Securing and Facilitating Global Trade

Bradd Skinner U.S. Customs and Border Protection

Managing Risk Pre-Entry, Post-Release

U.S. Port of Eof Entry U.S. Port ntry

Before Arrival Segregate cargo by risk: Partnerships Intelligence Targe6ng At the Border Non-intrusive inspec6on Targeted exams and enforcement

A6er Release Verify compliance Partnerships Targe6ng Tari classica6on rulings Audits

Membership Breakdown (10,138)

Certified Members by Business Type 831 1135 61 4387
Importers - 4387 Carriers - 2858 Brokers - 866 Foreign Manufacturers - 1135

866

Consolidators/3PLs - 831 Marine Port Authorities and Terminal Operators - 61

2858
As of 5-24-11

C-TPAT Entry Values

Entry Counts
Tier II 20%

Entry Values ($1.4 Trillion Total)

Tier III 15%

NonCTPAT 63%

Tier II 21% Tier III 27%

NonCTPAT 50%

Tier III Importers 329 Partners 27% of Entry Value 15% of Entries

Validation Process

Reinstatement

Annual Self Assessment

Company Profile/ Security Profile

Removal

Suspension

Unannounced Visits

Portal

Best Practices
Post Incident Analysis (PIA)

Portal

Validation/ Revalidation

Action Plan

Revisits

Incident/ Failed Validation

Actions Required/90 Day Response

C-TPAT Minimum Security Criteria

Supply Chain Risk Assessment Business Partner Requirements Conveyance and Container Security Physical Access Security Personnel Security Procedural Security Physical Security Security Training and Threat Awareness Information Technology (IT) Security
Security Criteria & Guidelines can be found on the C-TPAT website:
http://cbp.gov/xp/cgov/trade/cargo_security/ctpat/security_criteria/

Conducting a Risk Assessment

Mapping the Cargo Flow Threat Assessment Vulnerability Assessment Action Plan and Follow-up Documenting the Process

Mapping Cargo Flow

End-to-End Supply Chain Security Solution

Securing the entire supply chain from end-to-end C-TPAT type measures.

Supply Chain Security

Standard Principles of a Validation

Verifying Evidence of Implementation Testing Authenticity of the Evidence Presented Ensuring Management Oversight and Accountability Verifying Consistency and Continuity of Established Security Procedures

Confirmed Best Practices

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.

Confirmed Best Practices

Inspection of providers facilities by participant personnel (e.g. duel Quality Control / Security visit, audit 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

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)

Validation Reports To Include Scorecard

Supply Chain Security Risk Assessment (100)

Collaborative effort with members of the trade, and C-TPAT personnel.

Business Partner Requirements (100)

Container / Conveyance / Transport Security (100)

Procedural Security (100)

Physical Access Controls (100) Personnel Security (100) Security Training and Threat Awareness (100) Information Technology Security (100)

C-TPAT Benefits Customs Based

Reduced Inspections Established point of contact in CBP (SCSS) through dedicated Internet Portal access Use of Free and Secure Trade (FAST) Front of the line treatment for exams Business Continuity Considerations Access to other members through Status Verification Indicator

Access to CBP/C-TPAT Penalty Mitigation CBP/C-TPAT Training Seminars and Assistance Best Practices Catalogue

FY10 Most Costly Exams

Non-Intrusive: 2.0 2.3 times less Intrusive: 3.2 6.7 times less Intensive: 3.4 7.8 times less DEVAN: 4.4 7.3 times less

Non-Intrusive Intrusive Intensive DEVAN Non-CTPAT

*Excludes Rail

All
Vessel 53%

Air 36% Truck 9%

CTPAT Member

Tier III

FY10 Truck Entry Exams

DEVAN: 3.1 3.8 times less Intrusive: 2.7 4.0 times less Intensive: 2.8 4.2 times less

Intrusive Intensive DEVAN Non-CTPAT CTPAT Member Tier III

All

Truck 9%

C-TPAT Benefits Trade Based Security

Good Corporate Citizen Product and Brand Protection
Partnering with Other Government Programs

Efficiency
Reduced Entry Costs Timely Product Delivery Increased Productivity Enhanced Marketing Competitive Advantage Leveraging Information Resiliency

Protecting Corporate Information

Better Use of Resources

C-TPATs International Strategy

Partnering with the international trade community to help secure global supply chains. Partnering with individual Customs administrations. Support the work of international organizations such as the World Customs Organization (WCO) and the Asia Pacific Economic Council (APEC). Support the work of private sector organizations to improve the security and integrity requirements of their membership.

Partnering with Individual Customs Administrations

Providing Training and Technical Assistance Negotiating and Reaching Mutual Recognition Arrangements Working With Key Partners to Develop Additional Mechanisms to Accomplish the Mission

AEO Programs around the World

Canada USA Norway European Union Korea

China

Switzerland Jordan Malasia Argentina Singapore Japan

Taiwan

New Zealand

MRAs Around the World

New Zealand Canada Jordan Japan Korea USA Mutual RecogniFon Arrangements Korea Singapore Canada EU Switzerland Norway Japan

New Zealand

Japan

Singapore Korea

Japan

Mutual Recognition Security Model

LOW
EXPLANATIONS " Business security practices are known to both CBP and foreign program.

C-TPAT & AEO C-TPAT but No AEO

" Business security practices are known to CBP, but unknown to foreign program.

No C-TPAT but AEO

" Business security practices are unknown to CBP, but known to foreign program. " Business security practices are unknown to both CBP and foreign program.

No C-TPAT & No AEO

HIGH RISK

Mutual Recognition What It Is

Bilateral understanding between two Customs Administrations Security requirements or standards of the foreign industry partnership program, as well as its verification procedures, are the same or similar with those of the C-TPAT program. Based on security only / Compliance Issues Fall Outside the Scope of the MRA. Goal - 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

Mutual Recognition - Basics

Four Step Process: Side by side comparison of program requirements Joint validations Actual signing of the document Implementation

Pre-Requisites: Foreign Customs Administration must have an operational program in place Methodology in place to review and validate their members Program must have a security component to it

MR Benefit Lower Targeting Score

Japanese AEO C-TPAT Importer Receives Benefits Through IOR in CBPs Internal Systems Non C-TPAT Importer Japanese AEO AEO Member Receives Tier I Benefits in ATS Thorough its MID Lower Targeting Score = Less Inspections

MR Benefit Less Redundant Validations

C-TPAT Importer Sourcing From Japan Due for a C-TPAT Validation or Re-Validation

If Local Company to Be Visited in Japan is AEO

C-TPAT Accepts the Status of the AEO Manufacturer NO C-TPAT Foreign Site Visit Takes Place

Mutual Recognition
.it is well understood by all that mutual recognition is evolutionary rather than revolutionary in character. It will develop over time, probably first through bilateral agreements which can mature into multilateral and even groups of interconnecting multilateral pacts. Michael Schmitz WCO Director Compliance and Facilitation WCO News February 2008

Next Steps
Strengthen Existing, Developing Relationships Engage with Other Customs Administrations Towards a MRA Support DHS as it Develops a National Strategy on Global Supply Chain Security Work Closely with the WCO and APEC