Growing Global

Benefits for C-TPAT for U.S. Pet Product Companies

By Joseph Grignoli
American River International

The horrific events of 9/11 have changed how we all think about security. For starters, our government was prompted to review its various import/export and regulatory agencies and business processes. Soon after 9/11, the decision was made to combine various agencies thus creating the Department of Homeland Security (DHS). The DHS assumed direct responsibility over the Bureau of Customs and Border Protection (CBP), the Bureau of Industry and Security (BIS), and the Transportation Security Administration (TSA). Their new collective mantra was to scrutinize the global supply chain process and the movement of trade and commerce into and out of the United States.

One of DHS' most important new initiatives was the creation of the Customs - Trade Partnership Against Terrorism (C-TPAT), which was formally launched on April 16, 2002. This voluntary program is a joint effort by Customs and the Trade Community to raise the level of security associated with all aspects of imports and exports.

As a result of all this increased scrutiny, it became very evident that the security of the supply chain needed to be prioritized and, more importantly, tightened up. Correspondingly, we saw the creation of a host of new regulations and initiatives. In addition to the C-TPAT program, several other new programs have also been recently implemented such as, the Patriot Act, Export Administration Act (EAA), Container Security Initiative (CSI), 24 – Hour Manifest Rule, Focused Assessment and Free and Secure Trade (FAST).

For pet product companies who import goods into the United States, the level of security detail has gone up exponentially. Through the 24 hour Manifest Rule, importing companies are now required to verify the security of the containers holding their goods prior to being loaded onto a steamship. The same rule applies to airplane transport as well, although under different time constraints.

In cooperation with the governments of many foreign countries, CBP has placed employees in numerous international ports of departure for the sole purpose of reviewing the manifest documentation prior to loading onto a vessel. Under the Container Security Initiative (CSI), these empowered officials may also selectively examine containers using Non-Intrusive Inspection, (NII), or x-ray technology.

The same can be said for pet product companies who export goods as well. In addition to those programs listed above, the Bureau of Industry and Security (BIS), part of the Department of Commerce, has increased their review of export transactions and the country of their final destination. Companies who directly benefit from the sale of their goods are characterized as being the U.S. Principal Party of Interest, or USPPI. While they reap the financial rewards from these sales, the USPPI can also be held ultimately culpable and be heavily fined, (or worse), should their goods wind up in the wrong hands, and/or their export documentation be done incorrectly, incompletely or lacking due diligence and reasonable care.

Whether importing or exporting products, non-compliance with these various programs can lead pet product companies to experience delays which can lead to product spoilage and the loss of customers and revenue. In a worst case scenario, non-compliance can also lead to revocation of import/export privileges.

Those of us engaged in supply chain activities have choices, from both an individual and a corporate perspective. We can be "reactive" to the regulatory climate and take action after an incident occurs or we can take a more "proactive" stance. By tailoring compliance programs to respond not only to explicit security considerations but also to improve the performance of supply chain processes as well, we will better control the destiny and security of our imports and exports.

Experts on terrorism agree that another attack within the U.S. is simply a matter of time, with most pointing to containerized cargo as a likely delivery system. While one can only speculate on what the economic reaction might be toward the company whose container was the one compromised, the risk alone is often cited as one of the biggest reasons companies choose to participate in C-TPAT.

Today there are over 7,000 companies that are certified and another 4,000 companies validated in the C-TPAT program.

C-TPAT benefits include:
Reduced examinations, both security driven and random.
Immediate mitigations to fines and penalties.
Move to front of line should examination be required.
Privileges to avoid CBP audits by qualifying for Importers Self - Assessment Program (ISA).
Access to FAST lanes at North and South U.S. borders.
A more efficient supply chain process with newly implemented security enhancements.
Priority drawback benefits.
Priority release status in the post - reaction to the next terrorist attack.
Business partners' recognition of secure global supply chain process by being a participant in this global security initiative.
When multiple containers are listed on a single Customs entry, only the targeted container is held in the Customs Examination Station (CES). The other containers are released to the importer's facility.

As pet product companies expand, sell their products in foreign markets and find new overseas suppliers, awareness of global supply chain compliance issues becomes an increasingly important and integral component of the business process.

Is your company one of the 11,000 reaping the benefits of the C-TPAT program? If not, now is the time to join. Do you choose to run your company by "good luck" or run it by better management.

Contact the Author:

Joe Grignoli: 1-800-524-2493
jgrignoli@americanriverintl.com

Joe is part of the sales and consulting team at ARI, who are engaged with APPMA to assist the membership with their global supply chains and more specifically with their C-TPAT initiatives. Joe and ARI can be of great value to any pet product company in the managing of their import and export programs.