CBP prepares pilot program for third-party validators
U.S. Customs and Border Protection expects to complete this month a preliminary blueprint to test the feasibility of using outside auditors to help verify the supply chain security practices of foreign suppliers, Commissioner Ralph Basham said Wednesday.
Checking the internal controls of U.S. importers and their suppliers to make sure they can maintain shipment integrity is part of the Customs-Trade Partnership Against Terrorism, a voluntary program that bestows fasters customs clearance on shippers that prove their security systems are trustworthy.
Basham said he has asked his staff to come up with a “strawman” plan for using third-party validators in certain parts of the world.
Third-party validation “is a tool that we can use to get into those areas that we don’t have access to,” such as China, Basham told reporters after a speech at the U.S. Chamber of Commerce.
China has not granted U.S. Customs officers permission to enter the country and conduct security inspections.
“We’ve approached the Chinese government to do supply chain checks as a federal government, but we’ve been unable to get that” approval, Basham said.
CBP has nearly reached its staff goal of 158 supply chain specialists who travel to foreign factories, ports and warehouse locations to make sure companies are following their CBP-approved security plans. The agency has been criticized in the past for the slow pace of validating importers after they submit their security plans, but expects to erase its audit backlog by next year as program resources increase.
CBP officials do not view the use of outside auditors as a manpower supplement to speed up the validation process, but simply as a tool to gain supply chain visibility in countries that do not permit access for political reasons or are too dangerous for government validators to go.
“We believe it’s still inherently a governmental function,” said Todd Owen, executive director of cargo and conveyance security, in an interview last summer.
The port security bill passed by Congress in late September includes a provision instructing the Department of Homeland Security to set up a pilot program to use third-party auditors to check whether companies are properly implementing approved controls in conjunction with their logistics partners.
Basham said President Bush is scheduled to sign the Security and Accountability for Every Port (SAFE) Act on Friday.
The commissioner said that the agency is still wrestling with how to collect more advance data on import transactions for improved targeting of inspections. CBP has identified 10 data elements from shippers and two from ocean carriers that it believes can help with security analysis of shipments, but still must work out protocols for sharing the information.
Basham said a regulation on advance data collection is possible by the end of the year. Officials had previously suggested that a rule might be ready as early as the fall.
CBP is using many of the same techniques used to screen shipments for terrorist connections to intercept shipments of counterfeit goods, Basham said in his speech.
In the last five years, seizures of copycat goods has increased 125 percent, he said. CBP officers made 8,000 seizures in 2005 and have seized 13,500 counterfeit shipments through August of this year.
CBP is using risk-management techniques to identify and target shipments at high risk of containing pirated merchandise, is working with the private sector to identify criminal business practices, and using audits to deprive counterfeiters of profits, Basham said.
“Through innovative techniques and with the continued cooperation of our partners in the private sector, in fellow U.S. government agencies and in foreign governments, we can continue to make strides to stop the trade in counterfeit and pirated goods,” Basham said.
Combating intellectual property violations is a top priority of the Chamber.