If you are importing a large volume of products from abroad and are not aware of the C-TPAT program administered by Customs and Border Protection (CBP), then you may want to consider the benefits of the program. C-TPAT is short for the Customs-Trade Partnership Against Terrorism, and participants in the program are six times less likely to undergo a security related cargo examination. Additionally, C-TPAT participants are four times less likely to be subject to a trade related examination than non-C-TPAT members. These significantly fewer cargo examinations help save importers time and money. (more…)

I know the title of this blog is Export Compliance Matters, but I feel compelled to provide evidence that  import compliance is also becoming a serious compliance risk. Customs and Border Protection (CBP) just announced Friday that the US government is owed 2.3 billion dollars in antidumping and countervailing duties alone. Moreover,  CBP  has issued several “informed compliance” letters encouraging prior disclosure of customs violations by warning the trade community that the CBP and Immigrations and Customs Enforcement are enforcing trade violations. The issuance of the letters comes in tandem with more sophisticated auditing techniques that CBP has developed to catch violations, including using customs data provided by CBP’s Automated Commercial Environment (ACE). (more…)

U.S. importers should reevaluate their compliance program as U.S. Customs and Border Protection (CBP)’s steps up its efforts to enforce payment of antidumping and countervailing duties. The efforts come at the heel of this February’s passage of the Trade Facilitation and Enforcement Act, which gave CBP new investigatory authority over claims that certain importers are not paying duties. A new interim final rule is expected by Aug. 22. Importers of steel and other goods from China should be especially cautious. (more…)

U.S. importers that are members of the Customs-Trade Partnership against Terrorism (C-TPAT), when serving as U.S. exporters of goods to the European Union (EU), will receive expedited Custom clearance, decreased inspection frequency, and other benefits when they export to European ports.  Similarly, companies that have Authorized Economic Operator (AEO) status in the EU will be treated like C-TPAT members when they import into the United States.  This represents full implementation of the May 2012 mutual recognition agreement between Customs and Border Protection (CBP) and the EU Taxation and Customs Union Directorate.

In order to take advantage of the benefits of mutual recognition, U.S. importers must be Tier 1 or Tier 2 C-TPAT members, meaning that the adequacy of their security measures and their requirements for business partners must have been “validated” following inspection by CBP.  Similarly, EU AEOs must be AEOSs or AEOFs, meaning that they have been validated following examination and inspection by the national authorities of an EU member state as compliant with the safety and security component (as opposed to just the Customs simplifications component) of the AEO program.

The primary benefits available to importers will be lower automated risk assessment scores given reciprocally to members of C-TPAT and EU AEOs.  This has the very real advantage of dramatically decreasing inspection frequency for member company’s shipments on both sides of the Atlantic, and member companies’ shipments that are selected for inspection are given priority over nonmembers’ shipments.  For those companies that would have become C-TPAT members and EU AEOs absent mutual recognition, the primary benefit is the elimination of the requirement of repeat examinations/audits by both U.S. and EU member state officials of the same aspects of their operations before the companies can benefit from trusted treatment by U.S. and European authorities.  The U.S. and the EU have similar mutual recognition agreements with other countries and are in the process of negotiating new ones.  This significantly increases the incentive to make the initial investment of time and money and get certified and validated under C-TPAT and/or another jurisdiction’s similar program.

We have covered the Customs-Trade Partnership against Terrorism (“C-TPAT”), a U.S. Customs and Border Protection program that entitles importers who have proven their compliance with its requirements to less frequent security inspections of their goods, before on this blog.

Global supply chain security has been a hot topic for years.  Containerized shipping has been identified as one of the weak points in border security.  After the terrorist attacks of September 11, 2001, the U.S. government instituted a number of new border and supply chain security measures.  To ease the burden on industry, U.S. Customs and Border Protection (“CBP”) created the Customs-Trade Partnership against Terrorism (“C-TPAT”). The C-TPAT program allows importers to prove and certify to CBP that they have adequate internal controls, training, and other security measures in place to ensure that their incoming cargo is secure and properly identified.  More than 10,000 U.S. importers now use C-TPAT because membership in the program greatly reduces the frequency of Customs inspections of their incoming goods, making the goods available in the U.S. sooner and decreasing costs in transit.

How do you become a C-TPAT partner?  While the exact requirements vary by industry, at minimum, you must:

  • Show how you have addressed past violations.
  • Explain your import compliance procedures to CBP in detail.  If you don’t present a strong initial application and you are denied, you have to wait 5 years to reapply.
  • Develop a security profile to show CBP all of your security procedures, focusing on the “nodes” that CBP thinks are most important.

What are some benefits of joining C-TPAT?

  • Reciprocity in other countries.  For starters, as of this year, you get beneficial import procedures in the EU.  And, the U.S. also has mutual recognition agreements with New Zealand, Canada, Jordan, Japan, South Korea, and Taiwan.
  • More and more businesses are demanding that their business partners become C-TPAT compliant.
  • Access to Free and Secure Trade (“Fast”) lanes at the Mexican and Canadian borders.
  • Priority processing of shipments that are subject to inspection.
  • C-TPAT is a prerequisite for the Importer Self-Assessment program, discussed here, which decreases the frequency of an importer’s Customs audits.

C-TPAT and reciprocal treatment can give your business an edge.  The certification process is tedious and does require a robust trade compliance program. Don’t do it alone though.  You must “dot your I’s and cross your T’s.”

Customs and Border Protection (“CBP”) is continuing efforts to maximize efficiency through the expansion of its industry focused contact Centers. The Centers of Excellence and Expertise, known as “CEEs” or “Centers,” were created to shift importer contact points from a geographically based locations to Centers substantively familiar with the industry.  Along with centralized communication, the Centers will be an industry one stop shop for CBP paperwork and documentation.  This will eliminate the current process of filing with various ports based on shipping location.

Currently, there are four active Centers in the U.S. serving the following industries:  Automotive and Aerospace, Electronics, Petroleum, Natural Gas & Minerals and Pharmaceuticals, and Health & Chemicals.  The initiative is well underway for the new year as CBP plans to open  ten new Centers to service the following industries: Industrial & Manufacturing Materials, Agriculture & Prepared Products, Base Metals, Machinery, Consumer Products & Mass Merchandising and Textiles, and Wearing Apparel & Footwear.

The benefits of Centers are two-fold.  First, Centers will allow CBP more oversight of specific industries and a better understanding of each industry’s practices.  Second, Centers will help streamline the import process for the importer through increased consistency, which is likely to result in reduced transaction costs.  According to CBP, the expansion is expected to result in new Centers across the U.S., and will cover the full range of imports within each specific industry.

How can you locate and utilize the Center pertinent to your business and industry?

CBP is actively looking for volunteers to work with Centers – watch out for Federal Register notices for more information on how to participate.  If you chose not to volunteer, your company can still access the Centers as an industry focused informational hub.

The contact information for active Centers can be found here.

How will the Centers affect your  imports?

If you chose to actively participate in a Center, the process for entry and entry summary will not change. However, the location of CBP entry documentation processing and other activities will be moved from the port of entry to the appropriate industry Center.  Since the Centers are “virtual,” they will not require importers to change ports or location of importation.  Instead, the Centers will serve as a virtual source of clear and consistent information on CBP requirements while allowing importers to continue using the most convenient port for their business needs.

What benefits will the centers provide for your business?

  • Streamlined processing of import documentation and communication at one centralized location;
  • Reduced transaction costs;
  • CBP contacts with specific industry knowledge; and
  • Centralized management of each industry’s imports.