Issue 352, June 19, 2002
Issue 332 of The Danzas AEI Resource (February 27, 2002) outlined the Customs-Trade Partnership Against Terrorism (C-TPAT) and its potential benefits. Since then, importers that had been found to be "low risk" after a compliance review were invited to participate. Finally, on April 17th, U.S. Customs invited all importers to participate in the program, though non-participation may not be an option for many companies. For example, on May 1st, Customs invited participation in the first phase of the new ACE (Automated Commercial Environment) Account Portal. However, that participation is limited to 40 companies, who are ALSO C-TPAT participants. Thus, C-TPAT is becoming a doorway to participation in important and beneficial Customs programs.

The details of the participation in and requirements of the C-TPAT program are available on U.S. Customs' website at http://www.customs.gov/news/news.htm (and type "C-TPAT" in their search engine). For companies that have not been designated "low risk," participation will require a trade compliance review in addition to the Memorandum of Understanding and the detailed security questionnaire. Under this portion of the program, Customs will review written internal controls, and will confirm that the importer has procedures to ensure that entry information is accurate and complete. Such procedures will necessarily involve programs to confirm tariff classification, to verify country of origin, and to ensure that all elements of dutiable value are properly reported. As to the cargo security requirements, in addition to the questionnaire, the importer must formulate and implement detailed security procedures. To date, little concrete direction has been given by Customs concerning these security procedures and the suggested "best practices" in this area.

In general, companies that participate can expect expedited processing (reduced border times) resulting from priority service, reduced inspections, and dedicated commercial lanes (where infrastructure permits). These will particularly benefit companies that rely on "just-in-time" inventory. Customs is also promising admission to the NCAP program which will provide importers with Customs' electronic data about its own entries. This program is the forerunner to program that will enable importers to lodge electronic invoices with Customs and to file entries in a truly paperless environment. As the rollout of ACE begins, it also appears that taking advantage of the systems benefits will also require the importers' commitment to C-TPAT.

Our contributing writer, David M. Murphy, is a licensed Customs broker and a Partner at the Customs and international trade law firm of Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP in New York City, and can be reached via email at dmurphy@gdlsk.com or at 212-557-4000.

Please note that due to the complex nature of the subject matter, DHL Danzas Air & Ocean cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with DHL Danzas Air & Ocean.