How Foreign Supply Chain Business Partners (Suppliers/Manufacturers, Foreign Consolidators/Stuffing Facilities, Trucking Companies) Meet CTPAT Requirements
& Prepare for CTPAT Visit

On April 16, 2002 U.S. Customs and Border Protection (“CBP”) launched the Customs Trade Partnership Against Terrorism program (“CTPAT”). The validation phase has changed significantly since you were initially certified. As the CTPAT program benefits have increased, the minimum security requirements have also increased.

Today, many importers join the CTPAT program for some of the following reasons:

• Reduce the number of inspections and audits of the cargo coming into the U.S.
• A requirement by many companies that their current and future vendors join the CTPAT program if they want to continue doing business with existing customers, as well as with future customers.
• Provides up to 50% off on penalty fines associated with ISF (10+2) program.

Regardless of why a CTPAT member joins the CTPAT program, their CTPAT team starts the process by creating a supply chain flow chart which helps them identify their exposure to risk. The chain begins with the foreign shipper and ends with the importer or consignee regardless of whether they are responsible for contracting the business supply chain provider. A foreign supply chain business partner (“FSCBP”) is the shipper, trucking company that moves the cargo from the shipper to the consolidator, port or airlines, the consolidator, agent, trading company, foreign freight forwarder, steamship line, airline, rail and others.

U.S. Customs and Border Protection (CBP), through the SAFE Port Act, mandates that a CTPAT participant (Tier 1) will undergo a validation phase (Tier 2) within one year after becoming CTPAT certified by its Supply Chain Security Specialist (SCSS) and a revalidation phase within three years after the initial or prior validation.

During the validation or revalidation, the SCSS will conduct an on site visit which will take place at one or more of the following locations: company’s domestic facilities which include corporate office, warehouses (private and/or third party), deconsolidation facilities, trucking companies and distribution centers where applicable.

In addition, the SCSS will also conduct a site visit at the FSCBP (foreign suppliers, consolidators, and trucking companies) where applicable. The SCSS (who is usually accompanied by another SCSS) visit can last or possibly two days.

The FSCBP, just like the CTPAT member, must be prepared for the SCSS’s visit. The SCSS visit will include a physical inspection of the FSCBP’s facility and a review of the corresponding security processes and procedures. The FSCBP must be able to respond with written procedures which have been implemented, for every question asked during the visit. The FSCBP is not only responsible for their own operation but also for making sure that the FSCBP’s that they select, who are part of the CTPAT member’s supply chain, are also meeting CTPAT’s minimum security requirements.

Norman Jaspan Associates, Inc. (NJA) will work directly with the FSCBP or through the CTPAT participant, who is becoming validated or revalidated, by providing the following services:

1. Customize a security supply chain questionnaire which must be completed by the FSCBP.
2. Evaluate the response by the FSCBP, in order to determine if they are meeting the minimum security requirements and if the written procedures exist and are being implemented. One of the written procedures that is required by the SCSS is the Threat Awareness Program.
3. Determine if the written procedures are meeting CTPAT’s current requirements. This is in contrast to when the CTPAT member initially joined, the FSCBP initially prepared the written procedures or FSCBP was previously visited by another SCSS on behalf of another CTPAT member.
4. Determine if the written procedures need to be brought up to date. NJA will work with the FSCBP in accomplishing this. However, if the written procedure does not exist, NJA will work with the FSCBP in creating them.
5. Review the physical operation of the FSCBP by looking at diagrams, pictures and/or conduct a physical visit, in order to determine if there any deficiencies and make the appropriate recommendations.

The FSCBP also benefits from meeting the minimum security requirements as follows:

1. Maintain their business relationship with their existing U.S. customer, which in most cases they cannot afford to lose.
2. Promote their CTPAT status (meeting the minimum security requirements) to potential customers, (present and future CTPAT members) and companies that are not eligible to join the CTPAT program but recognize its significance.
3. Prepares the FSCBP for third-party audits as well as demonstrates their compliance to the CTPAT member’s customer that initiated the visit.
4. Enables the FSCBP to tell the present or potential customer that they participated in a validation for a U.S. company that is a member of the U.S. government’s CTPAT supply chain security program. During this validation, U.S. Customs personnel visited the site and evaluated/validated the company’s supply chain security procedures.
5. Receive the benefit of a consultant who reviews, analyzes and sets up and implements controls and procedures.

As previously mentioned, if the FSCBP does not demonstrate to the SCSS that they are meeting the minimum security requirements, the CTPAT member, as detailed in their validation/revalidation report, will receive a list of “Actions Required.” If the CTPAT member receives too many “Actions Required” as a result of the FSCBP, the CTPAT member can be suspended from the CTPAT program. In order to be considered for reinstatement into the CTPAT program, proof that the written procedures have been created and implemented must be submitted to the SCSS for approval. In addition, a second on-site visit to the FSCBP may be required. If the FSCBP still does not comply with CTPAT’s minimum security requirements, the CTPAT member may be forced to select another FSCBP that will be compliant.

If you (FSCBP) received a questionnaire from a customer that is in the process of becoming or is presently a CTPAT member, or preparing for any type of validation, please contact NJA so we can assist you to become CTPAT compliant.