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    CTPAT | What Is It And Why Is It Important To International Trade

    CTPAT | What Is It And Why Is It Important To International Trade

    1. What does CTPAT Stand for?

    2. What are the benefits of CTPAT?

    3. How do organizations become CTPAT-certified?

    What does CTPAT Stand for?

    Customs-Trade Partnership against Terrorism (CTPAT) is a program that was formed in the aftermath of 9/11 to protect and strengthen foreign trade and US border security. All the CTPAT-certified organizations must adhere to fulfill the specific security requirements of the program. These requirements apply to the various parties in the gamut of the trade community, including the manufacturing and distribution facilities, third-party logistics providers (3PLs), and carrier partners.

    Why is CTPAT Important to International Trade?

    The CTPAT is vital to international trade as it helps strengthen border security and protect the global supply chain by preventing any terrorism threat. The CTPAT, a voluntary public-private sector partnership program, is a minuscule part of the US Customs Border Protection (CBP), both aiming to make border security more stringent and facilitate the free flow of global trade.

    Reduced number of CBP examinations, shorter waiting time at the border, etc., are some benefits that the CTPAT partners enjoy from being part of the initiative.

    Why was CTPAT Created?

    The CTPAT was launched after the 9/11 US terrorist attacks in 2001. Besides merely securing all the goods imported into the US, the focus is to enhance the business community’s involvement in the country’s fight against terrorism.

    Through the CTPAT, the CBP partners with businesses to identify any lapses in the security system, safeguard the supply chain, and execute specific safety measures/ industry best practices.

    How does CTPAT Work?

    The CTPAT-compliant companies have to address a wide range of security issues. They must present security profiles that identify the actions they intend to implement for aligning security throughout the supply chain. The organizations must chart an agreement to work with the CBP to protect the supply chain, identify security gaps, and implement specific security measures/best practices.

    What are the benefits of CTPAT?

    The CTPAT compliant organizations and partners enjoy plenty of advantages. These include playing an active role in collaborating with the US government in its fight against terrorism. By doing this, companies will be better able to identify the various security vulnerabilities and accordingly take corrective actions to mitigate risks.

    The key benefits of the CTPAT are as under:-

    • A reduction in the number of CBP examinations
    • Front of the line inspections
    • The chance of getting exemption from stratified exams
    • Shorter wait times to get goods cleared at the border
    • Availability of a supply chain security specialist
    • Access to Free and Secure Trade (FAST) lanes at the land borders
    • Access to the CTPAT web-based portal system
    • Access to a library of training materials
    • The possibility of being a trusted trade partner by foreign customs administrations that have signed mutual recognition with the US
    • The chance of being eligible for other popular US government pilot programs, such as the Food and Drug Administration’s Secure Supply Chain program
    • Can enjoy priority business resumption in the event of a natural disaster or terrorist attack
    • Can become eligible to participate in the Importer Self-Assessment Program (ISA)
    • Get priority consideration at CBP’s industry-focused Centers of Excellence and Expertise

    Who is Eligible for CTPAT Certification?

    There are 12 different types of business entities that are eligible for the CTPAT membership. These include importers, exporters, carriers, 3PLs, consolidators, and customs brokers.

    Mentioned below are the eligibility criteria for the importers. To obtain the CTPAT membership, they must:-

    • Be an active US importer or non-resident Canadian importer who has imported goods into the US within the past 12 months
    • Have an active US Importer of Record (IOR) number
    • Have a valid continuous import bond registered with the CBP
    • Have an operational business office in the US or Canada
    • Designate a primary cargo security officer who will ensure compliance with the various aspects of the CTPAT
    • Commit to maintaining the CTPAT supply chain security criteria as stated in the CTPAT Importer Agreement
    • Complete the supply chain security profile in the CTPAT portal. This involves identifying its development, maintenance, and enhancement of the internal policy to comply with the CTPAT importer security criteria
    • Owes no unpaid debt to the CBP at the time of the application for which a final judgment or administrative disposition has been rendered

    What are CTPAT Requirements?

    In May 2019, the CBP updated the Minimum Security Criteria (MSC) with new and strengthened criteria to address the existing global supply chain environment's needs and threats. The CBP has categorized the new standards for the importers into three main components:-

    • Corporate security
    • People and physical security
    • Transportation security

    There are 12 criteria categories that are applied across the supply chain within these focus areas. These include many new requirements and recommendations for the following areas:-

    • Cybersecurity
    • The protection against agricultural contaminants and pests
    • The prevention of money laundering and terrorism financing
    • The expansion of security technology to strengthen existing physical security requirements

    The CBP also strengthened other requirements, including those related to business partner security and the security of cargo containers.

    How do organizations become CTPAT-certified?

    The following three steps are involved in the CTPAT certification procedure:-

    1. The company interested in being CTPAT verified must perform a comprehensive risk assessment and document their findings.
    2. Then, they must submit an application through the CTPAT online portal.
    3. At last, they must fill a supply chain security profile describing how the company is adhering to the CTPAT minimum security criteria.

    Upon the completion of these steps, the CBP will conduct a review.

    How long does it take to become CTPAT-certified?

    The application process for the CTPAT program is done online. After the presentation of the completed application, a detailed evaluation of the company’s profile is carried out within 30-60 days. The CBP can either accept the company into the program or reject its application within 90 days of applying.

    What are the barriers to CTPAT Certification?

    Some companies for whom the time and efforts to meet all the CTPAT certification requirements may not be worth it as these organizations have few current border inspections.

    Also, smaller shippers who ship Less than Truckload (LTL) and Less than Container Load (LCL) cannot benefit from the expedited processing. This applies only to loads that are 100% CTPAT cargo.
    Even companies under regulation from more than one government agency, for instance, the US Food and Drug Administration (FDA) or the United States Department of Agriculture (USDA), will also not benefit from the CTPAT certification.

    What does it mean to be CTPAT-certified?

    If your organization is CTPAT Certified, it implies that your company has completed the application procedure. It also proves that your business has undergone a comprehensive assessment by the CBP, who has then verified that your business has adhered to and met the CTPAT security criteria.

    What is a CTPAT Compliance Audit?

    The CTPAT is a joint initiative by the US government and the business community to build cooperative relationships to strengthen the global supply chain and border security. This is achieved by improving security for transporting people, conveyances, and cargo at every stage of the commercial shipping process.

    The audit involves checking the following:-

    • Vital items
    • Container security
    • Physical security
    • Information technology
    • Conveyance security
    • Physical access controls
    • Procedural security
    • Security training and threat awareness

    Compliance with the above ensures that all merchandise shipments going to the US are being handled in accordance with CTPAT requirements.

    What is a CTPAT Validation?

    The security profiles of all the CTPAT participants must be validated to ensure accuracy. Validations can be initiated on several risk factors such as:-

    • Security-related anomalies
    • The strategic threat posed by geographic regions
    • Other risks-related information
    • Strategic import volume

    The CBP does not conduct unannounced validations. The CTPAT participants are given approximately 30 days advance written notice. They are also provided a list of supporting documents that they must keep ready for the validation process.

    Is a CTPAT validation the same as a CBP audit?

    No, a CTPAT validation is not the same thing as a CBP audit. The CTPAT validation certifies that an organization has met the voluntary and exemplary standards set by the CTPAT beyond compliance. A CBP audit, on the other hand, involves mandatory regulatory compliance. It includes aspects such as the North American Free Trade Agreement (NAFTA) assessments and trade compliance.

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    Alexandra Ortiz
    Alexandra Ortiz
    Content and PR at Drip Capital
    8 min read