CBP Issues C-TPAT Supply Chain Security Best Practices Catalog

According to CBP, the best practices included in this catalog are those that have been identified through more than 1,400 validations and site visits conducted by C-TPAT Supply Chain Security Specialists (SCSS), and are organized based on C-TPAT Security Criteria.

Over 6,000 Certified C-TPAT Members

CBP explains that C-TPAT is the largest and most successful government-private sector partnership to emerge from the terrorist attacks of September 11, 2001. C-TPAT was launched in November 2001, with just seven companies-seven major importers who embraced the necessity of supply chain security within the highest corporate management levels of their organizations. Today, more than 10,000 companies have applied for membership, and more than 6,000 have been accepted as certified partners.

(See ITT's Online Archives or 11/17/05 news, 05111705, for BP summary of CBP notice onf C-TPAT accomplishments as well as the benefits of C-TPAT membership. See ITT's Online Archives or 01/19/05 news, 05011905, for BP summary of CBP's strategic plan for C-TPAT, including its five major goals.)

Three-Tiered Benefits Structure for Importers

In May 2005, CBP states that it moved to a three-tiered benefits structure, where C-TPAT importers who do more, receive more (Tier Three is the highest level of benefits provided). According to CBP, a determination of Tier Three eligibility is based on the totality of the security measures employed, not on any specific practice(s), and whether or not the overall security environment effectively addresses the risk adherent to that specific international supply chain.

Tier One. Under Tier One, certified importers receive (1) meaningful risk score reductions, resulting in fewer cargo examinations for security concerns, (2) a lower level of random Compliance Measurement examinations than those afforded to non-C-TPAT importers, and (3) the negation of most trade cargo examine selectivity. These three conditions afford Tier One importers with a low level of examinations. Additionally, Tier One importers are eligible for expedited cargo processing at the border (FAST lanes at the land borders), receive 'front of line' inspection privileges at ports of entry should an examination be required, are entitled to certain penalty mitigation for Trade Act of 2002 violations, become eligible for the Importer Self Assessment program, and may attend C-TPAT training seminars.

Tier Two. With the additional commitment demonstrated as a result of having successfully undergone a validation, the validated importer then becomes eligible for Tier Two or Tier Three status. An importer whose validation reveals that minimum security criteria have been met will receive Tier Two benefits. Tier Two benefits include all the same benefits associated with Tier One, but Tier Two importers are provided with twice the level of risk score reductions received by Tier One importers, resulting in significantly fewer examinations for security reasons than those received by Tier One importers.

Tier Three. For those importers whose security measures exceed the minimum security criteria and have adopted "security best practices" as evidenced by the successful completion of a validation, Tier Three status is granted. Under Tier Three, all benefits associated with Tier One and Two are granted, and the most significant risk score reductions available are provided by CBP, resulting in infrequent examinations for security reasons.

CBP adds that Tier Three status can only be obtained by the presence of a corporate governance structure through which supply chain security is embraced at the highest levels of the company-the CEO, the COO, the President, etc. The security of a company's supply chain should be a required topic of discussion in corporate boardrooms. In addition, CBP states that supply chain security practices must be periodically reviewed for adequacy by CEOs and corporate boards, and noted deficiencies must be addressed timely.

Tier Three status is also the precursor for CBP's "Green Lane" which will afford members with zero inspections upon arrival except for an occasional random examination, contingent on meeting other "Green Lane" requirements (such as shipment through a Container Security Initiative (CSI) port and the use of a container security device). CBP intends to roll out the "Green Lane" in 2006 once effective container security technology becomes available.

Overview of Supply Chain Security Best Practices Catalog

CBP states that to help importers achieve the highest level of benefits provided, Tier Three benefits and the precursor to the "Green Lane," it has committed to outline "Security Best Practices" and work with members to adopt, modify, and implement those security best practices which will help take the member's security practices to the next level.

CBP indicates that the outlined "best practices" pertain to security procedures used throughout an international supply chain, such as conveyance monitoring and tracking, cargo tracing, preventing collusion, employee awareness, physical security and surveillance, and other areas crucial to supply chain security.

However, CBP notes that its Best Practices Catalog is not designed as a master check list, nor is it exhaustive or all-inclusive of best practices in the international supply chain-rather, it is intended to serve as a living document and will be updated periodically to reflect the best practices found during validations.

Examples of Supply Chain Security Best Practices

CBP includes numerous examples of best practices for C-TPAT supply chain security in its catalog, including the following company practices highlighted below (partial list):

Establishing security directors and country managers worldwide to ensure that supply chain security procedures are implemented and consistently followed by factories and service providers;

Sending security surveys to all foreign suppliers and service providers to identify risks and develop an action plan to address the vulnerabilities that were identified;

Assigning a specific account representative at the foreign freight forwarders office to a company's account to ensure continuity and detect unusual or suspicious activities;

Establishing a vendor compliance manual that outlines security requirements for overseas factories; and

Utilizing "Smart Box" technology sea containers to increase ability to determine whether or not a container has been compromised while moving through the supply chain.

CBP's Best Practices Catalog is available athttp://www.customs.gov/linkhandler/cgov/import/commercial_enforcement/ctpat/ctpat_best_practices.ctt/ctpat_best_practices.pdf