CBP Issues Year-End FY 2010 Import Trade Trends Report (Part I - C-TPAT, ISA, Etc.)

This is Part I of a multipart series of summary on this report and focuses on CBP’s partnership programs. See future issue of ITT for statistics from the report, etc.

C-TPAT, ISA are Most Successful Partnership Programs

According to CBP, the two of the most successful partnership programs, the Customs-Trade Partnership Against Terrorism (C-TPAT) and the Importer Self-Assessment (ISA) program are perceived very differently - although both were launched after September 2001.

C-TPAT More Popular with Trade

Businesses have uniformly embraced C-TPAT, a voluntary program that was designed to strengthen and improve international supply chain and U.S. border security. C-TPAT currently has more than 10,000 members and has earned the distinction of being the first and largest anti-terrorism partnership program worldwide.

ISA Has Not Grown as Quickly

The ISA program has a financial focus. Although the program has also been successful, it has not grown as quickly as C-TPAT. Many importers have viewed the ISA program as being only for “big companies,” but CBP says this is not true. Like C-TPAT, the ISA program was designed so that all businesses, regardless of size, could participate and realize benefits.

Trusted Partners Have Higher Compliance Rates, Get Fewer Penalties

Trusted Partners uphold commitment to ISA and C-TPAT accords. CBP uses a trade compliance measurement (TCM) rate to confirm that the government collects the revenue owed on imported goods. The TCM rates for partnered and managed accounts consistently exceed the rate for non-managed accounts.

Moreover, the overall values of imports by CBP’s Trusted Partnership Programs participants accounted for about $1 trillion and approach 35% of annual workload by entry counts in FY 2010. By comparison, accounting for 65% of the annual workload, the value of non-partnered imports is about $900 billion.

CBP’s Trusted Partners garner fewer overall monetary penalties incurred pursuant to 19 USC 1592 than non-partner importers. Classified as Fraud, Negligence and Gross Negligence, on average, from FY 2005 - FY 2009, about 88% of cases under Section 592 that CBP established are against non-partnered importers.

CBP Piloting Other Partnership Programs

CBP actively sought input from the trade community regarding preliminary proposals to create industry-specific partnerships. The information sharing efforts resulted in the launch of several pilot programs, including ISA- Product Safety, Center of Excellence and Expertise and Account Executive pilots.

ISA-PS. In October 2008, CBP, in cooperation with the U.S. Consumer Product Safety Commission (CPSC), announced the expansion of the CBP’s ISA program to include a product safety component, the ISA-PS as a pilot program. CBP and CPSC are currently reviewing and evaluating the ISA-PS pilot to measure its effects, achievements and recommend whether ISA-PS pilot shall become a permanent program.

The primary objectives of the ISA-PS voluntary program are to maintain a high level of product safety compliance through a cooperative partnership between CBP, CPSC and the importer and to achieve the goals of the Interagency Working Group on Import Safety by working collaboratively to prevent unsafe imports.

(See ITT’s Online Archives or 10/1510 news, 10101519, for BP summary of CPSC discussing the pilot, etc.)

Center of Excellence and Expertise and the Account Executive Pilot Programs. In November 2010, CBP launched two pilots: the Center of Excellence and Expertise, and the Account Executive to further strengthen the agency’s relationships with trade and business partners.

The Center of Excellence and Expertise (CEE) pilot will develop comprehensive strategies to facilitate trade and manage risk within the pharmaceutical industry. CEE is expected to drive uniform implementation of policies, procedures, and technical guidance within the sector. Further, CEE’s core staff will manage sector risk by leveraging communication between CBP personnel and pharmaceutical expertise. This initiative will also evaluate opportunities to collaborate with other government agencies on pharmaceutical imports.

The Account Executive (AE) pilot will test CBP’s ability to engage trusted partners in the electronics industry to facilitate trade while ensuring continued compliance with all import requirements. Successful engagement will enhance CBP’s ability to formalize an account-based approach to dealing with trusted (low-risk) trade partners, remove transactional hurdles and other barriers for trusted partners and enable CBP to focus its resources on higher-risk companies and shipments.

(See ITT’s Online Archives or 10/26/10 news, 10102613, for BP summary announcing CBP’s launch of these two programs.)