House Homeland Security Committee Advances C-TPAT Reauthorization Bill

The bill would authorize CBP to establish additional and updated security criteria to phase in to address vulnerabilities in the supply chain, after consulting with COAC, conducting a cost-benefit analysis and determining operational feasibility. However, the commissioner could waive the consultation requirements upon finding a “significant and imminent risk to the national security of the United States and such a waiver is necessary to protect such national security.” C-TPAT participants would then have 90 days to review and comment on the proposed security criteria.

The committee by voice vote also adopted an amendment pitched by Rep. Lou Correa, D-Calif., that would require the CBP commissioner no later than 120 days after issuing such a waiver to announce on CBP’s website and “other appropriate online publication” the agency’s intent to either withdraw or maintain the waiver amid efforts to establish the minimum, additional or updated security criteria. CBP is currently in the process of updating minimum security criteria for the program (see 1611150030).

The legislation would require CBP to publicize an annual assessment of tangible benefits being realized by program participants, and outline minimum benefits to be provided to program participants. These benefits include assignment of a CBP supply chain security specialist for each participant, access to the C-TPAT Web portal and training materials, and a “periodic and unclassified update” on international supply chain threats.

While H.R. 3551 would still require CBP to complete the certification process for Tier 1 participants within 90 days of receiving an application, it would also add new language for potential benefits that may be extended to Tier 2 and 3 participants. In addition to the current benefits, the bill also identifies benefits to be provided in the form of access to Free and Secure Trade (FAST) lanes at U.S. ports of entry, recognition as a trusted trader by other customs administrations that have signed mutual recognition arrangements (MRAs) with CBP, and eligibility for importers to participate in CBP’s importer self-assessment (ISA) program. The bill would require the CBP commissioner to develop a schedule and update the guidelines and criteria for validating a Tier 2 participant’s security measures and supply chain security practices no later than 180 days after enactment.

The bill also proposes to delegate the responsibility for developing requirements for Tier 3 participants from the Department of Homeland Security secretary to the CBP executive assistant commissioner of the Office of Field Operations (OFO). The legislation also includes new language for Tier 3 benefits. The bill says CBP benefits for Tier 3 participants could include “front-of-the-line inspections and examinations,” shorter wait times at U.S. ports of entry, access to FAST lanes, trusted trader recognition by overseas customs administrations that have MRAs with CBP, importer eligibility for ISAs, and exemption from stratified cargo exams, apparently regardless of whether Tier 3 participants also do ISAs.

Tier 2 and 3 importers that participate in ISAs are currently eligible for special accommodations under CBP’s stratified exam benefit, which allows importers to move untargeted containers to its premises when only one container is targeted for examination. Non-C-TPAT members are not allowed to move unexamined containers until the exam of the targeted one is completed. Furthermore, the bill would eliminate current statutory language saying that Tier 3 participants could be included “in joint incident management exercises, as appropriate.”

The bill would also formally create the position of C-TPAT director, to be overseen by CBP’s OFO executive assistant commissioner. It would newly authorize the OFO executive assistant commissioner to suspend or expel participants from C-TPAT “for an appropriate period of time” after determining that a participant poses “significant and imminent risk to the national security of the United States or has committed a serious violation of Federal law or customs regulations.” Participants could file an appeal with the CBP commissioner no later than 30 days after the date of such decisions, and the commissioner would be required to issue a determination no later than 90 days after appeal.

Further, the bill would codify a new annual recertification process for all participants, in addition to Tier 2 and 3 revalidation processes that take place every four years. The recertifications would involve background checks and a review of companies’ security profiles and supporting documentation to ensure adherence to minimum security criteria. As part of the every-four-years revalidations for Tier 2 and 3 participants, the bill would newly codify a requirement for on-site assessments at “appropriate foreign and domestic locations” used by covered participants involved in international supply chains. The bill would also require that only designated direct C-TPAT company employees can respond to any CBP revalidation report, and prohibit third parties from responding on those participants’ behalf.

The reauthorization would also require Tier 2 and 3 entities to provide any trusted trader report conducted by a foreign government that has an MRA with CBP upon the request of CBP. Yet the bill also states that CBP may recognize foreign governments’ revalidations as sufficient to constitute a C-TPAT revalidation, though it clarifies that CBP is not required to recognize such revalidations for C-TPAT purposes. “Regulatory inspections” by DHS components outside of CBP would also be able to be formally recognized by CBP as constituting validation for C-TPAT program participation, yet the bill wouldn’t hold CBP to that option.

Under the bill, a CBP report on certifications and validations of C-TPAT program participants would be due to Congress on the same date the President’s Budget is submitted to Capitol Hill. The committee adopted a second Correa amendment that would require OFO’s executive assistant commissioner to conduct an annual assessment of C-TPAT benefits, to include projected milestones and completion dates for addressing data reliability issues and, as necessary, correcting data weaknesses, so CBP can compare accurate assessments year-to-year, the amendment states.

Finally, the committee adopted an amendment proposed by Rep. Nanette Barragan, D-Calif., that proposes to create a standardized process for the OFO executive assistant commissioner to receive reports of suspicious activity, including regarding potentially compromised cargo or other border or national security concerns. The amendment seeks to require the CBP commissioner to engage with and provide guidance to C-TPAT participants and other “appropriate stakeholders” in submitting such reports. The legislation would take effect and apply starting 30 days after enactment, except in the case of participants in C-TPAT as of that time, which would be subject to the bill’s requirements upon revalidation. They will be subject to existing law until that point, the bill text states.

McSally during the markup noted that the legislation has drawn the support of the U.S. Chamber of Commerce, the National Retail Federation, the Express Association of America, and the Transportation Intermediaries Association. Elizabeth Schmelzinger, C-TPAT director at CBP, didn’t comment on the legislation. The bill now goes to the full House for consideration.

Email ITTNews@warren-news.com for copies of the adopted Correa and Barragan amendments.