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International Trade

Rethinking CTPAT Benefits During COVID-19

Karen Lobdell  

· 5 minute read

Karen Lobdell  

· 5 minute read

As the coronavirus (COVID-19) continues to spread globally, our main objectives now are to help you and your businesses navigate this complicated and ever-changing environment. Click here to view our latest resources on COVID-19, created by our legal and tax experts to assist you as you prepare and respond to issues.

As the daily news has been overtaken by updates regarding the coronavirus pandemic, individuals and businesses have had to make numerous changes to not only prevent the spread of the virus but also ensure the economic stability of our global trading system.

Impacts on the supply chain are already being felt, and ongoing business interruptions will make it a challenge for even the most experienced trade compliance and supply chain professionals to maneuver. The results of a survey by the Institute of Supply Chain Management (ISM) of 600 members were released recently surrounding how supply chains are handling the coronavirus. The following results are concerning:

  • Almost 75% of the companies surveyed are experiencing supply chain disruptions in some capacity as a result of coronavirus-related transportation restrictions
  • Of the companies expecting supply chain impacts, the severity anticipated increases after the first quarter of 2020
  • Six in 10 (62%) respondents are experiencing delays in receiving orders from China
  • More than 80% believe that their organization will experience some impact because of COVID-19 disruptions

For the majority of US businesses, lead times have doubled, and that is compounded by the shortage of air and ocean capacity to move goods. With this in mind, it’s a good idea to revisit the tools available for global traders to help manage and mitigate this risk.

How companies are benefiting from the CTPAT program in times of great disruption  

It is likely that over the past years, more than a few companies have questioned the worth of their participation in programs like US CBP Customs Trade Partnership Against Terrorism. The CTPAT program has been undergoing updates to the minimum-security criteria (MSC), alterations to the Portal, and changes in leadership that resulted in uncertainty over the program value and return on investment. However, this current pandemic is exactly why companies should participate. Although there are certainly some program benefits that can be enjoyed in even the best of times, there are a few additional ones that can be advantageous in times like this. These benefits include:

  • Business resumption priority following a natural disaster or terrorist attack
  • Reduced number of CBP examinations
  • Front of the line inspections
  • Possible exemption from Stratified Exams
  • Shorter wait times at the border
  • Assignment of a Supply Chain Security Specialist to the company
  • Access to the Free and Secure Trade (FAST) Lanes at the land borders
  • Possibility of enjoying additional benefits by being recognized as a trusted trade partner by foreign customs administrations that have signed Mutual Recognition with the United States
  • Priority consideration at CBP’s industry-focused Centers of Excellence and Expertise

CTPAT members are considered low risk and therefore are less likely to experience delays at the border. Additionally, this status can be enjoyed by foreign customs administrations where CBP has established Mutual Recognition. In a recent call with the trade regarding the coronavirus, CBP made it clear that ports/borders could experience delays during this time – this could be the result of CBP officer bandwidth to process entries (due to illness), as well as governments taking stronger measures to secure their borders and control the virus. CTPAT members will be given priority treatment, which will assist in keeping their supply chains fluid.

The CTPAT program requirements also include measures compelling member companies to map their supply chains in addition to conducting vulnerability assessments on their own company as well as their business partners. These requirements not only assist in building a more secure and resilient supply chain, but also provide a level of visibility that will be incredibly valuable in times like this.

Although managing a program like CTPAT can seem like a daunting task – especially for large companies with extensive supplier bases or smaller companies with limited resources – there are automated tools that can make the job easier, provide a robust method to stay on top of the ever-changing risk landscape, and position users to enjoy the benefits of the program.

Thomson Reuters ONESOURCE Supply Chain Compliance  is an integrated offering that increases visibility, manages compliance, and mitigates risks across the supply chain. Reduce the time involved in meeting the CTPAT requirements of CBP’s recommended 5-Step Risk Assessment Process, including conducting vulnerability assessments of business partners, implementing corrective actions, and conducting threat assessments.

For more information on ONESOURCE Supply Chain Compliance and other risk assessment management solutions, visit ONESOURCE Global Trade.

Register for our free webinar on the impact of coronavirus on global supply chains

For more information on coronavirus and its effect on global trade, please register for our free webinar, “The Impact of COVID-19 on the Global Supply Chain.” In a roundtable format, you will hear from several Thomson Reuters trade experts and clients as they discuss the latest developments with COVID-19 and share their insight into how multinationals are adapting to the changing landscape.

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