Supply chain security

To keep business moving, especially in a world under heightened security, there is a fast lane through the border—the Customs-Trade Partnership Against Terrorism (C-TPAT).

Prior to 9/11, the U.S. Customs Service's highest priority was preventing narcotics and contraband smuggling. Following 9/11, combating terrorism became the top priority at Customs. Ports became viewed as potential targets of terrorist acts; the containers that flowed through them, possible vessels carrying weapons of mass destruction.

C-TPAT, a joint government-business initiative, was created by Customs (now the Bureau of Customs and Border Protection, a division of the Department of Homeland Security) to strengthen supply chain and border security.

Recognizing that toy importers are most vulnerable in this situation, the TIA (Toy Industry Association) was one of the first of a small group of associations to take the initiative to partner with the Bureau of Customs in this cargo and port security program. In 2003 the TIA was granted approval to process C-TPAT applications for its members and their overseas factories.

The rationale for a toy company to participate in C-TPAT is evident:

• Social responsibility: Participate in the war against terrorism and keep international trade flowing smoothly.
• Fast lane: Reduced inspections reduce border time; this will be critical if there is another terrorist incident.
• Reduced cargo loss: Increased security reduces loss.
• Account manager assigned: Improved communication and coordination with Customs.
• Cost savings: C-TPAT is a pre-requisite for: a) Importer Self Assessment Program (ASA), self-policing, not Customs verification; b) Automated Commercial Environment (ACE), online processing of transactions; and c) Bi-monthly or monthly Customs payments, reduced administration cost.
• C-TPAT is here to stay: Customs has received additional funding for the program.
• Competitive advantage: Your customers have signed up and expect you to do the same.
• Brand protection: Don't be associated with a possible terrorist event.

TIA members are kept abreast of developments in this and other areas of international trade through the organization's regular e-mailed bulletin service, and a C-TPAT roundtable will be one of the highlights of TIA's Multi-Discipline Conference (see box), July 18-20, 2004, in Chicago. The event is open to all, with a discount for TIA members.

The C-TPAT roundtable, one of the sessions in the conference's International Trade track, will feature panelists from Customs, the Toy Shippers Association (TOYSA), Pinkerton Security Agency along with a major steamship line executive.

• Application phase: A company officer signs a memo of understanding (MOU) with Customs to participate in C-TPAT and completes and returns a questionnaire within 60 days (a 30 day extension is available). Within the 60 days, the company assesses its supply chain security and develops a security improvement program.
• Implementation phase: The company implements C-TPAT-compliant supply chain security policies and procedures, educates employees and periodically assesses suppliers.

As an association service, TIA and TOYSA (www.toysa.com) established a program to assist members with the application phase. For those companies that wish to apply themselves, an e-learning course is also available.

For C-TPAT to be most effective and to gain the highest level of cargo security, close cooperation is needed among Customs, manufacturers, importers, carriers, brokers and warehouse operators, and while C-TPAT is not a mandatory program, membership may not be open-ended. The TIA urges all of its members who have not signed on to do so without delay, and avoid the chance of being treated as a potential "high-risk entity" resulting in delayed release of cargo imports. For questions on how TIA can assist in becoming a C-TPAT member, contact Gary Klein, TIA's senior vice president, government, legal and regulatory affairs, at: gklein@toy-tia,org; or by calling 202-207-3600 for details.