Becoming a member of the United States’ Customs and Border Protection’s CTPAT Trade Compliance Program will improve your import operations. In other words, membership has its privileges.
My last customs and trade blog post discussed how importers can minimize United States Customs and Border Protection (CBP) entry examinations and expedite cargo clearances by undertaking the supply chain security measures entailed in becoming CTPAT-certified. Though participating in the U.S. Customs-Trade Partnership Against Terrorism (CTPAT) program is an important first step for importers to save time and money, it is only half of a larger story. This blog post takes up the second half of the 1-2 punch available to importers to maximize the efficiency of their import operations – the CTPAT Trade Compliance Program.
Where the CTPAT focuses on supply chain security, the CTPAT Trade Compliance Program focuses (as its name suggests) on compliance. Formerly known as the Importer Self-Assessment (ISA) program, this program, like the CTPAT, incentivizes importers to enter into a collaborative relationship with CBP (and select partner government agencies) to develop and implement internal controls for managing and monitoring their own compliance through self-assessment, and, ultimately, maximizing the entry of admissible merchandise. The fundamental premise underlying the CTPAT Trade Compliance Program is simple: U.S. importers with robust internal controls achieve the highest levels of compliance. And, by extension, these importers experience the lowest levels of delay and disruption. Viewed in this light, the program is as good for the government as it is for importers.
The baseline eligibility requirements for securing membership in the CTPAT Trade Compliance Program are not for the faint of heart. In addition to conditioning eligibility on either prior CTPAT certification (Tier II or III partners) or an acceptable risk determination on a recent (last 12 months) Focused Assessment report, CBP requires would be members to: (i) complete a comprehensive questionnaire; (ii) develop and implement internal controls (including written policies and procedures) and a risk-based self-testing plan; (iii) furnish entry and trade data; and (iv) agree to the terms of a memorandum of understanding. Once accepted into the trade compliance program, members must demonstrate their commitment to compliance by successfully completing an annual notification process.
But for those importers that do satisfy the requirements CTPAT Trade Compliance Program membership, CBP promises “meaningful, measurable, and reportable” benefits, including the following:
- All the benefits of the CTPAT program
- Removal from the Focused Assessment audit pool
- Prior notification of errors for the purpose of making preemptive prior disclosures
- Expedited rulings and internal requests before the National Commodities Division
- Enhanced Importer Trade Activity (ITRAC) data access
- Access to a National Account Manager (NAM)
- Trusted Trader status
Achieving import security and compliance is a difficult and complex task. The large number of not-always-obvious requirements and considerations can – oftentimes despite an importer’s best intentions – derail, delay, or disrupt supply chains and business operations.
Nonetheless, in a trade environment characterized by the absence of fool-proof entry examination and audit avoidance strategies, combining CTPAT and CTPAT Trade Compliance Program memberships to become, in the eyes of CBP, a low risk “Trusted Trader” represents the safest harbor currently available to importers seeking greater control, certainty, and efficiency in their import operations.