United States: Use It or Lose It: The Mandatory Portal to Participation in the C-TPAT

The Customs-Trade Partnership Against Terrorism ("C-TPAT") is a voluntary supply chain security program that extends benefits to industry members in exchange for satisfaction of minimum security requirements. The U.S. Bureau of Customs and Border Protection ("CBP") introduced the program in the wake of the 9/11 attacks. On May 31, 2006, the program underwent its latest evolution when CBP introduced the C-TPAT Security Link Internet Portal ("the Portal"). As of May 31, it is mandatory to use the Portal to submit program applications, update security profiles, and communicate with C-TPAT officials. Of particular significance is the fact that current C-TPAT membership will be cancelled for any existing C-TPAT member who fails to enroll in the Portal by August 1, 2006. Industry members should also be aware of impending legislation that will modify the C-TPAT program.

The Portal is a secure Internet website that became operational on May 31, 2006. It aims at improving communication between industry participants and C-TPAT officials, the application and profile updating processes, and the dissemination of cargo security alerts. The Portal does not change the substantive requirements for program participation or the benefits extended to certified and validated members. It is mandatory to use the Portal to:

• Submit new applications

• Update security profiles on an annual basis

• Communicate with CBP and C-TPAT Security Supply Chain Specialists

• Receive cargo security alerts and intelligence information from CBP

• Authorize employees to access company security profiles

All company profiles maintained on the Portal are confidential within CBP and access is restricted to company-authorized users.

All participating C-TPAT importers, whether currently validated or awaiting validation, must enroll in the Portal by August 1, 2006. By this deadline, importers must have completed an update of their entire security profile by comparing their current security plans with the information on file with C-TPAT. This may include confirming with all facilities and worksites to ensure that previously documented security features – perimeter fences, use of cargo security seals, employee background checks, etc. – are ongoing. New features should also be added to the company’s security profile to be submitted via the Portal. Companies must then designate one employee or officer to enter the information in the Portal by August 1. This user can authorize additional users, whose use of the Portal will be individually tracked by CBP.

Failure to enroll by August 1 will result in cancellation of C-TPAT membership and immediate revocation of all C-TPAT benefits. Members will then have to reapply as new members and could face up to a three year delay before gaining validated status and benefits. Non-importer participants have a September 1 deadline. In addition to initial enrollment, participants will be required to update their profile on an annual basis.

CBP will provide, via email, all current participants with instructions on Portal use prior to the August 1 deadline. Detailed instructions are also available on the C-TPAT website and are accessible by potential future applicants, current participants, and certified members.

The new Portal requirement reflects CBP’s interest in making the program more manageable and efficient – which is also a strong interest of Congress and the business sector. Since its inception, C-TPAT has faced criticism from industry, lawmakers, and government watchdogs. Industry complaints focus on the perceived lack of tangible benefits in exchange for program participation. Congressional dissatisfaction flows from apparent shortcomings in the validation process, which create a security loophole through which non-validated importers receive security clearance.

Congress is considering multiple bills modifying the C-TPAT program. In May 2006, the House of Representatives voted 421-2 in favor of the Security and Accountability For Every Port Act ("SAFE Port Act"). The Senate Subcommittee on Homeland Security recently approved the Greenlane Maritime Cargo Security Act (the "Greenlane Bill"), introduced by Senators Susan Collins (ME-R) and Patty Murray (WA-D). In May 2006, Senator Ted Stevens (AK-R) introduced the Maritime, Rail and Public Transportation Security Act of 2006 in response to the Greenlane Bill’s perceived inadequacies.

The three bills are generally consistent with the C-TPAT’s current direction. From an industry perspective, one positive difference is the imposition of a one year deadline on CBP for completion of the validation process. Also of interest to importers is the proposed elimination of the Automated Targeting System ("ATS") score reduction benefit for Tier I members under the Greenlane Bill. The SAFE Port Act maintains this benefit, but imposes severe penalties on applicants who fail at the validation stage of the process.

At present it is difficult to predict the precise form that C-TPAT legislation will take. Nevertheless, two things appear certain. First, the controversy surrounding ATS score reduction benefits given to non-validated Tier I members suggests that the future of any tangible Tier I benefits is precarious. Second, in conjunction with the 2005 imposition of mandatory minimum security requirements, increased legislative oversight may signal a shift toward eventually making participation in C-TPAT compulsory. In light of these developments, importers are encouraged to make efforts to obtain validated status as quickly as possible to secure benefits under the C-TPAT program.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.