IB
Union Calendar No. 233
115th CONGRESS
1st Session
H. R. 3551
[Report No. 115–323]
IN THE HOUSE OF REPRESENTATIVES
July 28, 2017
Ms. McSally (for herself, Mr. Reichert, Mr. McCaul, Mr. King of New York, Mr. Hurd, and Mr. Garrett) introduced the following bill; which was referred to the Committee on Homeland Security
September 25, 2017
Additional sponsor: Mr. Rutherford
September 25, 2017
Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed
Strike out all after the enacting clause and insert the part printed in italic
For text of introduced bill, see copy of bill as introduced on July 28, 2017
A BILL
To amend the Security and Accountability for Every Port Act of 2006 to reauthorize the Customs-Trade Partnership Against Terrorism Program, and for other purposes.
Short title
This Act may be cited as the C-TPAT Reauthorization Act of 2017
.
Customs-Trade Partnership Against Terrorism
In general
Subtitle B of title II of the Security and Accountability for Every Port Act of 2006 (6 U.S.C. 961 et seq.) is amended to read as follows:
Customs-Trade Partnership Against Terrorism
Establishment of the Customs-Trade Partnership Against Terrorism program
In general
There is established within U.S. Customs and Border Protection a voluntary government-private sector partnership program to be known as the Customs-Trade Partnership Against Terrorism (C–TPAT).
Purpose
The purposes of the C–TPAT program are to—
strengthen and improve the overall security of the international supply chain and United States border security;
facilitate the movement of secure cargo through the international supply chain;
ensure compliance with applicable law; and
serve as the Authorized Economic Operator program for the United States.
Director
There shall be at the head of the C–TPAT program a Director, who shall report to the Executive Assistant Commissioner of the Office of Field Operations (in this subtitle referred to as the Executive Assistant Commissioner
) of U.S. Customs and Border Protection.
Duties
The Director of the C–TPAT program shall—
oversee the activities of the C–TPAT program, including certification of C–TPAT participants;
evaluate and make revisions to security criteria pursuant to subsections (c) and (d) of section 213;
ensure that participants receive a tangible and measurable benefit for participation; and
carry out other duties and powers prescribed by the Executive Assistant Commissioner.
Eligible entities and notice of benefits
Eligible entities
Importers, exporters, customs brokers, forwarders, air, sea, and land carriers, contract logistics providers, and other entities in the international supply chain and intermodal transportation system are eligible to apply for participation in the C–TPAT program.
Tiered participation
In general
Applicants may be eligible to participate as Tier 1 or Tier 2 participants.
Importers
Importers may be eligible to participate as Tier 3 participants.
Extension
The Executive Assistant Commissioner may, in his or her discretion, extend Tier 3 participation to other entity types, if appropriate.
Notice of benefits
In general
The Commissioner of U.S. Customs and Border Protection shall publish, on the U.S. Customs and Border Protection website and through other appropriate online publication, information about benefits to C–TPAT program participants.
Changes
The Commissioner of U.S. Customs and Border Protection shall publish, on the U.S. Customs and Border Protection website and through other appropriate online publication, notice of any changes to benefits to C–TPAT program participants not later than 30 days before any such changes take effect.
Participation eligibility
In general
The Executive Assistant Commissioner shall review all documentation submitted by an applicant pursuant to subsection (b)(2), conduct a background investigation of such applicant, and vet such applicant.
General requirements
To be eligible for participation in the C–TPAT program, an entity shall, at a minimum—
have a designated company employee authorized to bind such entity that is a direct company employee and will serve as the primary point of contact responsible for participation of such entity in the C–TPAT program;
at the time of initial application and annually thereafter, including in advance of any recertification or revalidation, submit an international supply chain security profile, which shall identify how such entity meets the minimum security criteria of the C–TPAT program established by the Commissioner of U.S. Customs and Border Protection and how such entity will maintain and enhance internal policies, procedures, and practices related to international supply chain security; and
meet any specific requirements for eligible entities, as established by the Commissioner.
Minimum security criteria
The Commissioner of U.S. Customs and Border Protection shall establish minimum security criteria for participants in the C–TPAT program, review such minimum security criteria not less than once every two years, and update such minimum security criteria as necessary. Such minimum security criteria shall seek to address security vulnerabilities in the international supply chain.
Additional and updated criteria
The Commissioner of U.S. Customs and Border Protection may establish additional and updated security criteria for individual C–TPAT program participants, categories of C–TPAT program participants, or particular entity types to meet in order to address a security vulnerability in the international supply chain.
Consultation
When establishing or updating security criteria in accordance with subsection (c), and when establishing additional or updated security criteria in accordance subsection (d), the Commissioner of U.S. Customs and Border Protection shall consult with C–TPAT program participants and other interested parties, and shall—
conduct a cost benefit analysis of such proposed new, additional, or updated security criteria in consultation with the Commercial Customs Operations Advisory Committee established under section 109 of the Trade Facilitation and Trade Enforcement Act of 2015 (Public Law 114–125; 19 U.S.C. 4316);
determine operational feasibility and, where appropriate, conduct a phased implementation of such proposed additional or updated security criteria; and
provide C–TPAT program participants and other interested parties a 90-day comment period to review and comment on such proposed additional or updated security criteria.
Waiver
The Commissioner of U.S. Customs and Border Protection may waive the requirements of subsection (e) if the Commissioner determines there is a significant and imminent risk to the national security of the United States and such a waiver is necessary to protect such national security. Not later than 120 days after the issuance of any such waiver, the Commissioner shall announce on the U.S. Customs and Border Protection website and through other appropriate online publication the Commissioner’s intent to either withdraw such waiver or maintain such waiver while commencing efforts to establish minimum security criteria or establish additional or update existing security criteria in accordance with subsection (c) or (d), respectively.
Benefits for C–TPAT program participants
In general
The Executive Assistant Commissioner shall extend certain benefits to each C–TPAT program participant. Minimum benefits for each such participant shall include the following:
Assignment of a U.S. Customs and Border Protection Supply Chain Security Specialist.
Access to the C–TPAT program’s web-based Portal system and training materials.
A periodic and unclassified update on regional and other relevant threats to the international supply chain.
Public availability
The Executive Assistant Commissioner shall make publicly available on the C–TPAT portal an annual assessment of the tangible benefits being realized by C–TPAT program participants.
Annual assessment
The Executive Assistant Commissioner shall conduct, on an annual basis, an assessment of the benefits conferred to C-TPAT program participants. The Executive Assistant Commissioner shall determine a process to carry out such assessments, to include projected milestones and completion dates for addressing data reliability issues and, as necessary, correcting data weaknesses, so that U.S. Customs and Border Protection can produce accurate and reliable annual assessments that can be compared year-to-year.
Tier 1 participants
Certification
The Executive Assistant Commissioner shall certify the security measures and international supply chain security practices of all applicants to and participants in the C–TPAT program in accordance with section 213(b)(2) and the guidelines referred to in subsection (c) of this section. Certified participants shall be Tier 1 participants.
Benefits for Tier 1 participants
Upon completion of the certification under subsection (a), a C–TPAT program participant shall be certified as a Tier 1 participant. The Executive Assistant Commissioner shall extend limited benefits to a Tier 1 participant.
Guidelines
Not later than 180 days after the date of the enactment of this subtitle, the Commissioner of U.S. Customs and Border Protection shall update the guidelines and criteria for certifying a C–TPAT program participant’s security measures and supply chain security practices under this section. Such guidelines shall include a background investigation and review of appropriate documentation, as determined by the Commissioner.
Timeframe
To the extent practicable, the Executive Assistant Commissioner shall complete the Tier 1 certification process within 90 days of receipt of an application for participation in the C–TPAT program.
Tier 2 participants
Validation
The Executive Assistant Commissioner shall validate the security measures and international supply chain security practices of a Tier 1 C–TPAT program participant in accordance with the guidelines referred to in subsection (c) to validate such participant as a Tier 2 participant. Such validation shall include on-site assessments at appropriate foreign and domestic locations utilized by such Tier 1 participant in its international supply chain.
Benefits for Tier 2 participants
The Executive Assistant Commissioner, shall extend benefits to each C–TPAT participant that has been validated as a Tier 2 participant under this section. Such benefits may include the following:
Reduced scores in U.S. Customs and Border Protection’s Automated Targeting System.
Reduced number of security examinations by U.S. Customs and Border Protection.
Priority examinations of cargo.
Access to the Free and Secure Trade (FAST) Lanes at United States ports of entry.
Recognition as a trusted trade partner by foreign customs administrations that have signed Mutual Recognition Arrangements with U.S. Customs and Border Protection.
In the case of importers, eligibility to participate in the Importer Self-Assessment Program (ISA) or successor compliance program.
Guidelines
Not later than 180 days after the date of the enactment of this subtitle, the Commissioner shall develop a schedule and update the guidelines and criteria for validating a C–TPAT participant’s security measures and supply chain security practices under this section.
Timeframe
To the extent practicable, the Executive Assistant Commissioner shall complete the Tier 2 validation process for a C–TPAT program participant under this section within one year after certification of such participant as a Tier 1 participant.
Tier 3 participants
In general
The Commissioner shall establish a third tier of C–TPAT program participation that offers additional benefits to C–TPAT program participants that are importers or other entity types, in accordance with section 212(b), that demonstrate a sustained commitment to maintaining security measures and international supply chain security practices that exceed the guidelines established for validation as a Tier 2 participant in the C–TPAT program under section 216.
Best practices
The Executive Assistant Commissioner may designate a Tier 2 C–TPAT program participant as a Tier 3 participant based on a review of best practices in such participant’s international supply chain that reflect a continued approach to enhanced international supply chain security, including—
compliance with any additional or updated criteria established by the Commissioner of U.S. Customs and Border Protection under section 213(d) that exceed the guidelines established pursuant to section 216 for validating a C–TPAT program participant as a Tier 2 participant; and
any other factors that the Executive Assistant Commissioner determines appropriate.
Benefits for Tier 3 participants
The Executive Assistant Commissioner, in consultation with the Commercial Customs Operations Advisory Committee established under section 109 of the Trade Facilitation and Trade Enforcement Act of 2015 (Public Law 114–125; 19 U.S.C. 4316) and the National Maritime Security Advisory Committee established under section 70112 of title 46, United States Code, shall extend benefits to each C–TPAT program participant that has been validated as a Tier 3 participant under this section, which may include the following:
Further reduction in the number of examinations by U.S. Customs and Border Protection.
Front of the line inspections and examinations.
Exemption from Stratified Exams.
Shorter wait times at United States ports of entry.
Access to the Free and Secure Trade (FAST) Lanes at United States ports of entry.
Recognition as a trusted trade partner by foreign customs administrations that have signed Mutual Recognition Arrangements with U.S. Customs and Border Protection.
In the case of importers, eligibility to participate in the Importer Self-Assessment Program (ISA) or successor compliance program.
Consequences for lack of compliance
In general
If at any time the Executive Assistant Commissioner determines that a C–TPAT program participant’s security measures or international supply chain security practices fail to meet applicable requirements under this subtitle, the Executive Assistant Commissioner may deny such participant benefits otherwise made available pursuant to this subtitle, either in whole or in part. The Executive Assistant Commissioner shall develop procedures, in consultation with Commercial Customs Operations Advisory Committee, established under section 109 of the Trade Facilitation and Trade Enforcement Act of 2015 (Public Law 114–125; 19 U.S.C. 4316), that provide appropriate protections to C–TPAT program participants, including advance notice and an opportunity for such participants to provide additional information to U.S. Customs and Border Protection regarding any such alleged failure, before any of such benefits are withheld. Such procedures may not limit the ability of the Executive Assistant Commissioner to take actions to protect the national security of the United States.
False or misleading information; Lack of compliance with law
If a C–TPAT program participant knowingly provides false or misleading information to the Commissioner of U.S. Customs and Border Protection, the Executive Assistant Commissioner, or any other officers or officials of the United States Government, or if at any time the Executive Assistant Commissioner determines that a C–TPAT program participant has committed a serious violation of Federal law or customs regulations, or if a C–TPAT program participant has committed a criminal violation relating to the economic activity of such participant, the Executive Assistant Commissioner may suspend or expel such participant from the C–TPAT program for an appropriate period of time. The Executive Assistant Commissioner, after the completion of the process described in subsection (d), may publish in the Federal Register a list of C–TPAT program participants that have been so suspended or expelled from the C–TPAT program pursuant to this subsection.
National security
If at any time the Executive Assistant Commissioner determines that a C–TPAT program participant poses a significant and imminent risk to the national security of the United States or has committed a serious violation of Federal law or customs regulations, or if a C–TPAT program participant has committed a criminal violation relating to the economic activity of such participant, the Executive Assistant Commissioner may suspend or expel such participant from the C–TPAT program for an appropriate period of time. The Executive Assistant Commissioner, after the completion of the process described in subsection (d), may publish in the Federal Register a list of C–TPAT program participants that have been so suspended or expelled from the C–TPAT program pursuant to this subsection.
Right of appeal
In general
The Commissioner of U.S. Customs and Border Protection shall establish a process for a C–TPAT program participant to appeal a decision of the Executive Assistant Commissioner under subsection (a). Such appeal shall be filed with the Commissioner not later than 90 days after the date of such decision, and the Commissioner shall issue a determination not later than 90 days after such appeal is filed.
Appeals of other decisions
The Commissioner of U.S. Customs and Border Protection shall establish a process for a C–TPAT program participant to appeal a decision of the Executive Assistant Commissioner under subsections (b) and (c). Such appeal shall be filed with the Commissioner not later than 30 days after the date of such decision, and the Commissioner shall issue a determination not later than 90 days after such appeal is filed.
Validations by other DHS components
In general
The Commissioner of U.S. Customs and Border Protection may recognize regulatory inspections conducted by other components of the Department of Homeland Security of entities as sufficient to constitute validation for C–TPAT program participation in cases in which any such component’s inspection regime is harmonized with validation criteria for the C-TPAT program. Such regulatory inspections shall not limit the ability of U.S. Customs and Border Protection to conduct a C–TPAT program validation.
Revalidation
Nothing in this section may limit the Commissioner of U.S. Customs and Border Protection’s ability to require a revalidation by U.S. Customs and Border Protection.
Certification
Nothing in this section may be construed to authorize certifications of C–TPAT applicants to be performed by any party other than U.S. Customs and Border Protection.
Recertification and revalidation
Recertification
The Commissioner of U.S. Customs and Border Protection shall implement a recertification process for all C–TPAT program participants. Such process shall occur annually, and shall require—
a review of the security profile and supporting documentation to ensure adherence to the minimum security criteria under section 213; and
background checks and vetting.
Revalidation
The Commissioner of U.S. Customs and Border Protection shall implement a revalidation process for all Tier 2 and Tier 3 C–TPAT program participants. Such process shall require—
a framework based upon objective, risk based criteria for identifying participants for periodic revalidation at least once every four years following the initial validation of such participants;
on-site assessments at appropriate foreign and domestic locations utilized by such a participant in its international supply chain; and
an annual plan for revalidation that includes—
performance measures;
an assessment of the personnel needed to perform such revalidations; and
the number of participants that will be revalidated during the following year.
Revalidation under a Mutual Recognition Arrangement
In general
Upon request from the Commissioner of U.S. Customs and Border Protection, all Tier 2 and Tier 3 C–TPAT program participants shall provide any revalidation report conducted by a foreign government under a Mutual Recognition Arrangement.
Recognition
The Commissioner of U.S. Customs and Border Protection may recognize revalidations of entities conducted by foreign governments under a Mutual Recognition Arrangement as sufficient to constitute a revalidation for C–TPAT program participation under subsection (b).
No limitation
Nothing in this subsection may be construed to limit the Commissioner of U.S. Customs and Border Protection’s ability to require a revalidation by U.S. Customs and Border Protection.
Designated company employees
Only designated company employees of a C–TPAT program participant under section 213(b)(1) are authorized to respond to a revalidation report. Third-party entities are not authorized to respond to a revalidation report.
Noncontainerized cargo and third party logistics providers
The Commissioner of U.S. Customs and Border Protection shall consider the potential for participation in the C–TPAT program by importers of noncontainerized cargoes and non-asset-based third party logistics providers that otherwise meet the requirements under this subtitle.
Program management
In general
The Commissioner of U.S. Customs and Border Protection shall establish sufficient internal quality controls and record management, including recordkeeping (including maintenance of a record management system in accordance with subsection (b)) and monitoring staff hours, to support the management systems of the C–TPAT program. In managing the C–TPAT program, the Commissioner shall ensure that the C–TPAT program includes the following:
A 5-year plan to identify outcome-based goals and performance measures of the C–TPAT program.
An annual plan for each fiscal year designed to match available resources to the projected workload.
A standardized work program to be used by agency personnel to carry out the certifications, validations, recertifications, and revalidations of C–TPAT program participants.
In accordance with subsection (e), a standardized process for the Executive Assistant Commissioner to receive reports of suspicious activity, including reports regarding potentially compromised cargo or other border or national security concerns.
Documentation of reviews
In general
The Commissioner of U.S. Customs and Border Protection shall maintain a record management system to document determinations on the reviews of each C–TPAT program participant, including certifications, validations, recertifications, and revalidations.
Standardized procedures
To ensure accuracy and consistency within the record management system required under this subsection, the Commissioner shall develop, disseminate, and require utilization of standardized procedures for agency personnel carrying out certifications, validations, recertifications, and revalidations to report and track information regarding the status of each C-TPAT program participant.
Confidential information safeguards
In consultation with the Commercial Customs Operations Advisory Committee established under section 109 of the Trade Facilitation and Trade Enforcement Act of 2015 (Public Law 114–125; 19 U.S.C. 4316), the Commissioner of U.S. Customs and Border Protection 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, recertification, and revalidation processes.
Resource management staffing plan
The Commissioner of U.S. Customs and Border Protection shall—
develop a staffing plan to recruit and train staff (including a formalized training program) to meet the objectives identified in the 5-year strategic plan under subsection (a)(1); and
provide cross-training in post incident trade resumption for the C–TPAT Director and other relevant personnel who administer the C–TPAT program.
Engagement
In carrying out the standardized process required under subsection (a)(4), the Commissioner shall engage with and provide guidance to C-TPAT program participants and other appropriate stakeholders on submitting reports described in such subsection.
Report to Congress
In connection with the President’s annual budget submission for the Department of Homeland Security, the Commissioner of U.S. Customs and Border Protection shall report to the appropriate congressional committees on the progress made by the Commissioner to certify, validate, recertify, and revalidate C–TPAT program participants. Each such report shall be due on the same date that the President’s budget is submitted to Congress.
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Saving clause
In general
The amendments made by this Act shall take effect and apply beginning on the date that is 30 days after the date of the enactment of this Act with respect to applicants for participation in the C–TPAT program.
Exception
Paragraph (1) shall not apply in case of C–TPAT program participants who are such participants as of the date specified in such paragraph. Such participants shall be subject to the amendments made by this Act upon revalidation of such participants to participate in such program. Until such time, such participants shall be subject to the requirements of the C–TPAT program as in existence on the day before the date of the enactment of this Act.
Clerical amendments
The table of contents in section 1(b) of the Security and Accountability for Every Port Act of 2006 is amended by striking the items relating to subtitle B of title II and inserting the following new items:
Subtitle B—Customs-Trade Partnership Against Terrorism
Sec. 211. Establishment of the Customs-Trade Partnership Against Terrorism program.
Sec. 212. Eligible entities and notice of benefits.
Sec. 213. Participation eligibility.
Sec. 214. Benefits for C–TPAT program participants.
Sec. 215. Tier 1 participants.
Sec. 216. Tier 2 participants.
Sec. 217. Tier 3 participants.
Sec. 218. Consequences for lack of compliance.
Sec. 219. Validations by other DHS components.
Sec. 220. Recertification and revalidation.
Sec. 221. Noncontainerized cargo and third party logistics providers.
Sec. 222. Program management.
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September 25, 2017
Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed
