United States Customs and Border Protection CBP and Canada Border Services Agency CBSA

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2. 2 SAFE PORT ACT 2006 (Excerpt) C-TPAT is a voluntary program that enables CBP to partner with private companies to review their supply chains and improve the security of their shipments to the United States C-TPAT members receive facilitation benefits that result in the likelihood of reduced scrutiny of their shipments, such as a reduced number of inspections or shorter wait times for their shipments. In October 2006, the SAFE Port Act formalized C-TPAT into law.

3. 3 CBP Daily Operations Processes: 965,167 passengers and pedestrians 47,293 truck, rail, and sea containers Interdict, Arrest, and Apprehend: 11,435 pounds of narcotics $187,176 in undeclared or illicit currency 75 arrests of criminals at ports of entry 1,903 apprehensions at and in between the ports of entry for illegal entry Protects More Than: 5,000 miles of border with Canada 1,900 miles of border with Mexico 95,000 miles of shoreline Instructor Notes: Explain CBP’s daily challenges in processing people, cargo and conveyances. Explain this is a rough estimate. CBP might do more on any given day. Instructor Notes: Explain CBP’s daily challenges in processing people, cargo and conveyances. Explain this is a rough estimate. CBP might do more on any given day.

4. 4 Instructor Notes: Explain how C-TPAT is one of the key elements of CBP’s layered enforcement approach. Instructor Notes: Explain how C-TPAT is one of the key elements of CBP’s layered enforcement approach.

5. 5 The C-TPAT Approach Voluntary Partnership - cooperatively developed minimum security criteria Provides for the customized application of guidelines by members Provides tangible benefits Trust but verify information Discuss Program Approaches: Voluntary - As previously stated, the C-TPAT program is a voluntary partnership w/ jointly developed security guidelines. Because of the scale and mission of C-TPAT, (supply chains, anti terrorism and national security), this approach was deemed to be more effective than creating mandatory requirements, that are sometimes necessary in certain situations, but always effective. Customized application of guidelines by members and/or colleagues - more times than not , positive validation results in companies not only meeting expectations but in many cases exceeding the minimum standard. Clear Benefits - C-TPAT certified companies are eligible for benefits to include a reduced number of examinations. Trust But Verify Information - This approach adopts the requirement for conducting the supply chain security validations on C-TPAT companies by verifying information submitted in the companies security profile. Discuss Program Approaches: Voluntary - As previously stated, the C-TPAT program is a voluntary partnership w/ jointly developed security guidelines. Because of the scale and mission of C-TPAT, (supply chains, anti terrorism and national security), this approach was deemed to be more effective than creating mandatory requirements, that are sometimes necessary in certain situations, but always effective. Customized application of guidelines by members and/or colleagues - more times than not , positive validation results in companies not only meeting expectations but in many cases exceeding the minimum standard. Clear Benefits - C-TPAT certified companies are eligible for benefits to include a reduced number of examinations. Trust But Verify Information - This approach adopts the requirement for conducting the supply chain security validations on C-TPAT companies by verifying information submitted in the companies security profile.

6. 6 C-TPAT Objectives Emphasize prevention vs. interdiction Promote shared responsibility Promote security awareness Increase supply chain security and supply chain efficiency C-TPAT allows Customs to use it’s long interdiction and enforcement experience and knowledge and expand upon those qualities with C-TPAT objectives such as: Prevention: the mission and goal to help identify a “security compromise” as early as possible (ie: CSI, Supply Chain Validations) vs. traditional interdiction, in which CBP is looking for the threats after arrival, which is not an ideal situation because the WMD may be already here. Shared Responsibility : program invites participation of all trade sectors and create opportunities for companies to become proactive in their supply chain procedures (ie:training employees about container security, having reporting mechanisms in place at their owned or vendor facilities for reporting anomalies) Security awareness: opportunity of having employees understand how smuggling, theft, organized crime networks work - they will help identify them Security and efficiency: efficient supply chain is a more secure supply chain environment, which helps overall in conveying your legitimacy and commitment amongst the international trade community. C-TPAT allows Customs to use it’s long interdiction and enforcement experience and knowledge and expand upon those qualities with C-TPAT objectives such as: Prevention: the mission and goal to help identify a “security compromise” as early as possible (ie: CSI, Supply Chain Validations) vs. traditional interdiction, in which CBP is looking for the threats after arrival, which is not an ideal situation because the WMD may be already here. Shared Responsibility : program invites participation of all trade sectors and create opportunities for companies to become proactive in their supply chain procedures (ie:training employees about container security, having reporting mechanisms in place at their owned or vendor facilities for reporting anomalies) Security awareness: opportunity of having employees understand how smuggling, theft, organized crime networks work - they will help identify them Security and efficiency: efficient supply chain is a more secure supply chain environment, which helps overall in conveying your legitimacy and commitment amongst the international trade community.

7. 7 Instructor Notes: Explain what an SCSS’s job function is. We work for CBP, not the company. The position was established in 2003 with only 20 SCSSs. Today, six years later there are close to 200 SCSSs. At this point, refrain from making the presentation about recruitment (ex. positions opening up, good/bad about the job, countries you have visited). Just state the facts and move on. Emphasis that there is extensive travel with the position and the countries that are visited are considered to be high risk. A good example to emphasis this point is to bring up the 2009 terrorist attacks in Jakarta, Indonesia. Two SCSS were inside the Marriott hotel when the bombs went off. This slide has to be updated before each presentation. Instructor Notes: Explain what an SCSS’s job function is. We work for CBP, not the company. The position was established in 2003 with only 20 SCSSs. Today, six years later there are close to 200 SCSSs. At this point, refrain from making the presentation about recruitment (ex. positions opening up, good/bad about the job, countries you have visited). Just state the facts and move on. Emphasis that there is extensive travel with the position and the countries that are visited are considered to be high risk. A good example to emphasis this point is to bring up the 2009 terrorist attacks in Jakarta, Indonesia. Two SCSS were inside the Marriott hotel when the bombs went off. This slide has to be updated before each presentation.

8. 8 C-TPAT Secure Communications Portal Instructor Notes: Explain the benefits of the C-TPAT Portal. From being an all paper process, to being an automated process.Instructor Notes: Explain the benefits of the C-TPAT Portal. From being an all paper process, to being an automated process.

9. 9 What is a Validation? The validation process is a joint review of the supply chain based on the security profile submitted and a documented risk assessment. Each validation is customized according to the partner. An open forum to discuss issues, share ideas, address vulnerabilities, and develop solutions. Understand the role of CBP and the Trade Community in the war against terrorism. Trust but verify system (reliable, accurate, and effective). Instructor Notes: A C-TPAT validation is a process through which CBP/ C-TPAT SCSSs meets with company representatives and visit selected domestic and foreign sites to verify supply chain security measures are accurate and are being followed. The security measures that are being verified for accuracy are contained in the C-TPAT participant’s security profile. The principal goal of a validation for CBP is: To ensure that the company’s C-TPAT security profile is reliable, accurate, and effective. Validations also provide a forum through which CBP and a C-TPAT participant can build a stronger partnership by discussing supply chain security issues, sharing “best practices,” and cooperatively developing solutions to address potential vulnerabilities. The face-to-face nature of a validation encourages both CBP and the C-TPAT participant to better understand the role each plays in securing our borders against international terrorismInstructor Notes: A C-TPAT validation is a process through which CBP/ C-TPAT SCSSs meets with company representatives and visit selected domestic and foreign sites to verify supply chain security measures are accurate and are being followed. The security measures that are being verified for accuracy are contained in the C-TPAT participant’s security profile. The principal goal of a validation for CBP is: To ensure that the company’s C-TPAT security profile is reliable, accurate, and effective. Validations also provide a forum through which CBP and a C-TPAT participant can build a stronger partnership by discussing supply chain security issues, sharing “best practices,” and cooperatively developing solutions to address potential vulnerabilities. The face-to-face nature of a validation encourages both CBP and the C-TPAT participant to better understand the role each plays in securing our borders against international terrorism

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11. 11 FY10 – Most Costly Exams Most Costly Exams (Excluding Rail) - Most costly + Time consuming = Expensive Non–Intrusive = CERTS, This is the number of entries for which one or more shipments (bill entry pairs) had one or more exams in CERTS with an event type in: NII_EXAM, NII_W_PHY, PHY_EXAM, PHY_LN_EXM: CERTS C-TPAT Members/Tier II members are between 2.0 to 2.3 times less likely to experience Intrusive = SSXM, This is the number of entries for which one of more shipments (bill entry pairs) had one of more Cargo Release Line exams via SSW/SSXM as pulled from the ATS CARGO_EXAM table: SSXM C-TPAT Members/Tier II members are between 3.2 to 6.7 times less likely to experience Intensive = Intensive, This is the number of entries for which one or more shipments (bill entry pairs) had an intensive flag set by ACS selectivity: Intensive C-TPAT Members/Tier II members are between 3.4 to 7.8 times less likely to experience DEVAN = DEVAN , This is the number of entries for which one or more shipments (bill entry pairs) had one or more exams in the DEVAN table: DEVAN C-TPAT Members/Tier II members are between 4.4 to 7.3 times less likely to experienceMost Costly Exams (Excluding Rail) - Most costly + Time consuming = Expensive Non–Intrusive = CERTS, This is the number of entries for which one or more shipments (bill entry pairs) had one or more exams in CERTS with an event type in: NII_EXAM, NII_W_PHY, PHY_EXAM, PHY_LN_EXM: CERTS C-TPAT Members/Tier II members are between 2.0 to 2.3 times less likely to experience Intrusive = SSXM, This is the number of entries for which one of more shipments (bill entry pairs) had one of more Cargo Release Line exams via SSW/SSXM as pulled from the ATS CARGO_EXAM table: SSXM C-TPAT Members/Tier II members are between 3.2 to 6.7 times less likely to experience Intensive = Intensive, This is the number of entries for which one or more shipments (bill entry pairs) had an intensive flag set by ACS selectivity: Intensive C-TPAT Members/Tier II members are between 3.4 to 7.8 times less likely to experience DEVAN = DEVAN , This is the number of entries for which one or more shipments (bill entry pairs) had one or more exams in the DEVAN table: DEVAN C-TPAT Members/Tier II members are between 4.4 to 7.3 times less likely to experience

12. 12 FY10 – Vessel Entry Exams Vessel Entry Exams – Most costly + Time consuming = Expensive Intrusive = SSXM, This is the number of entries for which one of more shipments (bill entry pairs) had one of more Cargo Release Line exams via SSW/SSXM as pulled from the ATS CARGO_EXAM table: SSXM C-TPAT Members/Tier II members are between 5.5 to 15 times less likely to experience DEVAN = This is the number of entries for which one or more shipments (bill entry pairs) had one or more exams in the DEVAN table: DEVAN C-TPAT Members/Tier II members are between 4.6 to 10 times less likely to experience Intensive = This is the number of entries for which one or more shipments (bill entry pairs) had an intensive flag set by ACS selectivity: Intensive C-TPAT Members/Tier II members are between 6.7 to 32 times less likely to experienceVessel Entry Exams – Most costly + Time consuming = Expensive Intrusive = SSXM, This is the number of entries for which one of more shipments (bill entry pairs) had one of more Cargo Release Line exams via SSW/SSXM as pulled from the ATS CARGO_EXAM table: SSXM C-TPAT Members/Tier II members are between 5.5 to 15 times less likely to experience DEVAN = This is the number of entries for which one or more shipments (bill entry pairs) had one or more exams in the DEVAN table: DEVAN C-TPAT Members/Tier II members are between 4.6 to 10 times less likely to experience Intensive = This is the number of entries for which one or more shipments (bill entry pairs) had an intensive flag set by ACS selectivity: Intensive C-TPAT Members/Tier II members are between 6.7 to 32 times less likely to experience

13. 13 Instructor Notes: This slide has to be updated before each presentation.Instructor Notes: This slide has to be updated before each presentation.

14. 14  Canada Border Services Agency Trusted Traders Programs AEO WCO Global Conference April 17-19, 2012 Seoul, Korea

15. 15 CBSA Trusted Traders Programs The CBSA has three complimentary Trusted Traders programs that provide facilitative benefits to low-risk businesses who partner with us in security and compliance Partners in Protection (supply chain security) Customs Self Assessment (books & records) Partners in Compliance (compliance) Each has a different focus but together they represent a comprehensive strategy that allows the CBSA to focus on higher and unknown risk shipments

16. 16 Partners in Protection (PIP) The PIP program enlists the cooperation of companies directly involved in cross-border trade in an effort to secure the supply chain. Aligns with the Framework of Standards to Secure and Facilitate Global Trade (SAFE) of the World Customs Organization (WCO). Enables Canada to enter into Mutual Recognition Arrangements (MRA) with similar programs in other countries. The approval process involves the CBSA: Reviewing the company’s Security Profile Performing a risk assessment; Conducting a site validation

17. 17 Customs Self Assessment (CSA) CSA simplifies many import requirements so that low-risk shipments can be processed more quickly and efficiently at the border Streamlined accounting, payment and adjustment processes for all imported goods. Joint Canada-US initiative that enhances border and trade chain security and allows for expedited movement through dedicated lanes/booths. Applicants to the CSA program undergo a two-part application process: Part 1 ? a risk assessment to demonstrate compliance history Part 2 ? an assessment of their business processes and books/records to ensure linkages, controls and audit trails support CSA requirements

18. 18 Partners in Compliance (PIC) Business-to-government partnership that allows importers to self-audit their own books and records for trade compliance, in particular origin, classification, and valuation Pilot was launched in 2004 to build upon the CSA program Members are removed from CBSA post-release verification activities Future plan is to incorporate under CSA as a benefit

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23. 23 International Partnerships 2008 PIP signed MRA with U.S. C-TPAT Canada and the U.S. are now working together to further harmonize the two programs. 2010 PIP signed MRAs with Japan, Singapore, and South Korea Canada is now collaborating separately with Singapore, South Korea and Japan on the implementation of each MRA.

24. 24  Beyond the Border:“A Shared Vision for Perimeter Security and Economic Competitiveness” & Harmonization of the PIP and C-TPAT programs

25. 25 Canada and the U.S. Border Canada’s border with the U.S. is approximately 8,900 kilometres long (includes both land and shared waterways) 80% of Canadians live within 160 kilometers of the U.S. border 119 land border crossings between Canada and the U.S. Canada and the U.S. have the worlds largest trading relationship 28,000 trucks cross the border daily (2010) Approximately $2 billion in goods cross the Canada – U.S. border each day Almost $500 million in goods pass daily across the Ambassador Bridge between Windsor, Ontario, and Detroit, Michigan (busiest border crossing in North America)

26. 26 Beyond the Border:“A Shared Vision for Perimeter Security and Economic Competitiveness” The “Beyond the Border” Declaration was announced by Canadian Prime Minister Stephen Harper and U.S. President Barack Obama in February 2011 Four key principles underpinning the Declaration: Addressing threats early Trade facilitation, economic growth and jobs Integrated cross-border law enforcement; and Critical infrastructure and cyber security

27. 27 “Beyond the Border Action Plan” Key Initiatives: Expand and enhance the benefits of trusted traveller and trader programs Coordinate investments in infrastructure and technology Simplify business reporting requirements Eliminate duplicate inspections of cargo Improve our approach to identity management (e.g. entry / exit) Improve information sharing between governments Enhance screening of cargo and travellers at the perimeter to improve facilitation within Canada and the United States

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29. 29 Harmonization of PIP & C-TPAT A key initiative under harmonization involves the development of an interoperable web portal between Canada and the United States that will enable: Faster processing of Trusted Trader applicants Data sharing between the two programs More secure sensitive data storage A robust application process tracking

30. 30 Harmonization of PIP & C-TPAT Implementation: Phase 1: Pilot harmonization of two Canada - and two US-based highway carriers, completed in 2011 Phase 2: Harmonization of Canada and US highway carriers, scheduled for 2012 Phase 3: Harmonization of all other common lines of business, line by line

31. 31 Trusted Traders will continue to work on: PIP and C-TPAT harmonization Processes Policies / Procedures Systems Enhanced Program Benefits Ensuring a secure supply chain and promoting legitimate trade

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