
Ocean Transportation Intermediaries and Non-Vessel
Operating Common Carriers (NVOCC)
Mexican and Canadian Manufacturers
Certain Invited Foreign Manufacturers
Licensed U.S. Customs Brokers
C-TPAT Security Criteria (Importers)
Business Partner Requirements
Documentation that they are a C-TPAT member.
Non-C-TPAT member, written or electronic confirmation meeting C-
TPAT security criteria.

Container Security
Written sealing procedures (PAS ISO 17712 seal).
Seven-point inspection of container prior to loading / upon receipt.
Container Storage - secure locations, preventing unauthorized entry into
container or storage area.

Physical Access Controls

Visitor procedures (including deliveries and mail) – Logbooks, visitor
badges, escorted access.
Employment Procedures – Identification system.
C-TPAT Security Criteria (Importers)
Personnel Security
Procedures must be in place to screen prospective employees and to
periodically check current personnel (Background, employment history).
Personnel termination procedures must be in place to remove access.

Procedural Security
Document processing – accurate, complete & safeguarded.
Manifesting procedures – accurate and timely.

Security Training and Awareness

A threat and security awareness program should be established for all
employees.
Employees must be made aware of the procedures the company has in
place to address a situation and how to report it.
C-TPAT Security Criteria (Importers)
Physical Security
Cargo handling and storage facilities must have physical barriers that
guard against unauthorized access.

Information Technology Security

Anti-virus software/ Firewalls.
IT security policies, procedures and standards must be in place and
provided to employees in the form of training.
An Explanation of C-TPAT Tiers
Applicant
A company that has submitted their
security profile and signed their
agreement (online).
Tier 1
A company that has completed their
online application, the company has
been vetted, the profile has been
reviewed along with the company’s
importation history and approved
by the SCSS. This company is now
a C-TPAT member.
Tier 2
A certified company that has
undergone their validation and has
met minimum security criteria.
Tier 3
A certified company that has been
validated and has exceeded
minimum security criteria.
Validations
The purpose of the validation is to ensure that the C-TPAT participant’s
international supply chain security measures that are contained in their
security profile have been implemented and these measures are in
accordance with established C-TPAT security criteria or guidelines.
The validation is an opportunity to develop a strong working relationship
between CBP and C-TPAT member.
Foreign manufacturers/companies are encouraged to develop strong
relationships with their government agencies.
Allows for CBP and C-TPAT partners to jointly discuss security related
issues and share best practices.
A forum to review security related issues.
Identify supply chain security vulnerabilities & weakness.
Provide feedback on immediate actions required or recommendations to
address security issues.
Benefits Assigned to Tier Levels
Applicant
Applicants do not receive any
benefits.
Tier 1
Receives a minimal reduction in
CBP examinations.
Front of the line treatment.
Assigned a Supply Chain Security
Specialist (SCSS).
Invitation to attend the supply
chain security conferences hosted
by C-TPAT.
Tier 2
Receives same as Tier 1 and in
addition, a significant reduction in
examinations.
This tier status is one of the
variables factored into post-
incident contingency planning
should a terrorist act impact
international supply chains.
Tier 3
Members have around 6 to 7 times
less inspections than non-C-TPAT
members.
 C-TPAT Achievements
May 1, 2008
8,363 Certified Partners
7 Field Offices – 200 Supply Chain Security Specialists
Buffalo, Houston, Los Angeles, Miami, Newark, New York, Washington, DC.
7,632 Total Validations Completed
6,729 Initial Validations
903 Re-Validations
533 Total Suspensions/Removals
259 Highway Carriers
Security Criteria Implemented
Importers, Sea Carriers, Highway Carriers. Rail Carriers, Foreign Manufacturers,
Customs Brokers, Mexico Long Haul Highway Carrier, Port Authorities/Terminal
Operators, Air Carriers. (Under Development: Consolidators).
Tier III Importers - 256
Safe Port Act
Recognizes the critical role of CBP in securing our nation’s border against
terrorism by securing the supply chain and facilitating legitimate trade.

SAFE Port Act Requires CBP:

Certify new applicants within 90 days.

Validate all partners within one year of certification.

Revalidations not less than once every four year.

Third party validation pilot program.

Supply Chain Influences

Weather Accidents

Sabotage Others
Every Company is at Risk
Accounting Irregularities Bankruptcy
Mergers and Acquisitions Workplace Violence
Class Action Lawsuit Labor Stoppage
Political Unrest Chemical – Biological – Radiological
Natural Disasters – Nuclear – Explosive
Civil Disorders Contamination of Food / Water
Fire Structural Collapse
Bomb Threat Supply Chain Interruption
Suspicious Packages
Missing Person, Kidnapping
Loss of Utilities
Water, Electricity, Natural Gas
Hazardous Materials Release
Transportation Accident
Product Tampering or Recall
Pandemic Outbreak
Terrorist Attack
New Government Regulations
Main Entities
Shipper/Consignor: An entity (individual/firm) that
sends freight.
Consignee: An entity that receives the freight.
Shipment is transacted between consignor and consignee.
Carrier: Transports the shipment.
Carrier
Transportation provider.
Has the responsibility of transporting the shipment.
Typically owns and operates transportation equipment
(airplanes, ships, trains, trucks, etc.).
Carrier Types
Common Carrier Private Carrier Contract Carrier
Serve all customers. Owns and manages Provides service to
Without its own specific customers
discrimination. transportation based on negotiated
Charge reasonable service. rates.
rates. Are not regulated. Tailor service to meet
Deliver shipments in Can provide service the needs of each
stated time, is liable for to other specific customer.
damage. corporations. Rates are not public.
Entry to the industry
is regulated.
But not required to
serve all shippers.
Transportation Comparison
Air Rail Roadways Water
Fast Mass Greatest Mass movement
Expensive movement of accessibility. of goods.
Reliable goods. Less capacity Excellent for
(freight is Accessibility is than rail. long-haul
less prone to a problem. lower initial transportation
damage) Cheaper, more investment, but of low-cost
efficient than more expensive commodities.
trucks. operation. Very high
High fixed capacity.
costs, low Cheaper
variable costs. operation that
rail and
roadways.
Trucking Terms
Truck Load/Full Truck Load (TL/FTL)
TL Carriers: Shipper must contract entire truck.
Simpler to manage.
Less expensive per unit mile.

Less than Truckload (LTL)

LTL Carriers: Shipper can contract the carrier for freight that will
not require entire truck.
More complicated.
More expensive per unit mile.
Intermodal Transportation
Using a container that can be transferred from the vehicle of one
mode to the vehicle of another; and with the movement covered
under a single bill of lading.
Container
Single, rigid, sealed, re-useable metal box of standardized
dimensions.
Merchandise is packed in container and containers are
shipped via trucks, rail, ships.
Usually 8 ft in width and height, can be 20 ft or more in
length.
TEU (Twenty-foot Equivalent Unit)
FEU (Forty-foot Equivalent Unit)
Terminal
 Transportation facility with one or more functions:
Access (point where freight enters and leaves the transportation
system)
Freight consolidation/distribution
Mode transfer
Vehicle transfer
Storage and warehousing
Fleet maintenance
Freight Forwarder
An agency that receives freight from a shipper and then
arranges transportation with one or more carriers. Often
performs other tasks:
Consolidation
Pickup/delivery
Freight handling, documentation, clearances.
Nonvessel-Operating Common Carrier (NVOCC)

Owns no vessels (ships).

Provides ocean shipping freight-forwarding service.
Provides consolidated, negotiated-rate services for ocean and
inland water carriers.
May affiliate with freight-forwarders to provide pickup/delivery
and other services.
Third Party Logistics Provider (3PL)

Firm to which logistics services are outsourced.

Typically handles many of the following tasks:
Procurement
Order management
Inventory/warehousing
Transportation
Consolidation
Bringing together small shipments, often from different
shippers.
Take advantage of economies of scale.
In-Vehicle: Perform pickups from many shippers and
consolidate into larger shipments.
Out-of-Vehicle: Occurs at terminals; shipments to a single
customer are consolidated before shipping.
 Threats - Impact vs. Probability

NUCLEAR BIOLOGICAL
WEAPON AGENT

IMPROVISED
NUCLEAR
DEVICE CHEMICAL AGENT
OR TOXIC
POTENTIAL
RADIOACTIVE INDUSTRIAL
IMPACT
MATERIAL CHEMICAL

PROBABILITY / LIKELIHOOD
Know Your Business Partners!
C-TPAT & Mutual Recognition

 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 principle behind aligning partnership programs is to create a

system whereby all participants in an international trade
transaction are approved by Customs as observing specified
standards in the secure handling of goods and relevant
information.
C-TPAT & Mutual Recognition

 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.

 Mutual recognition is not “automatic.” A business must be in

good standing with both Customs administrations.

 Mutual recognition can only occur to the extent permitted by

law, regulation, or ruling, and is subject to national security
considerations.
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 pilot 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.
C-TPAT & Mutual Recognition

New Zealand – Secure Export Scheme

June 29, 2007 - Mutual Recognition Arrangement Signed

 Canada – Partners in Protection

Arrangement Completed – Signing Pending

Jordan – Golden List

Arrangement Completed – Signing Pending
C-TPAT & Mutual Recognition

Japan – Authorized Economic Operator

Side-by-Side Comparison – Under Development

Singapore – Secure Trade Partnership

Side-by-Side Comparison – Under Development

Australia – Authorized Economic Operator

Pending Operational Status

Mexico – Alliance for Secure Commerce

Under Development
C-TPAT & Mutual Recognition

European Union – Authorized Economic Operator

Development – 2007
Side-by-Side Comparison - Completed
Joint Visitation Pilot - Completed

Implementation – January 2008

European Commission is responsible for the implementation of the
AEO program in the 27 Member States.

Operational – January 2009

Mutual Recognition – To Be Determined
 Mutual Recognition Security Model
U.S. Customs and Border Protection (CBP) - Customs-Trade Partnership Against Terrorism (C-TPAT)
Authorized Economic Operator (AEO)

LOW

EXPLANATIONS

Business security practices are known to

C-TPAT
both CBP and foreign program.
& AEO

C-TPAT Business security practices are known to

but No AEO CBP, but unknown to foreign program.

Business security practices are unknown to

No C-TPAT but AEO CBP, but known to foreign program.

Business security practices are unknown to

No C-TPAT & No AEO
both CBP and foreign program.

HIGH
RISK
Review
There are numerous ways that a supply chain can be
interrupted.
The goal of government-business partnership programs is to
institutionalize identifiable security procedures to protect the
global trade supply chain.
Mutual Recognition involves the alignment of security
requirements of different international programs.
Customs-Trade Partnership Against Terrorism

Questions?