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By April Collier, May 09, 2013

The World Customs Organization (WCO) has stated that the “global trading system is vulnerable to terrorist exploitation that would severely damage the entire global economy. As government organizations that control and administer the international movement of goods, Customs administrations are in a unique position to provide increased security to the global supply.” The recent attempt by terrorists to send explosives via commercial shipment from Yemen to the United States illustrates that terrorists will attempt to exploit the trade chain.

Both the Canada Border Services Agency (CBSA) and the United States Customs and Border Protection (CBP) play very active roles in the efforts to combat terrorism.  CBSA’s Partners in Protection (PIP), and CBP’s Customs – Trade Partnership Against Terrorism programs are voluntary government – business supply chain security programs that ask businesses to ensure the integrity of their security practices and communicate and verify the security practices of their business partners.

Some of the current tangible benefits that are realized by C-TPAT and/or PIP members include:

• Reduced number of cargo inspections
• Emphasis on self-policing as opposed to Customs verification
• Eligibility to apply to the FAST program

These benefits translate into some valuable practical considerations, including:

• Cost savings – a full Customs exam can cost upward of $500 – $1000 per container
• The more parties involved in a transaction who are C-TPAT partners, the lower the likelihood of cargo inspections.
• C-TPAT membership is considered a mitigating factor in the case of potential penalty matters
• Ongoing familiarity with the program decreases the necessary time spent and resources involved in assuring compliance.

As the program evolves, it is expected that the benefits will continue to outweigh the costs or perceived disadvantages to becoming a participant in the program.  While there are no commitments from Customs, the trade has requested that Customs consider a number of added benefits for the “next generation” of C-TPAT.

Some of the next generation benefits of C-TPAT could include:

• Basing cargo release on 10+2 data and permitting monthly entry of cargo aligned with the periodic monthly statement (in the case of U.S. imports)
• Expedited responses to ruling requests
• Enhanced penalty mitigation
• Prior disclosure benefits
• Further lowering of the number of inspections
• Tax incentives for supply chain security and safety enhancements
• Mutual recognition with other countries” approved security programs

Both the C-TPAT and PIP programs are still  fairly young programs and continue to evolve.  The Customs agencies continue to work on developing  a number of current and future benefits for companies who are participants.  That being said, the challenges that come along with developing your procedures and policies will be quite unique to your company, as will the actual benefits of participation.