Part B—Customs–Trade Partnership Against Terrorism
§961. Establishment
(a) Establishment
The Secretary, acting through the Commissioner, is authorized to establish a voluntary government-private sector program (to be known as the "Customs–Trade Partnership Against Terrorism" or "C–TPAT") to strengthen and improve the overall security of the international supply chain and United States border security, and to facilitate the movement of secure cargo through the international supply chain, by providing benefits to participants meeting or exceeding the program requirements. Participants in C–TPAT shall include Tier 1 participants, Tier 2 participants, and Tier 3 participants.
(b) Minimum security requirements
The Secretary, acting through the Commissioner, shall review the minimum security requirements of C–TPAT at least once every year and update such requirements as necessary.
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Statutory Notes and Related Subsidiaries
CTPAT Pilot Program on Participation of Third-Party Logistics Providers
"SECTION 1. SHORT TITLE.
"This Act may be cited as the 'Customs Trade Partnership Against Terrorism Pilot Program Act of 2023' or the 'CTPAT Pilot Program Act of 2023'.
"SEC. 2. DEFINITIONS.
"In this Act:
"(1)
"(A) the Committee on Homeland Security and Governmental Affairs and the Committee on Finance of the Senate; and
"(B) the Committee on Homeland Security and the Committee on Ways and Means of the House of Representatives.
"(2)
"SEC. 3. PILOT PROGRAM ON PARTICIPATION OF THIRD-PARTY LOGISTICS PROVIDERS IN CTPAT.
"(a)
"(1)
"(2)
"(b)
"(1) a non-asset-based third-party logistics provider that—
"(A) arranges international transportation of freight and is licensed by the Department of Transportation; and
"(B) meets such other requirements as the Secretary specifies in the Federal Register notice required by subsection (a)(2); or
"(2) an asset-based third-party logistics provider that—
"(A) facilitates cross border activity and is licensed or bonded by the Federal Maritime Commission, the Transportation Security Administration, U.S. Customs and Border Protection, or the Department of Transportation;
"(B) manages and executes logistics services using its own warehousing assets and resources on behalf of its customers; and
"(C) meets such other requirements as the Secretary specifies in the Federal Register notice required by subsection (a)(2).
"(c)
"(1) ensure that—
"(A) not more than 10 entities described in paragraph (1) of subsection (b) participate in the pilot program; and
"(B) not more than 10 entities described in paragraph (2) of that subsection participate in the program;
"(2) provide for the participation of those entities on a voluntary basis;
"(3) continue the program for a period of not less than one year after the date on which the Secretary publishes the Federal Register notice required by subsection (a)(2); and
"(4) terminate the pilot program not more than 5 years after that date.
"(d)
"SEC. 4. REPORT ON EFFECTIVENESS OF CTPAT.
"(a)
"(b)
"(1) An analysis of—
"(A) security incidents in the cargo supply chain during the 5-year period preceding submission of the report that involved criminal activity, including drug trafficking, human smuggling, commercial fraud, or terrorist activity; and
"(B) whether those incidents involved participants in CTPAT or entities not participating in CTPAT.
"(2) An analysis of causes for the suspension or removal of entities from participating in CTPAT as a result of security incidents during that 5-year period.
"(3) An analysis of the number of active CTPAT participants involved in one or more security incidents while maintaining their status as participants.
"(4) Recommendations to the Commissioner of U.S. Customs and Border Protection for improvements to CTPAT to improve prevention of security incidents in the cargo supply chain involving participants in CTPAT.
"SEC. 5. NO ADDITIONAL FUNDS AUTHORIZED.
"No additional funds are authorized to be appropriated for the purpose of carrying out this Act."
§962. Eligible entities
Importers, customs brokers, forwarders, air, sea, land carriers, contract logistics providers, and other entities in the international supply chain and intermodal transportation system are eligible to apply to voluntarily enter into partnerships with the Department under C–TPAT.
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§963. Minimum requirements
An applicant seeking to participate in C–TPAT shall—
(1) demonstrate a history of moving cargo in the international supply chain;
(2) conduct an assessment of its supply chain based upon security criteria established by the Secretary, acting through the Commissioner, including—
(A) business partner requirements;
(B) container security;
(C) physical security and access controls;
(D) personnel security;
(E) procedural security;
(F) security training and threat awareness; and
(G) information technology security;
(3) implement and maintain security measures and supply chain security practices meeting security criteria established by the Commissioner; and
(4) meet all other requirements established by the Commissioner, in consultation with the Commercial Operations Advisory Committee.
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§964. Tier 1 participants in C–TPAT
(a) Benefits
The Secretary, acting through the Commissioner, shall offer limited benefits to a Tier 1 participant who has been certified in accordance with the guidelines referred to in subsection (b). Such benefits may include a reduction in the score assigned pursuant to the Automated Targeting System of not greater than 20 percent of the high-risk threshold established by the Secretary.
(b) Guidelines
Not later than 180 days after October 13, 2006, the Secretary, acting through the Commissioner, shall update the guidelines for certifying a C–TPAT participant's security measures and supply chain security practices under this section. Such guidelines shall include a background investigation and extensive documentation review.
(c) Timeframe
To the extent practicable, the Secretary, acting through the Commissioner, shall complete the Tier 1 certification process within 90 days of receipt of an application for participation in C–TPAT.
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§965. Tier 2 participants in C–TPAT
(a) Validation
The Secretary, acting through the Commissioner, shall validate the security measures and supply chain security practices of a Tier 1 participant in accordance with the guidelines referred to in subsection (c). Such validation shall include on-site assessments at appropriate foreign locations utilized by the Tier 1 participant in its supply chain and shall, to the extent practicable, be completed not later than 1 year after certification as a Tier 1 participant.
(b) Benefits
The Secretary, acting through the Commissioner, shall extend benefits to each C–TPAT participant that has been validated as a Tier 2 participant under this section, which may include—
(1) reduced scores in the Automated Targeting System;
(2) reduced examinations of cargo; and
(3) priority searches of cargo.
(c) Guidelines
Not later than 180 days after October 13, 2006, the Secretary, acting through the Commissioner, shall develop a schedule and update the guidelines for validating a participant's security measures and supply chain security practices under this section.
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§966. Tier 3 participants in C–TPAT
(a) In general
The Secretary, acting through the Commissioner, shall establish a third tier of C–TPAT participation that offers additional benefits to participants who demonstrate a sustained commitment to maintaining security measures and supply chain security practices that exceed the guidelines established for validation as a Tier 2 participant in C–TPAT under
(b) Criteria
The Secretary, acting through the Commissioner, shall designate criteria for validating a C–TPAT participant as a Tier 3 participant under this section. Such criteria may include—
(1) compliance with any additional guidelines established by the Secretary that exceed the guidelines established pursuant to
(2) submission of additional information regarding cargo prior to loading, as determined by the Secretary;
(3) utilization of container security devices, technologies, policies, or practices that meet standards and criteria established by the Secretary; and
(4) compliance with any other cargo requirements established by the Secretary.
(c) Benefits
The Secretary, acting through the Commissioner, in consultation with the Commercial Operations Advisory Committee and the National Maritime Security Advisory Committee, shall extend benefits to each C–TPAT participant that has been validated as a Tier 3 participant under this section, which may include—
(1) the expedited release of a Tier 3 participant's cargo in destination ports within the United States during all threat levels designated by the Secretary;
(2) further reduction in examinations of cargo;
(3) priority for examinations of cargo; and
(4) further reduction in the risk score assigned pursuant to the Automated Targeting System; and
(5) inclusion in joint incident management exercises, as appropriate.
(d) Deadline
Not later than 2 years after October 13, 2006, the Secretary, acting through the Commissioner, shall designate appropriate criteria pursuant to subsection (b) and provide benefits to validated Tier 3 participants pursuant to subsection (c).
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§967. Consequences for lack of compliance
(a) In general
If at any time a C–TPAT participant's security measures and supply chain security practices fail to meet any of the requirements under this part, the Commissioner may deny the participant benefits otherwise available under this part, in whole or in part. The Commissioner shall develop procedures that provide appropriate protections to C–TPAT participants before benefits are revoked. Such procedures may not limit the ability of the Commissioner to take actions to protect the national security of the United States.
(b) False or misleading information
If a C–TPAT participant knowingly provides false or misleading information to the Commissioner during the validation process provided for under this part, the Commissioner shall suspend or expel the participant from C–TPAT for an appropriate period of time. The Commissioner, after the completion of the process under subsection (c), may publish in the Federal Register a list of participants who have been suspended or expelled from C–TPAT pursuant to this subsection, and may make such list available to C–TPAT participants.
(c) Right of appeal
(1) In general
A C–TPAT participant may appeal a decision of the Commissioner pursuant to subsection (a). Such appeal shall be filed with the Secretary not later than 90 days after the date of the decision, and the Secretary shall issue a determination not later than 180 days after the appeal is filed.
(2) Appeals of other decisions
A C–TPAT participant may appeal a decision of the Commissioner pursuant to subsection (b). Such appeal shall be filed with the Secretary not later than 30 days after the date of the decision, and the Secretary shall issue a determination not later than 180 days after the appeal is filed.
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§968. Third party validations
(a) Plan
The Secretary, acting through the Commissioner, shall develop a plan to implement a 1-year voluntary pilot program to test and assess the feasibility, costs, and benefits of using third party entities to conduct validations of C–TPAT participants.
(b) Consultations
Not later than 120 days after October 13, 2006, after consulting with private sector stakeholders, including the Commercial Operations Advisory Committee, the Secretary shall submit a report to the appropriate congressional committees on the plan described in subsection (a).
(c) Pilot program
(1) In general
Not later than 1 year after the consultations described in subsection (b), the Secretary shall carry out the 1-year pilot program to conduct validations of C–TPAT participants using third party entities described in subsection (a).
(2) Authority of the Secretary
The decision to validate a C–TPAT participant is solely within the discretion of the Secretary, or the Secretary's designee.
(d) Certification of third party entities
The Secretary shall certify a third party entity to conduct validations under subsection (c) if the entity—
(1) demonstrates to the satisfaction of the Secretary that the entity has the ability to perform validations in accordance with standard operating procedures and requirements designated by the Secretary; and
(2) agrees—
(A) to perform validations in accordance with such standard operating procedures and requirements (and updates to such procedures and requirements); and
(B) to maintain liability insurance coverage at policy limits and in accordance with conditions to be established by the Secretary; and
(3) signs an agreement to protect all proprietary information of C–TPAT participants with respect to which the entity will conduct validations.
(e) Information for establishing limits of liability insurance
A third party entity seeking a certificate under subsection (d) shall submit to the Secretary necessary information for establishing the limits of liability insurance required to be maintained by the entity under this Act.
(f) Additional requirements
The Secretary shall ensure that—
(1) any third party entity certified under this section does not have—
(A) any beneficial interest in or any direct or indirect control over the C–TPAT participant for which the validation services are performed; or
(B) any other conflict of interest with respect to the C–TPAT participant; and
(2) the C–TPAT participant has entered into a contract with the third party entity under which the C–TPAT participant agrees to pay all costs associated with the validation.
(g) Monitoring
(1) In general
The Secretary shall regularly monitor and inspect the operations of a third party entity conducting validations under subsection (c) to ensure that the entity is meeting the minimum standard operating procedures and requirements for the validation of C–TPAT participants established by the Secretary and all other applicable requirements for validation services.
(2) Revocation
If the Secretary determines that a third party entity is not meeting the minimum standard operating procedures and requirements designated by the Secretary under subsection (d)(1), the Secretary shall—
(A) revoke the entity's certificate of conformance issued under subsection (d)(1); and
(B) review any validations conducted by the entity.
(h) Limitation on authority
The Secretary may only grant a C–TPAT validation by a third party entity pursuant to subsection (c) if the C–TPAT participant voluntarily submits to validation by such third party entity.
(i) Report
Not later than 30 days after the completion of the pilot program conducted pursuant to subsection (c), the Secretary shall submit a report to the appropriate congressional committees that contains—
(1) the results of the pilot program, including the extent to which the pilot program ensured sufficient protection for proprietary commercial information;
(2) the cost and efficiency associated with validations under the pilot program;
(3) the impact of the pilot program on the rate of validations conducted under C–TPAT;
(4) any impact on national security of the pilot program; and
(5) any recommendations by the Secretary based upon the results of the pilot program.
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Editorial Notes
References in Text
This Act, referred to in subsec. (e), is
§969. Revalidation
The Secretary, acting through the Commissioner, shall develop and implement—
(1) a revalidation process for Tier 2 and Tier 3 participants;
(2) a framework based upon objective criteria for identifying participants for periodic revalidation not less frequently than once during each 4-year period following the initial validation; and
(3) an annual plan for revalidation that includes—
(A) performance measures;
(B) an assessment of the personnel needed to perform the revalidations; and
(C) the number of participants that will be revalidated during the following year.
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§970. Noncontainerized cargo
The Secretary, acting through the Commissioner, shall consider the potential for participation in C–TPAT by importers of noncontainerized cargoes that otherwise meet the requirements under this part.
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§971. C–TPAT program management
(a) In general
The Secretary, acting through the Commissioner, shall establish sufficient internal quality controls and record management to support the management systems of C–TPAT. In managing the program, the Secretary shall ensure that the program includes:
(1) Strategic plan
A 5-year plan to identify outcome-based goals and performance measures of the program.
(2) Annual plan
An annual plan for each fiscal year designed to match available resources to the projected workload.
(3) Standardized work program
A standardized work program to be used by agency personnel to carry out the certifications, validations, and revalidations of participants. The Secretary shall keep records and monitor staff hours associated with the completion of each such review.
(b) Documentation of reviews
The Secretary, acting through the Commissioner, shall maintain a record management system to document determinations on the reviews of each C–TPAT participant, including certifications, validations, and revalidations.
(c) Confidential information safeguards
In consultation with the Commercial Operations Advisory Committee, the Secretary, acting through the Commissioner, shall develop and implement procedures to ensure the protection of confidential data collected, stored, or shared with government agencies or as part of the application, certification, validation, and revalidation processes.
(d) Resource management staffing plan
The Secretary, acting through the Commissioner, shall—
(1) develop a staffing plan to recruit and train staff (including a formalized training program) to meet the objectives identified in the strategic plan of the C–TPAT program; and
(2) provide cross-training in postincident trade resumption for personnel who administer the C–TPAT program.
(e) Report to Congress
In connection with the President's annual budget submission for the Department, the Secretary shall report to the appropriate congressional committees on the progress made by the Commissioner to certify, validate, and revalidate C–TPAT participants. Such report shall be due on the same date that the President's budget is submitted to the Congress.
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§972. Additional personnel
For fiscal years 2008 and 2009, the Commissioner shall increase by not less than 50 the number of full-time personnel engaged in the validation and revalidation of C–TPAT participants (over the number of such personnel on the last day of the previous fiscal year), and shall provide appropriate training and support to such additional personnel.
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§973. Authorization of appropriations
(a) C–TPAT
There are authorized to be appropriated to the United States Customs and Border Protection to carry out the provisions of
(1) $65,000,000 for fiscal year 2008;
(2) $72,000,000 for fiscal year 2009; and
(3) $75,600,000 for fiscal year 2010.
(b) Additional personnel
In addition to any amounts otherwise appropriated to the United States Customs and Border Protection, there are authorized to be appropriated for the purpose of meeting the staffing requirement provided for in
(1) $8,500,000 for fiscal year 2008;
(2) $17,600,000 for fiscal year 2009;
(3) $19,000,000 for fiscal year 2010;
(4) $20,000,000 for fiscal year 2011; and
(5) $21,000,000 for fiscal year 2012.
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