Customs –Trade Partnership Customs –Trade Partnership Against TerrorismAgainst Terrorism

ATEC

(Insert Company Name)Copyright © 2005, 2006 ATEC Systems, Ltd.

Agenda BackgroundBackground What is C-TPAT?What is C-TPAT? Who comprises the Who comprises the

Supply Chain?Supply Chain? What does participation in What does participation in

C-TPAT require?C-TPAT require? What are the benefits?What are the benefits? What are the threats?What are the threats? How criminals circumvent How criminals circumvent

security measuressecurity measures What are the foundations What are the foundations

of cargo security?of cargo security?

Securing the Supply Securing the Supply Chain at (Insert name). Chain at (Insert name). What can we/you do?What can we/you do?

Recognizing potential Recognizing potential security riskssecurity risks

Documentation fraudDocumentation fraud Failure is not an option!Failure is not an option! Questions?Questions?

Customs and Border Protection (CBP)

Part of the Department of Part of the Department of Homeland SecurityHomeland Security

Formed in the years Formed in the years following 9/11, by merging:following 9/11, by merging: U.S. Customs ServiceU.S. Customs Service Agricultural and Plant Agricultural and Plant

Health InspectionHealth Inspection Immigration and Immigration and

Naturalization ServicesNaturalization Services U.S. Border Patrol U.S. Border Patrol

Customs and Border Protection (CBP)

Customs and Border Customs and Border Protection assumes Protection assumes responsibility for: responsibility for: 7,514 miles of border 7,514 miles of border 95,000 miles of 95,000 miles of

shorelineshoreline 350 ports of entry350 ports of entry 750 million people 750 million people

annuallyannually 51,000 foreign vessel 51,000 foreign vessel

calls calls 11.2 million trucks11.2 million trucks 2.2 million rail cars2.2 million rail cars

What is C-TPAT?

The Customs-Trade Partnership The Customs-Trade Partnership Against Terrorism (C-TPAT) is a Against Terrorism (C-TPAT) is a major program initiative to help major program initiative to help protect the United States from future protect the United States from future atrocities like Sept 11, 2001atrocities like Sept 11, 2001

What is C-TPAT?

Customs-Trade Partnership Against Customs-Trade Partnership Against TerrorismTerrorism

A joint government business initiative to build A joint government business initiative to build cooperative relationships that strengthen the cooperative relationships that strengthen the overall supply chain and border securityoverall supply chain and border security

Customs recognizes that they can only be Customs recognizes that they can only be successful with industry cooperation successful with industry cooperation

www.cbp.govwww.cbp.gov www.dhs.govwww.dhs.gov

Who comprises the Supply Chain?

Manufacturers, Manufacturers, shippers, suppliers, shippers, suppliers, vendorsvendors

CarriersCarriers Ocean linesOcean lines AirlinesAirlines RailroadsRailroads Truck linesTruck lines

WarehousesWarehouses

Who comprises the Supply Chain?

NVOCC’sNVOCC’s Cargo handlersCargo handlers InspectorsInspectors FumigatorsFumigators Government agenciesGovernment agencies Freight forwardersFreight forwarders LongshoremenLongshoremen Customs brokersCustoms brokers ImportersImporters

What does participation in C-TPAT Require?

A signed Agreement with Customs and Border A signed Agreement with Customs and Border Protection (CBP)Protection (CBP) Conduct a comprehensive assessment of the Conduct a comprehensive assessment of the

importers global supply chain based on C-importers global supply chain based on C-TPAT criteriaTPAT criteria

Develop a written and verifiable process for Develop a written and verifiable process for determining risk throughout the supply chain determining risk throughout the supply chain and selection of business partnersand selection of business partners

Implement and maintain security measuresImplement and maintain security measures

What does participation in C-TPAT Require?

Self-assessment of our supply chain security Self-assessment of our supply chain security using C-TPAT best practice guidelinesusing C-TPAT best practice guidelines Business Partner RequirementsBusiness Partner Requirements Cargo SecurityCargo Security Container SecurityContainer Security Physical Access ControlsPhysical Access Controls Personnel SecurityPersonnel Security Procedural SecurityProcedural Security Security Training and Threat AwarenessSecurity Training and Threat Awareness Physical SecurityPhysical Security Information Technology SecurityInformation Technology Security

What does participation in C-TPAT Require?

Submission of a supply Submission of a supply chain Security Profile to chain Security Profile to CBPCBP

Development and Development and implementation of a implementation of a program to enhance our program to enhance our supply chain security supply chain security

Verification within 3 Verification within 3 yearsyears

What are the benefits of participating in C-TPAT?

A reduced number of cargo inspectionsA reduced number of cargo inspections Access to FAST lane at land borders Access to FAST lane at land borders An assigned account manager at CustomsAn assigned account manager at Customs Access to C-TPAT membership listAccess to C-TPAT membership list An emphasis on self policing, not verificationsAn emphasis on self policing, not verifications An opportunity to play an active role in the war An opportunity to play an active role in the war

against terrorismagainst terrorism A secure supply chain for employees, suppliers and A secure supply chain for employees, suppliers and

customerscustomers

What are the benefits of participating in C-TPAT?

Companies that spend on supply chain security can expect an Companies that spend on supply chain security can expect an advantage far outweighing the costs of implementing security advantage far outweighing the costs of implementing security processes, according to a study by Stanford University.processes, according to a study by Stanford University.

The study quantified for the first time the benefits of investing in supply The study quantified for the first time the benefits of investing in supply chain security:chain security:

Companies collectively reduced their Customs inspections by 48%Companies collectively reduced their Customs inspections by 48% Increased the automated handling of their imports by 43%Increased the automated handling of their imports by 43% Saw a 29% reduction in transit timesSaw a 29% reduction in transit times Asset visibility in the supply chain improved by 50%Asset visibility in the supply chain improved by 50% 30% improvement in on-time shipping to their customers 30% improvement in on-time shipping to their customers Reduced time taken to identify problems by 21%Reduced time taken to identify problems by 21% Reduced time taken for problem solving dropped by 31%Reduced time taken for problem solving dropped by 31% Reduced inventory theft by 38%Reduced inventory theft by 38% Excess inventory was reduced by 14%Excess inventory was reduced by 14% Reduced customer attrition by 26%Reduced customer attrition by 26%

What are the threats?

Terrorism, sabotage Terrorism, sabotage Trafficking – drugs; Trafficking – drugs;

conventional, nuclear, conventional, nuclear, chemical or biological chemical or biological weaponsweapons

Illegal entry – Illegal entry – stowaways in stowaways in containers, trailerscontainers, trailers

Theft of cargo, Theft of cargo, personal property or personal property or informationinformation

How criminals circumvent security measures

Loitering near the facility Loitering near the facility observing procedures, observing procedures, asking questionsasking questions

Taking pictures, obtaining Taking pictures, obtaining plans or making diagrams plans or making diagrams of facilitiesof facilities

Impersonating workers i.e. Impersonating workers i.e. pest control pest control

Calling or e-mailing Calling or e-mailing employees about employees about proceduresprocedures

What are the foundations of cargo security?

Identify the risksIdentify the risks Understand the risksUnderstand the risks Isolate the risksIsolate the risks Allocate resources to Allocate resources to

neutralize the risksneutralize the risks Assign ownership for Assign ownership for

actionaction Anticipate acts Anticipate acts Implement solutionsImplement solutions Measure results and Measure results and

share best practicesshare best practices

Securing the Supply Chain at (Insert Name). What can we/you do? Educate employeesEducate employees Know our partnersKnow our partners Create and share our Create and share our

security policy security policy expectationsexpectations

Use C-TPAT certified Use C-TPAT certified service providersservice providers

Implement a Security Implement a Security Policy and ProceduresPolicy and Procedures

Secure our facilities, Secure our facilities, systems and conveyancessystems and conveyances

Be conscious of security Be conscious of security day to dayday to day

Securing the Supply Chain at (Insert Name). What can we/you do?

Challenge unfamiliar or Challenge unfamiliar or unidentified visitors in unidentified visitors in the office or warehousethe office or warehouse

Don’t share system Don’t share system passwordspasswords

Report in confidence Report in confidence any suspected or actual any suspected or actual anomaly (irregularity) or anomaly (irregularity) or illegal activity to illegal activity to managementmanagement

Securing the Supply Chain at (Insert Name). What can we/you do?

Report potential security Report potential security risks to management risks to management i.e. broken lock, fence, i.e. broken lock, fence, security light, etc.security light, etc.

Don’t share information Don’t share information outside (Insert Name)outside (Insert Name)

Be wary of outside Be wary of outside requests for information requests for information about company policies, about company policies, procedures, assets, etc.procedures, assets, etc.

Recognizing potential security risks

Activity out of the normActivity out of the norm Loitering out of normal sight linesLoitering out of normal sight lines Attempts to bypass securityAttempts to bypass security Clothing not suited to the weatherClothing not suited to the weather Noises or odors not expected from containersNoises or odors not expected from containers Containers with holes, patches, missing or Containers with holes, patches, missing or

damaged seals or seal numbers that don’t damaged seals or seal numbers that don’t matchmatch

Incorrect Hazmat labels for cargoIncorrect Hazmat labels for cargo Can you think of others?Can you think of others?

Documentation Fraud

Fraud involves the use of dishonest or Fraud involves the use of dishonest or deceitful conduct in order to obtain some deceitful conduct in order to obtain some unjust advantage over someone else.unjust advantage over someone else.

The basic motivation for fraud is greed.The basic motivation for fraud is greed. Fraud is the product of three factors: Fraud is the product of three factors:

Motivation – someone willing to commitMotivation – someone willing to commit Victim or targetVictim or target Lack of a capable guardianLack of a capable guardian

Documentation Fraud

Three ways to limit fraud:Three ways to limit fraud: Reduce the supply of motivated offendersReduce the supply of motivated offenders Protect and educate the targetsProtect and educate the targets** Limit opportunities by making the crime Limit opportunities by making the crime

difficult to commitdifficult to commit*** * controllable factorscontrollable factors

How to detect fraudHow to detect fraud Look for anomalies i.e. changes in lifestyle, Look for anomalies i.e. changes in lifestyle,

valuation or description on documentation, valuation or description on documentation, increase in claims, etc.increase in claims, etc.

Failure is not an option!

Loss of lifeLoss of life Trade is shut downTrade is shut down Production lines are Production lines are

shut downshut down Scarce and Scarce and

expensive food, expensive food, clothes, etc.clothes, etc.

Layoffs and Layoffs and business failuresbusiness failures

Questions?"The message should be clear -- if a business takes steps to secure its cargo against terrorism, we will give it the 'fast lane' through the border...C-TPAT is a program through which businesses win, governments win, and most importantly, the American people win."(US Customs Commissioner Robert C. Bonner, April 16, 2002)