CBP Update on C-TPAT Mutual Recognition (CBP to Discontinue Export Pilot)

Goal is to Recognize Another Country's Security Program

The concept of mutual recognition (MR) is that C-TPAT and a foreign industry partnership program are compatible in both theory and practice so that one program may recognize the validation findings of the other program.

CBP cautions that MR does not exempt any partner, whether domestic or foreign, from complying with other CBP mandated requirements. By the same token, mutual recognition does not replace any of CBP's cargo enforcement strategies. For example, importers still need to comply with the importer security filing requirements.

(The C-TPAT MR process involves the following four phases: (i) a side-by-side comparison of the program requirements; (ii) a pilot program of joint validation visits; (iii) the signing of a mutual recognition arrangement; and (iv) the development of mutual recognition operational procedures.

CBP Has Signed 4 MRAs, Working on MRAs with Korea, Singapore, and EU

CBP has already signed MR Arrangements with New Zealand (June 2007), Canada (June 2008), Jordan (June 2007), and Japan (June 2009).

CBP is working on reaching a MRA between C-TPAT and:

Korea's Authorized Economic Operator Program;

Singapore's Secure Trade Partnership Plus Program; and

European Union's Authorized Economic Operator Program.

(CBP and EU held 3 best practices workshops in fall 2009. CBP notes that the U.S. and EU have made great progress toward reaching MR and have already determined that both C-TPAT and the EU's AEO program are compatible in principle (the first phase towards MR). In order to move the process forward, three Best Practices workshops were held in Europe in fall 2009.

CBP notes that the most important phase of the MR process still needs to take place - joint validations or exercises in Europe to determine the degree of compatibility between C-TPAT and AEO on an operational level and how the European Commission manages the AEO program across the EU and ensures uniformity and consistency from Member State to Member State.)

Mexico Plans its Own Industry Partnership Program, CBP to Provide Assistance

CBP notes that Mexico currently does not have a security-based industry partnership program similar to C-TPAT in place but it is planning to develop and implement one soon. Mexican Customs requested C-TPAT's technical assistance and both Administrations are in the process of coordinating the logistics to do so. C-TPAT has provided technical assistance and guidance to the Mexican Government in the past and will continue to do so as Mexico develops and implements its own program. Mexican Customs has also participated in one of C-TPAT's internal trainings for its Supply Chain Security Specialists, and observed a C-TPAT validation.

CBP to Discontinue C-TPAT Export MR Pilot

According to CBP, C-TPAT was designed as an import based program and does not have an export security component. For mutual recognition purposes only, C-TPAT entered into a pilot project with a select group of C-TPAT members to consider specific procedures which would provide C-TPAT with an understanding of an importer's outbound security procedures. This pilot was not intended to replace or supersede the requirements of other U.S. Government agencies.

While the pilot revealed that it was feasible to establish formal minimum security criteria for exports, participants in the pilot questioned the associated threat of U.S. exports and

expressed concerns regarding the costs and legal issues associated with such an effort.

CBP does not intend to continue the pilot at this time.

Benefits of MRAs

CBP states that both Customs Administrations and the private sector reap benefits from a MRA, including:

Common Standard/Trade Facilitation. Companies only have to conform to one set of security requirements. Once a company complies with C-TPAT's criteria, that company essentially complies with the security criteria of those countries the U.S. has reached MR with: Japan, Canada, New Zealand, and Jordan. Also, since MR is based on having equally stringent minimum security criteria, companies will have an easier task when they have to conduct their required annual self-assessments.

Less Redundancy/Duplication of Efforts. Foreign companies do not have to go through two separate validation visits and companies would only have to go through one revalidation visit in the future.

Risk Assessment Tool. The status of the foreign partnership program participant is recognized by C-TPAT and it is used as a risk-assessment factor.

Efficiency. CBP does not have to expend resources to send its staff overseas to validate a facility that has been certified by a foreign partnership program.

Transparency. Closer collaboration among Customs Administrations and between Customs administrations and their partnership program companies should lead to more

transparency in international commerce

(See ITT's Online Archives or 03/03/10 news, 10030305, for BP summary of CBP official's discussion of C-TPAT at February 2010 COAC meeting.

See ITT's Online Archives or 02/18/09 news, 09021805, for BP summary of CBP's "roadmap" for achieving C-TPAT MR with the EU's AEO.

See ITT's Online Archives or 02/27/08 news, 08022705, for BP summary of CBP's status report on MR at February 2008 COAC meeting.)

CBP's MR frequently asked questions document (posted 03/10/10) available at http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/ctpat/mr/mutual_recog_faq.ctt/mutual_recog_faq.pdf.

CBP's MR summary (posted 03/10/10) available at http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/ctpat/mr/mutual_recog.ctt/mutual_recog.pdf.