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Update: Customs-Trade Partnership
Against Terrorism

February 22, 2002

Customs has announced new information regarding the eligibility and application processing for participation in the Customs-Trade Partnership Against Terrorism (C-TPAT). The details of the C-TPAT is still to be finalized by Customs; it is generally considered a cooperative relationship with the goal of strengthening overall supply chain and border security.


The C-TPAT will be open to a broad spectrum of the trade community, including importers, carriers, brokers, warehouse operators, and manufacturers. Customs has already selected five volunteer importers to participate in C-TPAT and will be shortly including others.


The chief benefits of participation include:

(1) a reduced number of inspections (reduced border times);

(2) an assigned account manager (if one is not already assigned);

(3) for current Low Risk Importers (LRIs), an opportunity to expand "low-risk" treatment to all divisions within the company; (Customs has previously stated that a low-risk designation is assigned by IRS number and that it is possible that only certain divisions within a company would be eligible for low-risk designation.)

(4) access to the C-TPAT membership list;

(5) eligibility for account-based processes (e.g., bimonthly/monthly payments);

(6) an emphasis on self-policing, not Customs verifications;

(7) increased security assurances for employees

While the benefits of C-TPAT are obviously greater for large companies that rely heavily on international supply chains, the C-TPAT is designed for the entire trade community and Customs encourages all companies to apply.

LRIs To Receive Immediate Benefits

Low-risk importers (LRIs) will be accepted into C-TPAT upon submission of a signed C-TPAT agreement. According to Customs, such LRI applications will be expedited, since these companies have already been evaluated for risk and the benefits under C-TPAT will begin immediately.

Other Companies Must Undergo A Customs' Risk Assessment

For companies other than LRI importers, C-TPAT benefits will not begin until Customs has completed a company risk assessment encompassing both security and trade compliance. These evaluations are expected to be completed within 30-60 days after the applicant submits a supply chain security questionnaire.

Liabilities and Commitment Levels

Customs states that the intent of C-TPAT is not to impose security requirements that will be cost prohibitive and that potential C-TPAT participants may find that they already have many of these guidelines in place.

C-TPAT is also not intended to create any new "liabilities" for companies beyond existing trade laws and regulations. However, we advise that a sound legal review process should require that all disclosures to Customs are reviewed by a competent Customs attorney to ensure that the company does not inadvertently expose an existing liability. Customs believes that the C-TPAT should not duplicate work for current Customs Carrier Initiative Program (CIP) participants.

C-TPAT participation requires the filing of a formal C-TPAT agreement committing the applicant to undertake the following:

(1) Conduct a comprehensive self-assessment of supply chain security using C-TPAT security guidelines jointly developed by Customs and the trade community which address procedural security, physical security, personnel security, education and training, access controls, manifest procedures, and conveyance security;

(2) Complete and submit a supply chain security questionnaire to Customs;

(3) Develop and implement a program to enhance security throughout the supply chain in accordance with C-TPAT guidelines; and

(4) Communicate C-TPAT guidelines to other companies in the supply chain and work toward building the guidelines into relationships with these companies.

Customs warns that if a company fails to uphold its C-TPAT commitments, Customs would take action to suspend benefits or cancel participation.

Other Customs Initiatives in Anti-Terrorism and Security


Since September 11, 2001 the top priority of Customs has been responding to the continuing threat at U.S. land borders, seaports, and airports. According to Commissioner Bonner, Customs anti-terrorist efforts have included:


Office of Anti-Terrorism. Customs has established a new Office of Anti-Terrorism within Customs headed by an experienced security expert and senior military leader;


Operation Green Quest. Operation Green Quest was formed as a joint investigative team to fight against terrorist financing. It is led by Customs and supported by the Internal Revenue Service (IRS), Secret Service, and other Treasury Department bureaus, as well as the FBI and the Justice Department;


Operation Shield America. Customs has been working under Operation Shield America to monitor exports of strategic weapons and materials from the U.S. and that since the inception of the program, Customs agents have visited approximately 1,000 companies in the U.S. that manufacture or sell items that may be sought by terrorists or state sponsors of terrorism.


Office of Border Security. Customs has established the Office of Border Security to help Customs officers in the field. The mission of the office is to develop more sophisticated anti-terrorism targeting techniques for cargo and passengers in each border environment.


U.S.-Canada Smart Border Declaration. The US has worked with Canada to harmonize security and commercial processing and that the US and Canada have agreed to a 30-point "Smart Border Declaration."


Container Security Initiative. In January 2002, Commissioner Bonner proposed a Container Security Initiative (CSI) to address the vulnerability of cargo containers to the smuggling of terrorists and terrorist weapons. The initiative would begin with the mega ports that export to the US to develop a uniform standard for targeting and screening cargo before it is shipped. The core elements of a sea container security strategy include:


(1) establishing security criteria for identifying high-risk containers (i.e., those containers that potentially pose a risk);


(2) prescreening the high-risk containers before they are shipped to the US;


(3) using technology to prescreen high-risk containers; and


(4) developing smart boxes, smart and secure containers with e-seals and light sensors that will indicate to Customs if the container has been tampered with, particularly after it has been prescreened


U.S.-Mexico Eight-Point Declaration. The US is now working with Mexico on an eight-point declaration that would commence unprecedented cooperation and information sharing regarding incoming goods and passengers along the U.S.-Mexico border.


Heightened Customs Inspections. The percentage of Customs inspections has increased significantly since the 9/11 attacks.


Support for Senate Bill 1214. The Senate's passage of S. 1214 was characterized by Customs as a giant stride toward enactment of legislation that will equip Customs with the tools, technology, and information it needs to bolster US defenses against international terrorism. S. 1214 would require submission of advance shipping manifests which are now to be strictly voluntary. By mandating advance information for outbound as well as inbound passengers and cargo, S. 1214 would expand on Customs' successful efforts to require airlines to submit passenger manifests to the Advance Passenger Information System (APIS).


Copyright 2002 by Tuttle Law Offices.

All rights reserved. Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.



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