CBP Officials Discuss C-TPAT Third Party Validation Pilot for China at May 15, 2007 COAC Meeting
During the May 15, 2007 meeting of the Departmental Advisory Committee on Commercial Operations of Customs and Border Protection and Related Homeland Security Functions (COAC), CBP officials discussed, among other things, the Customs-Trade Partnership Against Terrorism program.
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The following are highlights of the COAC discussion related to one of the C-TPAT issues - implementation of a "third party" validation pilot for China. (See ITT's Online Archives or 05/17/07 news, 07051705, for BP summary of the other C-TPAT issues discussed at this COAC meeting. See future issues of ITT for BP summaries on COAC discussions of other issues.)
CBP Received 24 Applications to Act as "Third Party" Validators
On March 27, 2007, CBP posted a procurement notice on the Federal Business Opportunities Web site announcing that a C-TPAT "third party" validation pilot for China would be conducted for approximately one year.
CBP's procurement notice also sought applications by April 30, 2007 from firms wishing to act as "third party" validators for C-TPAT importers that buy over 75% of their imports from China (approximately 300 C-TPAT importers are expected to be eligible1).
CBP officials state that they received 24 applications from parties interested in acting as "third party" validators under the pilot. Of those 24 applications, CBP noted that 7 have been determined not to have met the initial criteria regarding liability insurance.
CBP officials state that they currently have three C-TPAT field directors evaluating the remaining 17 applications. According to CBP, the applications will be judged on the applicants':
established presence in China,
demonstrated ability to perform validations based on CBP's standard operating procedures,
deployment of data collection technology comparable to what CBP uses, with electronic provision of validation results and documentation, and
outline of a training program for those that will be performing the validations.
In addition to the above, CBP will also consider the applicants' concurrence that they will subject their principles to background checks, provide a fee schedule, maintain liability insurance, are free from conflicts of interest, and have signed a nondisclosure agreement.
CBP Expects to Compile "Third Party" Validator List by End of May 2007
CBP expects to have the best qualified "third party" validator list available by the end of May 2007. The selected companies will then be given access to the list of 300 C-TPAT importers doing business in China who are eligible to volunteer for the pilot1.
The C-TPAT importers will be contacted to decide if it wants a C-TPAT "third party" validation, and if so, will select a validator from CBP's list2.
1This number includes 55 C-TPAT importers that source 100% of their imports from China, and 245 additional C-TPAT importers that source over 75% of their imports from China.
2CBP has previously stated that it will be contacting these 300 importers to offer them the opportunity to participate in this voluntary pilot. The volunteers selected will be given written notification and the contact information for the three or four Third Party Validators CBP has selected to participate. The C-TPAT importer will then be required to choose one of these Third Party Validators to conduct the foreign portion of their C-TPAT validation within 30 days, in order to initiate the validation process. CBP states it will determine the facilities to be visited, both domestic and abroad, including the point of stuffing, drayage of the container to the port of export, and the port of export. In addition, CBP will retain all decisions over the C-TPAT status of the importer.
(Only one Third Party Validator can be used by a C-TPAT importer, and there can be no conflicts of interest. In addition, the C-TPAT importer must agree to pay all costs associated with the validation. All contracts that are entered into by the Third Party Validator and the C-TPAT importer must be exclusively between the two parties and without government intervention.)
(On March 27, 2007, CBP posted a procurement notice on the Federal Business Opportunities Web site announcing that a C- TPAT "Third Party" Validation pilot would begin in China on approximately May 1, 2007. The pilot would be active for up to twelve months, until approximately May 1, 2008.
BP is verifying whether the pilot was actually initiated on May 1, 2007, and have an end date of approximately May 1, 2008, given that applications for 3rd party validators were due by April 30, 2007, and will update readers when new information is available. See ITT's Online Archives or 04/27/07 news, 07042705, for BP summary on 'start' of validation pilot.)