C-TPAT Exporters Now Benefit From Customs Facilitation

As part of the President’s National Export Initiative, U.S. exporters can now apply to participate in the Customs-Trade Partnership Against Terrorism (C-TPAT) program of U.S. Customs & Border Protection (CBP). C-TPAT is a public-private partnership that aims to protect global supply chains from terrorism. Until now, C-TPAT limited participation to importers, who agree to work with CBP to implement security measures in exchange for program benefits. 

Now exporters can apply to C-TPAT in exchange for program benefits that may expedite the flow of their goods out of the United States.

C-TPAT Benefits for Importers

When C-TPAT launched in November 2001, seven importers participated in the program. Today, it has more than 10,000 members. Companies apply to C-TPAT by conducting a security risk assessment and completing a supply chain security profile. C-TPAT then assigns a Supply Chain Security Specialist to review the application and provide guidance.

Once accepted into C-TPAT, companies receive a number of benefits in exchange for meeting criteria in the security profile, including:

  • Fewer inspections because C-TPAT members are considered low-risk
  • Shorter wait times at the border due to front-of-the-line inspections, decreased time to release cargo by CBP, and access to Free and Secure Trade (FAST) Lanes
  • Benefits from Mutual Recognition Arrangements with U.S. trading partners—including Canada, Japan, Korea, and the European Union, with negotiations for mutual recognition with China, Singapore, Mexico, and others—such as increased facilitation due to common security standards
  • Communication and coordination during shipping disruptions
  • Access to contracts and eligibility for other U.S. government pilot programs requiring C-TPAT membership, such as the Food and Drug Administration Secure Supply Chain program.

A 2010 survey of C-TPAT participants found that benefits outweighed or equaled costs affiliated with the program.

Benefits for Exporters

C-TPAT not only protects good coming into the United States, it presents benefits for companies shipping goods out of the United States. As of early July 2015, there are 547 C-TPAT importers whose export operations are eligible for C-TPAT. Several companies that do not import but only export have applied, and CBP is currently receiving C-TPAT for exporters applications.
Exporters who meet C-TPAT’s eligibility requirements—including maintaining a documented export security program, committing to C-TPAT supply chain security criteria, and completing a supply chain security profile—have access to a number of benefits:

  • Shorter wait times from prioritized processing of exports and examination over non-C-TPAT shipments
  • Streamlined processes to vet outbound supply chains, which may save time, money, and transportation efforts abroad
  • Communication and coordination during shipping disruptions
  • Access to an individually assigned Supply Chain Security Specialist
  • Increased facilitation in trading partner countries with Mutual Recognition Agreements.

CBP has numerous Mutual Recognition Arrangements with other countries. The goal of aligning partnership programs is to create a system whereby all participants in an international trade transaction are approved by the various countries’ customs agencies for the secure handling of goods and relevant information.

CTPAT has Mutual Recognition Arrangements with New Zealand South Korea, Japan, Jordan, Canada, the European Union, Taiwan, Israel, Mexico, and Singapore.

C-TPAT-certified exporters should receive increased Customs facilitation when importing goods into these countries.

Exporter Entity Eligibility Requirements
For C-TPAT purposes, an exporter is defined as: “a person or company who, as the principal party in interest in the export transaction, has the power and responsibility for determining and controlling the sending of the items out of the United States.”
Entities that wish to participate in the C-TPAT Exporter program must meet the program’s definition of an Exporter and the following eligibility requirements:

  1. Be an active U.S. Exporter out of the United States.
  2. Have a business office staffed in the U.S.
  3. Be an active U.S. Exporter with a documentable
         a. Employee Identification Number (EIN), or
         b. Dun & Bradstreet (DUNS) number,
  4. Have a documented export security program and a designated officer or manager who will act as the C-TPAT program main point of contact.
  5. Commit to maintaining the C-TPAT supply chain security criteria as outlined in the C- TPAT Exporter agreement.
  6. Create and provide CBP with a C-TPAT supply chain security profile which identifies how the Exporter will meet, maintain, and enhance internal policy to meet the C-TPAT Exporter security criteria.
  7. Have an acceptable level of compliance for export reporting for the latest 12-month period and be in good standing with U.S. Regulatory Bodies such as Department of Commerce, Department of State, Department of Treasury, Nuclear Regulatory Commission, Drug Enforcement Administration, and Department of Defense.

All exporters, regardless of C-TPAT certification, must also comply fully with all applicable licensing requirements and restrictions under U.S. export control regulations, including, but not limited to, the Commerce Department’s Export Administration Regulations, the State Department’s International Traffic in Arms Regulations, and the Census Bureau’s Foreign Trade Regulations, including accurate and timely filing of electronic export information (EEI).

Exporters with questions about C-TPAT applications, requirements, or benefits should contact Hogan Lovells.