1. Customs-Trade Partnership Against Terrorism Working with Business and the Trade Community

2. Presenter’s Name June 17, 2003 Established: 2001Initial Partners: 7 major importers Objective: In direct response to the events of September 11, 2001, C-TPAT builds upon relationships with all segments of the supply chain, both foreign and domestic, to secure the global supply chain and protect legitimate trade against smugglers and terrorists. Goal 1: Enhance National Security at the U.S. Border and beyond. Goal 2: Work cooperatively to secure the supply chain against implements of terror. Trade Partners agree to enhance their security: To meet minimum security criteria established by CBP. Update security criteria annually (or when a change occurs) and perform a yearly self-assessment. Submit to a C-TPAT validation every 4 years. U.S. CBP agrees to: Conduct vetting and validations to “trust but verify” the security profile. Provide reduced targeting score for active participants. Facilitate Front-of-the-line privileges. Dedicate staff to help partners through the process.

3. Presenter’s Name June 17, 2003 Partnership - cooperatively developed minimum security criteria vs. mandatory requirements Advisory Committee on Commercial Operations to CBP (COAC) Group comprised of the trade community, mostly C-TPAT member Provides input and suggestions to C-TPAT Voluntary – companies are not required to adhere to C-TPAT guidelines, but must do so to receive benefits Provides for the customized application of criteria by members Small/Medium/Large sized companies – flexibility in security criteria Provides tangible benefits Trust but verify information The C-TPAT Approach 3

4. Presenter’s Name June 17, 2003 4 C-TPAT Achievements 10,819 - Certified Partners 161 - Staffing Level 341 - Tier 3 Importers 27,312 - Total Validations Completed 12,949 - Initial Validations Completed 14,363 - Revalidations Completed Number of completed validations by year: 2014: 573 Initial Validations + 1,975 Revalidations = 2,548 Total Validations 2015: 101 Initial Validations + 305 Revalidations = 406 Total Validations 2,045 - Total Suspensions 1,444 - Total Removals Program Initiatives : 10 - Mutual Recognition Arrangements: New Zealand, Canada, Jordan, Japan, Korea, European Union, Taiwan, Israel, Mexico, Singapore 2 - Mutual Recognition Projects: China, Dominican Republic 12 - Technical Assistance Projects: India, Turkey, Jamaica, Switzerland, Honduras, Panama, Colombia, Chile, Peru, Uruguay, Brazil, Costa Rica 4 - Partner Government Agencies: FDA, TSA, USDA, Coast Guard May 1, 2015 Validations Completed by Year

5. Presenter’s Name June 17, 2003 Emphasize prevention vs. interdiction Promote shared responsibility Promote security awareness Increase supply chain security and supply chain efficiency C-TPAT Objectives 5

6. Presenter’s Name June 17, 2003 U.S. Congress’s Security and Accountability For Every (SAFE) Port Act of 2006 put into law a number of programs to improve security of U.S. ports. C-TPAT Requirements: 1. All Applicants must reviewed, certified and vetted within 90 days 2. Once certified, company’s validation must be completed within one year 3. Revalidations will be conducted every four years 4. Validation reports completed, approved, and sent to partner within 60 days of …..validation SAFE Port Act Requirements 6

7. Presenter’s Name June 17, 2003 Minimum Security Criteria Importer Business Partner Requirements Container Security & Inspection (Seals) Physical Access Controls Personnel Security Procedural Security Physical Security Security Training & Threat Awareness Information Technology Security 7

8. Presenter’s Name June 17, 2003 The validation process involves creating a “Validation Team,” that performs a joint review of the supply chain based on the security profile submitted and a documented risk assessment Each validation is customized according to the Partner An open forum to discuss issues, share ideas, address vulnerabilities and develop solutions Understand the role of CBP and the trade community in the war on terror Trust but verify system (Reliable, Accurate, and Effective) What is a Validation? 8

9. Presenter’s Name June 17, 2003 C-TPAT - Travels the World to Secure Supply Chains: Visited supply chains in 109 countries

10. Presenter’s Name June 17, 2003 What’s in it for Industry Increased efficiency / predictability Expedited shipping of cargo Protection of revenue Increased security in all parts of supply chain (leading to reduced pilferage, etc.) Safeguarding of brand Better understanding of own supply chain (leading to efficiencies) Potential access to industry best practices Preferential treatment from Customs (help with contingency)

11. Presenter’s Name June 17, 2003 Reduced inspections (targeting score reduction) Front of the line treatment for exams Assigned CBP Supply Chain Security Specialist (SCSS) Participation in CBP training seminars Access to Verification Interface for other C-TPAT members Eligibility for other CBP Programs (FAST, ISA) Benefits and Incentives (cont.)

12. Presenter’s Name June 17, 2003 12 Exam rates/Benefit rates Entries filed by Tier III partners are 9 times less likely to undergo a security based examination than those entries filed by non C-TPAT partners. Entries filed by Tier II partners are 3.5 times less likely to undergo a security exam than those entries filed by non CTPAT partners. If you flip this around, it means non C-TPAT entries are up to 9 times more likely to face a security exam.

14. Presenter’s Name June 17, 2003 Mutual Recognition MR means that the security requirements/standards of the industry partnership program, as well as its verification procedures, are the same or compatible with those of the potential MR partner MR is a long term goal Customs, AEO Programs & Trade Community must realize the time, effort and resources that goes into achieving MR.

15. Presenter’s Name June 17, 2003 MRA Global Snapshot (23 MRAs) 2007=1 2008=3 2009=3 2010=6 2011=4 2012=2 12 MRAs in negotiations 2013=2 2014=2

16. Presenter’s Name June 17, 2003 MRA: Benefits (Government) Resources (time and money) would be better allocated. Lower probability of on-site visits for MR Partner Validation and revalidation process will be quicker and smoother. Will lead to the establishment of true end-to- end global security.

17. Presenter’s Name June 17, 2003 MRA: Benefits (Trade) Companies will go through fewer validations “audit fatigue” Validation and revalidation process will be quicker When applicable, companies will receive similar treatment from countries where MR has been achieved

18. Presenter’s Name June 17, 2003 MRA Challenges Entity Identifiers- there are many Language differences Cultural differences Resources vary (Need compatible IT Systems that share status) Timelines Disparity in benefits (vary from country to country) Regulations block sharing of information

19. Questions? Steve Krupinsky Chief C-TPAT- International Branch Washington D.C. 202 344 1180 STEVEN.P.KRUPINSKY@cbp.dhs.gov