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Edward X. DeSousa,
Global Drawback, Inc.
Every few years a new Customs program comes out that has a significant impact on the way companies operate. Last year, Customs introduced the Customs Trade Partnership Against Terrorism (C-TPAT). Although not found or published in the Customs Regulations, C-TPAT is administered by the U.S. Customs Service (under Homeland Security, the new name is "Bureau of Customs and Border Protection").
C-TPAT is a security program, geared towards protecting our homeland. Since its proposal in the beginning of 2002, C-TPAT struck the curiosity of U.S. importers, but most did not know what it entailed.
The basic requirements are simple. Companies must have total knowledge of their supply chains and employ security measures to safeguard their imports. This means knowing who your vendors are, and insuring they have procedures in place to prevent illegal or terrorist merchandise from contaminating their supply chain and entering the United States.
Customs asked for importing companies (mostly the top 500 importers) to participate. In August 2002, C-TPAT was also extended to forwarders, brokers and carriers. There has been hesitancy by some in the industry to participate - driven by concerns over Longevity, Benefits and Cost:
- Longevity - Now that US Customs is a department under Homeland Security, C-TPAT is probably here to stay.
- Benefits - The benefits are supposed to be faster import clearances and less government oversight.
- Cost - The cost of the C-TPAT program depends on the size of your company and the company you may hire to assist you. In addition to information and training seminar costs, some companies are charging $10,000 to $60,000, just for obtaining certification; other costs include implementation and administration. Several initial participants have spent over $100,000 just to qualify. These fees may be expensive, but consider the cost of delays in obtaining your merchandise.
As a contradiction, many companies do not believe that C-TPAT will prevent a terrorist attack, and this is just another government bureaucratic burden. It is impractical to expect that money won't influence a C-TPAT supplier's employee (located in a country with an abundance of anti-U.S. terrorists) from contaminating an export shipment consigned to the U.S. However, companies are participating because they believe that if the U.S. falls prone to another terrorist attack, especially from cargo, all cargo will stop. The companies that are registered C-TPAT members will be the only, or the first, importers to have their merchandise cleared.
Although this is still a voluntary program, Customs is slowly "forcing" participation. Customs has been issuing CF-28's to companies who have not applied for participation. A CF-28 is a Customs Form called Request For Information (19 CFR 151.11 and 152.2). It is used by Customs to get more information (such as costs, assists, etc.) from an importer of record on the specific import entry. Most importers should know what it is and/or have received it at one time or other. If your company is receiving such CF-28's, we strongly suggest you start getting on board. Whether C-TPAT will prevent an attack on the U.S. remains to be seen, but as with other Customs programs, participate or go to the bottom of the pile.
Edward X. DeSousa is President of Global Drawback, Inc. located near Boston, MA.
Global Drawback is a C-TPAT certified Customs Broker specializing in Customs compliance and duty drawback. For more information regarding C-TPAT certification and receiving assistance in becoming certified, contact Ed at ed@drawback.com or phone him at 978.276.1999.
U.S. Customs offers additional information at the following links:
> C-TPAT Fact Sheet and Frequently Asked Questions
> C-TPAT for Importers
> C-TPAT for Customs Brokers
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