C-TPAT, AEO and MRA - Benefits and Drawbacks to Security Arrangements
The first major post 9-11 security program adopted by U. S. Customs
was the voluntary program known as the Customs – Trade Partnership
Against Terrorism (C-TPAT). This program was developed under then
Customs Commissioner Robert C. Bonner in part to leverage the knowledge
that importers and subsequently other supply chain providers have about
their own suppliers and operations; in part to give U. S. companies a
way to demonstrate their concern with import security issues; and in
part to demonstrate to Congress that methods other than 100% cargo
inspections could be devised to secure America’s imports. C-TPAT quickly
grew to include several thousand certified members, mostly but not
exclusively larger companies. Membership allowed these companies to
consider themselves a part of the 9-11 security response, and
demonstrate their commitment to security to Customs and other agencies.
As the program expanded to include customs brokers, carriers, and other
service providers, it became a selling tool for such companies seeking
business from C-TPAT certified importers as part of an integrated secure
supply chain.
C-TPAT also served as the template for the development by the World
Customs Organization of the SAFE Framework of Standards to Secure and
Facilitate Global Trade. A major component of the SAFE Framework is the
Authorized Economic Operator (AEO) concept, including the use of Mutual
Recognition Agreements (MRA) between countries implementing such
programs. AEO programs are required to be full-fledged operations, with
strong validation and security components
built in, to qualify for MRA
participation.
AEO programs have been adopted by dozens of countries,
some using their own program names (Partners in Protection in Canada,
the Secure Export Scheme in New Zealand, the Golden List in Jordan),
with Japan, Korea, Taiwan, Singapore, Israel, and all of the European
Union included. As of December 2014, the U. S. has entered into MRA
agreements with all of those jurisdictions, and is working toward
agreements with China and Switzerland.
In the decade plus since the institution of the C-TPAT Program,
membership grew to over 10,000 certified partners, but has stagnated at
that level over the past several years despite plans by Customs to at
least quadruple the size. (C-TPAT partners do import over 50% of the
total value of U.S. imports, while constituting less than 1% of the
total number of importers.) As the program developed and Customs gained
more experience, the minimum security criteria and the information
required from participants – particularly sometimes difficult to obtain
data regarding foreign suppliers; and the formality of presentation –
all electronic submission through a web Portal; increased. Validations
have sometimes seemed to use mandatory checklists with limited
applicability, such as questions relating to production facilities
applied to office locations, or to container operations for bulk cargo
like steel, with little opportunity to explain the differences or
non-applicability. More validations are also being conducted in
expensive, difficult locations, including those with limited volumes of
trade.
A number of companies have begun to question continued participation
as the costs and difficulty of maintaining certification increase, and
the benefits seem more distant or elusive. Although Customs statistics
show that C-TPAT participants undergo fewer cargo examinations, for many
companies the actual reduced number has not been too significant.
“Front of the line” exam processing and expedited trade processing by
Centers for Excellence and Expertise (CEEs) have (at least yet) also not
been found particularly helpful or necessary. The possibility of
expedited treatment in any trade disruption is seen as (at least so far)
an illusory benefit.
There are some meaningful benefits. For carriers, participation
allows access to the FAST lanes (highway carriers) and penalty
mitigation (maritime carriers for late ISF data). Importer participation
is required to join the Importer Self Assessment (ISA) program, and to
secure Partnership level processing from the CEEs. Importers with large
numbers of entries receive greater benefits from reduced inspections.
The inclusion of other government agencies, such as the FDA and TSA,
results in benefits to companies regulated by such agencies.
MRAs with AEO countries reduce the time and cost for C-TPAT importers
when their suppliers are part of the exporting country AEO program –
both verification and validation is done by accepting the other
country’s approvals. (This does mean that U.S. validations of foreign
suppliers will be of non-AEO companies and countries.) The addition of a
C-TPAT for exporters module means that exporters qualified and
validated by U.S. Customs can be accepted as validated suppliers in the
importing country’s AEO program without necessitating a second set of
documentation and/or verification.
It remains to be seen whether the increasing costs and complexity of
participating in C-TPAT will lead to continued lack of growth or even
reduction in numbers, or the benefits from full implementation of the
CEEs, improved administration from the consolidation of the trusted
trader programs, and expansion of the number of MRAs will trigger
greater interest in becoming a member. Customs continues to direct
significant resources to the program and push new companies to apply and
current members to maintain membership.
Mutual RecognitionofAEOs = China, Japan, Norway, Switzerland, USA
Country
|
Date Launched
|
Program Title
|
Type
|
Number
|
Argentina
|
2006
|
Customs System of Reliable Operators
(SAOC)
|
Export
|
7
|
Canada
|
1995
Revised 2002, 2008
|
Partners in Protection (PIP), Customs Self-Assessment
(CSA), Free and Secure Trade (FAST), Partners in
Compliance (PIC)
|
PIP - Import/export
CSA, FAST, PIC - Import
|
1,535
|
Colombia
|
2011
|
AEO
|
Import / Export
|
NA
|
Costa Rica
|
2001
|
PROFAC
|
Export
|
1
|
China
|
2008
|
Classified Management of Enterprises
|
Import / Export
|
2,174
|
Dominican Republic
|
2012
|
AEO
|
Import / Export
|
NA
|
EU (27 countries)
|
2008
|
AEO
|
Import / Export
|
13,885
|
Guatemala
|
2011
|
AEO
|
Import / Export
|
2
|
Hong Kong, China
|
2012
|
Hong Kong AEO
|
Import / Export
|
15
|
India
|
2012
|
AEO
|
Import / Export
|
4
|
Israel
|
2011
|
AEO
|
Import / Export
|
8
|
Japan
|
2006
|
AEO
|
Import / Export
|
518
|
Jordan
|
2005
|
Golden List
|
Import / Export
|
44
|
Kenya
|
2010
|
AEO
|
Import / Export
|
38
|
Korea
|
2009
|
AEO
|
Import / Export
|
292
|
Malaysia
|
2010
|
AEO
|
Import / Export
|
48
|
Mexico
|
2012
|
NEEC
|
Export
|
41
|
New Zealand
|
2004
|
Secure Exports Scheme
(SES)
|
Export
|
123
|
Norway
|
2009
|
AEO
|
Import / Export
|
32
|
Peru
|
2012
|
UAC-OEA
|
Export
|
NA
|
Singapore
|
2007
|
Secure Trade Partnership
(STP)
|
Import / Export
|
110
|
Switzerland
|
2011
|
AEO
|
Import / Export
|
14
|
| Taiwan |
2010 |
AEO |
Import / Export |
292 |
Thailand
|
2011
|
AEO
|
Import / Export
|
111
|
Turkey
|
2013
|
AEO
|
|
6
|
Uganda
|
2012
|
AEO
|
Import / Export
|
NA
|
USA
|
2001
|
Customs-Trade Partnership against Terrorism
(CTPAT)
|
Import
Export program in development
|
11,201
|
The following are developing or have developed AEO programmes
Country
|
Program Title
|
Type
|
Botswana
|
Trans Kalahari Accreditation Scheme
|
Import / Export
|
Chile
|
AEO Pilot
|
Export
|
Ecuador
|
AEO
|
Export
|
El Salvador
|
AEO
|
Import
|
Former Yugoslav Republic of Macedonia
|
AEO
|
Import / Export
|
Indonesia
|
AEO
|
Export
|
Morocco
|
AEO
|
Import / Export
|
Serbia
|
AEO
|
Import / Export
|
Seychelles
|
AEO
|
Import / Export
|
Tunisia
|
AEO
|
Import / Export
|
Uruguay
|
Qualified Economic Operator
|
Import / Export
|
If you need information advice and guidence concering the above please contact us on our helpline 01394 458554 or email info@felixstowe-ac.co.uk