CBP Signs Agreement with China on Supply Chain Security
05/26/10 11:30 PM
On May
26, 2010, U.S. Customs and Border Protection
(CBP) announced the signing of
a Memorandum of Understanding with the General
Administration of Customs of the People’s
Republic of China on Supply Chain Security and
Facilitation. CBP considers the CBP-China
Customs Memorandum of Understanding to be a key
component of a cooperative security and trade
relationship between the two nation’s customs
agencies.
“This memorandum will create a cooperative mechanism for CBP and the General Administration of Customs to collaborate on supply chain security standards and enhance CBP’s implementation of a layered enforcement strategy,” said Deputy Commissioner David Aguilar, who signed the MOU on behalf of CBP.
The MOU was signed during the Strategic and Economic Dialogue, which took place in Beijing May 24 – 25. The Strategic and Economic Dialogue is an ongoing mechanism for addressing the challenges and opportunities that the U.S. and China share on a wide range of bilateral, regional, and global areas of immediate and long-term strategic and economic interest.
“This memorandum will create a cooperative mechanism for CBP and the General Administration of Customs to collaborate on supply chain security standards and enhance CBP’s implementation of a layered enforcement strategy,” said Deputy Commissioner David Aguilar, who signed the MOU on behalf of CBP.
The MOU was signed during the Strategic and Economic Dialogue, which took place in Beijing May 24 – 25. The Strategic and Economic Dialogue is an ongoing mechanism for addressing the challenges and opportunities that the U.S. and China share on a wide range of bilateral, regional, and global areas of immediate and long-term strategic and economic interest.
CBP To Permit Third Party Logistics Providers to Enroll in C-TPAT Starting January 2009
10/01/08 12:30 AM
On September 30, 2008, U.S. Customs and Border
Protection (CBP)
announced
that it will permit Third Party Logistics Providers
(3PLs) to enroll in the Customs-Trade Partnership
Against Terrorism (C-TPAT)
program starting in January 2009.
A 3PL is a firm that provides outsourced or “third party” logistics services to some, or sometimes all of a company’s supply chain management functions. 3PLs typically specialize in integrated warehousing and transportation services that can be customized to a customer’s needs based on market conditions and the demands and delivery service requirement for their products and materials. Typical outsourced logistics functions include inbound freight, customs and freight consolidation, and warehousing.
C-TPAT will provide for an implementation period to accept applications. The automated application process will take approximately 90 days to be available on-line. 3PLs interested in applying for C-TPAT can review the minimum-security criteria here.
The regulated minimum-security criteria areas include:
Effective January 1, 2009, these new minimum-security criteria establish the baseline level of security measures. All eligibility requirements must be met or exceeded for a 3PL to enroll in C-TPAT. CBP will continue to use validations to determine whether 3PLs have adopted these security criteria. Those 3PLs found to be deficient, may be suspended, or be removed from the program entirely.
A 3PL is a firm that provides outsourced or “third party” logistics services to some, or sometimes all of a company’s supply chain management functions. 3PLs typically specialize in integrated warehousing and transportation services that can be customized to a customer’s needs based on market conditions and the demands and delivery service requirement for their products and materials. Typical outsourced logistics functions include inbound freight, customs and freight consolidation, and warehousing.
C-TPAT will provide for an implementation period to accept applications. The automated application process will take approximately 90 days to be available on-line. 3PLs interested in applying for C-TPAT can review the minimum-security criteria here.
The regulated minimum-security criteria areas include:
- Business partner requirements (service provider screening; customer selection)
- Security procedures
- Container/trailer inspection, seals, storage, security (where applicable)
- Physical security and access controls
- Procedural security (document processing, manifesting, shipping & receiving)
- Information Technology (IT) security
- Security training and threat awareness
Effective January 1, 2009, these new minimum-security criteria establish the baseline level of security measures. All eligibility requirements must be met or exceeded for a 3PL to enroll in C-TPAT. CBP will continue to use validations to determine whether 3PLs have adopted these security criteria. Those 3PLs found to be deficient, may be suspended, or be removed from the program entirely.
GAO Issues Report Critical of C-TPAT Progress
05/27/08 08:17 PM
On April
25, 2008, the U.S. Office of Government
Accountability Office (GAO) issued a report on the
status of the Customs-Trade Partnership Against
Terrorism (C-TPAT) program entitled,
"U.S. Customs and
Border Protection Has Enhanced Its Partnership
with Import Trade Sectors, but Challenges Remain
in Verifying Security
Practices."
Highlights can be found here
and a
summary can be found here.
In 2005, GAO reviewed the C-TPAT program and noted operational challenges. Under the program, roughly 8,000 importers, port authorities and air, sea and land carriers are granted benefits such as reduced scrutiny of their cargo. In exchange, the companies submit a security plan that must meet U.S. Customs and Border Protection's minimum standards and allow officials to verify their measures are being followed. For this report, GAO was asked to assess the progress U.S. Customs and Border Protection (CBP) has made since 2005 in (1) improving its benefit award policies for C-TPAT members, (2) addressing challenges in validating members' security practices, and (3) addressing management and staffing challenges.
Among the problems the GAO found were:
"Until Customs overcomes these collective challenges, Customs will be unable to assure Congress and others that C-TPAT member companies that have been granted reduced scrutiny of their U.S.-bound containerized shipments actually employ adequate security practices," investigators wrote. "It is vital that Customs maintain adequate internal controls to ensure that member companies deserve these benefits."
Responding in part, CBP officials in the report agreed they could do more to follow up on suggested security improvements but noted that employees often use their expert discretion in assessing the potential danger before certifying a company. CBP also said the program overall has made the nation safer.
In sum, GAO recommends that CBP improve its electronic validation instrument, improve the validation process, enhance its records management system, and establish performance measures for improving supply chain security. CBP concurred with each of its recommendations.
In 2005, GAO reviewed the C-TPAT program and noted operational challenges. Under the program, roughly 8,000 importers, port authorities and air, sea and land carriers are granted benefits such as reduced scrutiny of their cargo. In exchange, the companies submit a security plan that must meet U.S. Customs and Border Protection's minimum standards and allow officials to verify their measures are being followed. For this report, GAO was asked to assess the progress U.S. Customs and Border Protection (CBP) has made since 2005 in (1) improving its benefit award policies for C-TPAT members, (2) addressing challenges in validating members' security practices, and (3) addressing management and staffing challenges.
Among the problems the GAO found were:
- A company is generally certified as safer based on its self-reported security information that Customs employees use to determine if minimum government criteria are met. But due partly to limited resources, the agency does not typically test the member company's supply-chain security practices and thus is "challenged to know that members' security measures are reliable, accurate and effective."
- Customs employees are not required to utilize third-party or other audits of a company's security measures as an alternative to the agency's direct testing, even if such audits exist.
- Companies can get certified for reduced Customs inspections before they fully implement any additional security improvements requested by the U.S. government. Under the program, Customs also does not require its employees to systematically follow up to make sure the requested improvements were made and that security practices remained consistent with the minimum criteria.
"Until Customs overcomes these collective challenges, Customs will be unable to assure Congress and others that C-TPAT member companies that have been granted reduced scrutiny of their U.S.-bound containerized shipments actually employ adequate security practices," investigators wrote. "It is vital that Customs maintain adequate internal controls to ensure that member companies deserve these benefits."
Responding in part, CBP officials in the report agreed they could do more to follow up on suggested security improvements but noted that employees often use their expert discretion in assessing the potential danger before certifying a company. CBP also said the program overall has made the nation safer.
In sum, GAO recommends that CBP improve its electronic validation instrument, improve the validation process, enhance its records management system, and establish performance measures for improving supply chain security. CBP concurred with each of its recommendations.
CBP and EU Commission Adopt a Joint Roadmap Towards Mutual Recognition of Trade Partnership Programs
03/28/08 12:31 PM
On
March 27, 2008, U.S. Customs and Border
Protection announced the adoption of
the U.S.-EU Joint Customs Cooperation Committee
(JCCC) Roadmap towards Mutual Recognition of
Trade Partnership Programs. Mutual Recognition
of the U.S.'s Customs-Trade Partnership Against
Terrorism (C-TPAT) and the EU's Authorized
Economic Operator (AEO) supply chain security
programs would allow companies to receive
benefits similar to those conferred on companies
participating in the other country's program.
The Roadmap outlines six areas that the U.S. and the EU will address to achieve the goal of implementing Mutual Recognition: political, administrative, legal, policy, technical/operational, and evaluation. The Roadmap sets forth key benchmarks for measuring progress in each area.
The U.S. and EU began working towards implementing Mutual Recognition of C-TPAT and AEO in 2007. The initial steps consisted of completing an in-depth comparison of both the U.S. and EU programs and conducting a pilot program in which CBP observed security components of the EU's AEO audit process. The Roadmap was drafted and endorsed based on the conclusions drawn from the initial U.S.-EU effort.
CBP states that, "Throughout the upcoming year, the U.S. and EU will:
The Roadmap outlines six areas that the U.S. and the EU will address to achieve the goal of implementing Mutual Recognition: political, administrative, legal, policy, technical/operational, and evaluation. The Roadmap sets forth key benchmarks for measuring progress in each area.
The U.S. and EU began working towards implementing Mutual Recognition of C-TPAT and AEO in 2007. The initial steps consisted of completing an in-depth comparison of both the U.S. and EU programs and conducting a pilot program in which CBP observed security components of the EU's AEO audit process. The Roadmap was drafted and endorsed based on the conclusions drawn from the initial U.S.-EU effort.
CBP states that, "Throughout the upcoming year, the U.S. and EU will:
- Establish guidelines regarding information exchanges, including the exchange of validation/audit results and legalities associated with the disclosure of membership details
- Perform joint verifications to determine remaining gaps between AEO/C-TPAT and resolve any discrepancies
- Explore and test an export component for C-TPAT
- Exchange best practices through joint visits and conferences
- Continue dialogue on legal and policy developments under the respective administrations
- Endorse and sign a Mutual Recognition Arrangement
- Evaluate Mutual Recognition benefits for AEO/C-TPAT members
China and U.S. Launch Trade Security Pilot Program
03/25/08 10:01 AM
On March 24, 2008, U.S. Customs and Border
Protection (CBP)
announced
the start of a validation pilot program in China
made possible by cooperation between CBP and the
General Administration of China Customs. The pilot
program involved three Customs-Trade Partnership
Against Terrorism (C-TPAT) importer partners whose
supply chains predominately originate in China.
CBP states that the U.S. companies were invited to participate based upon several factors including volume, product type, and location of their supply chains in China. The companies voluntarily agreed to participate in the pilot program with the concurrence of both administrations.
China Customs led the validations based on C-TPAT minimum security criteria as a guide and with CBP supply chain specialists providing technical assistance. Prior to the validations, the companies were receiving minimal C-TPAT benefits due to CBP's inability to validate their security procedures in China. However, the information gathered during the validation will now allow CBP the ability to assess whether greater C-TPAT benefits are warranted. Both CBP and China Customs will evaluate the success of the pilot program and determine next steps.
C-TPAT Director Brad Skinner stated, "It took several months of intense discussions to get to this point and we look forward to continuing this effort as we explore future cooperation. It is a win-win for all. CBP and China Customs have the knowledge that all parties involved have good security practices in place and the companies can benefit by receiving fewer exams."
CBP states that the U.S. companies were invited to participate based upon several factors including volume, product type, and location of their supply chains in China. The companies voluntarily agreed to participate in the pilot program with the concurrence of both administrations.
China Customs led the validations based on C-TPAT minimum security criteria as a guide and with CBP supply chain specialists providing technical assistance. Prior to the validations, the companies were receiving minimal C-TPAT benefits due to CBP's inability to validate their security procedures in China. However, the information gathered during the validation will now allow CBP the ability to assess whether greater C-TPAT benefits are warranted. Both CBP and China Customs will evaluate the success of the pilot program and determine next steps.
C-TPAT Director Brad Skinner stated, "It took several months of intense discussions to get to this point and we look forward to continuing this effort as we explore future cooperation. It is a win-win for all. CBP and China Customs have the knowledge that all parties involved have good security practices in place and the companies can benefit by receiving fewer exams."