Trusted Traders Affected by Enforcement Emphasis

The Obama administration has made no secret that the first order of business in its trade agenda is to tighten enforcement of existing rules and regulations. While much of the focus thus far has been on ensuring America’s trading partners live up to obligations prescribed in their trade agreements, it has become clear that the commitment to enforcement extends to companies involved in international supply chains as well.

The U.S. Customs and Border Protection agency has engaged in an unprecedented effort over the past eight years to improve the security of international imports. One of its original initiatives in this area was implementing the Customs-Trade Partnership Against Terrorism, a program intended to expedite border processing and other benefits for traders who took specified steps to prevent the illicit use of their supply chains.

Recently, however, CBP has made several large narcotics seizures along the U.S.-Mexico border involving commercial shipments linked to C-TPAT members, including both dry goods and fresh produce. CBP has identified two primary factors that have enabled these supply chain security breaches: failing to follow established security procedures (for example, utilizing the services of non-C-TPAT service providers) and lack of corporate oversight that allowed subversion through internal conspiracies.

As a result, CBP has outlined measures designed to encourage all C-TPAT members--not just those that do business along the southwest border--to increase vigilance over their supply chains. In today’s economic and enforcement environment, even companies not participating in C-TPAT may want to consider implementing the following practices as well.

• Ensure adequate oversight and accountability of the cargo loading and sealing process.
  
• Use cameras and/or other suitable monitoring devices or processes at cargo loading areas.
  
• Ensure all conveyance hardware and fastening devices are inspected for overall security and deterrence of unauthorized access; where deficiencies are present, take steps to mitigate the risk.
  
• Consider the use of more stringent security devices to secure trailer doors.
  
• Conduct an audit and verification of employee screening processes, and include periodic reviews.
  
• Consider rotating personnel assigned to operationally sensitive positions, such as dispatcher.
  
• Review established processes for oversight of the transportation component and assess areas of potential weaknesses and vulnerability, with specific attention on addressing potential delays and opportunities for a security breach.
  
• Work with service providers to develop written and verifiable procedures to track conveyances from point of origin to final destination.
  
• Establish route times from the manufacturing site to various points in the transportation flow. Develop written and verifiable procedures to address instances in which a driver does not check in within established time parameters, and prohibit unauthorized stops.

Global Business expert Tom Travis is a managing partner of Sandler, Travis & Rosenberg, P.A., a leading international trade and customs law firm. He also serves as the chairman of Sandler & Travis Trade Advisory Services. He is also the author of the Amazon.com bestseller Doing Business Anywhere: The Essential Guide to Going Global.