If there’s a terrorist cell in America plotting to export weapons of mass destruction, it hasn’t been discovered yet. That’s crazy talk, maybe. But if terrorists sneaked a bomb into a container here, chances are it wouldn’t be detected until the box got to its destination.
Preventing such a scenario on the import side has been the foundation of Customs and Border Protection’s supply chain security strategy for more than a decade. Customs requires critical data about foreign suppliers for security screening. But with a few exceptions, U.S. exporters don’t supply the same data to foreign governments.
Now Customs and its Advisory Committee on Commercial Operations are taking the first steps to formally secure the outbound supply chain. The objective is a mirror of the Customs-Trade Partnership Against Terrorism, but for exporters. Since 2002, importers, customs brokers and carriers have made efforts to secure their import supply chains. Now, the same best practices may apply to the outbound supply chain.
Sean Doherty, acting C-TPAT director, recently told COAC the agency plans to launch a pilot export security program with Japan, Colombia and Costa Rica in the near future. COAC recommended extending C-TPAT to exporters, and providing C-TPAT truckers with benefits as a recognition of their investment in security. Only importers currently receive benefits, mainly a lower risk score in Customs’ Automated Targeting system, which means an importer’s goods are stopped less frequently for inspection.
Just what the benefit for truckers would be is something Customs will have to figure out, but Michael Ford, vice president for regulatory compliance at BDP International in Philadelphia, said recognizing truckers is only the first step in a significant expansion of supply chain security.
“This is bigger than just the land border. You need to expand beyond that, and when you do, there’s a whole new set of players,” Ford said. “If we’re going to bring in exports, it all opens up.” Companies that touch the freight between the exporter’s dock and the harbor pier include forwarders, transportation companies, warehouses and more.
Customs’ jurisdiction stops at the border, one reason it may have limited C-TPAT to import cargo. Security of the U.S. supply chain is the responsibility of the Transportation Security Administration, the FBI and local law enforcement, but the TSA’s air cargo security program could be a model for an export C-TPAT program.
“I move air freight. I have known and unknown shippers,” Ford said. “If I’m directing a pickup, I’ve got to know who the trucker is, who the driver is, and the company’s security threat assessment number. I’ve got to have all those records on file. If you’re in the air freight world, you have to meet TSA’s requirements, and that you understand the security of the supply chain.
“If we’re doing that for air export, it’s an opportunity for Customs and TSA to come together,” he said. Ford is a COAC member and was part of the committee that drafted the C-TPAT recommendations.
Developing an export C-TPAT program could be an incentive for Customs to step up its game in mutual recognition. C-TPAT members in the U.S. are “authorized economic operators” in programs in other countries. The AEO model is part of the World Customs Organization’s SAFE framework for security and trade facilitation. There are now 31 WCO members that have AEO programs in various stages of development. Japan and Costa Rica have AEO programs, and agreed to pilot-test export C-TPAT with the U.S.
But the AEO and C-TPAT programs are not identical. An AEO program usually includes exporters and importers. Some include trade compliance with security. Some countries add financial responsibility to the mix. Governments want to make sure AEO companies have the financial wherewithal to implement their security programs.
Mutual recognition means a trading partner’s security program is compatible with U.S. requirements. It means cargo may only have to be security-screened once to meet both countries’ requirements. The goal is to have a mutual recognition network that ultimately will expedite the movement of goods, but the net is spreading slowly. The U.S. has negotiated mutual recognition agreements with five countries since 2007. The WCO reports 15 completed agreements worldwide, and 10 more in negotiation as of June 2011.
“The AEO is an import-export program. Ours is import,” Ford said. An export component to C-TPAT would be an asset when Customs negotiates with other trading partners. “We can talk much better to them when we can say our program is now handling all the transactions,” he said.
Ford calls C-TPAT a mature program, and said it’s time to modernize. “Maybe now’s the right time to bring it up to where it needs to be. C-TPAT was built for a specific reason — to protect the homeland of the U.S. I always knew there was a gap on the other side. We can’t send stuff out of our country and not worry about where it ends up.”