Home » Should you Join the U.S. CTPAT Trade Compliance Program?

Should you Join the U.S. CTPAT Trade Compliance Program?

by | Nov 11, 2022 | Blog Post

CTPAT Trade Compliance is the name for U.S. Customs and Border Protection’s (CBP’s) new, voluntary trade compliance program.  U.S. importers who are Tier II or Tier III members of the CTPAT supply chain security program can opt into the program by monitoring their own trade compliance.

Here’s a short video summarizing the program. The video features Dimerco’s trade compliance consultant, Karen Kenney. Continue reading beyond the video to get the more details.


What is Trade Compliance?

Trade compliance refers to a company’s obligation to meet the legal requirements for importing products into the U.S., administered by CBP and 47 other government entities. Check out our article: Global Trade Compliance: Understanding the Basics.

The CTPAT Trade Compliance Program is an extension of CBP’s long-standing CTPAT Security Program – a partnership between government and the shipping community that began in the aftermath of 9/11 to promote safe, secure supply chains.

CBP’s goal for the trade compliance program is to partner with importers who can demonstrate readiness to manage and monitor their own compliance.

In March 2020, the former Importer-Self Assessment (ISA) Program was integrated into CTPAT as CTPAT Trade Compliance, making CTPAT a comprehensive Authorized Economic Operator (AEO) Program, including both security and compliance components. The Trade Compliance Program was initially limited, and opened up to new applicants in August, 2022.


Why should an importer consider joining the CTPAT Trade Compliance Program?

The CTPAT Trade Compliance Program offers many benefits to importers who demonstrate a commitment to compliance:

  • Access to the Trade Compliance Portal and its resource materials
  • Protection from corporate identity theft through a notification and verification system
  • Enhanced Importer Trade Activity (ITRAC) access, including importing activity reports
  • Expedited treatment of ruling requests with “front-of-line” processing within 20 days
  • Opportunity to apply for coverage of multiple Importer of Record (IOR) numbers
  • A National Account Manager who acts as an advisor and liaison for you within CBP
  • In some cases, CBP will provide written notice of compliance issues and allow the importer 30 days to file a prior disclosure (does not apply when fraud is involved)
  • Removal from the Focused Assessment pool – importers may be subject to a single-issue audit to address a specific concern


How does an importer become eligible for the CTPAT Trade Compliance Program?

To be eligible, a company must be a current tier II or tier III member of CTPAT, be a U.S. or Canadian resident importer, have a minimum of 2 years import experience, and have no evidence of debts owed to CBP. If a CTPAT member meets the above requirements, they’ll receive notification of their eligibility within the CTPAT Portal.


How does an importer apply for the Trade Compliance Program?

If eligible, a company completes the CTPAT Trade Compliance Eligibility Questionnaire. This is the best way to determine if your company is ready for the program. If you answer “no” to any of the questions, your company has more work to do before joining. Once the Questionnaire is complete with all positive responses, the importer completes the CTPAT Trade Compliance Memorandum of Understanding (MOU) and submits its application to CBP.

The application review process includes an audit of the importer’s Customs entry activity, so companies should be certain they are ready before submitting the application. Many companies engage with their Customs broker or other external compliance resource to assist with an internal audit and gap analysis before moving forward.


After an importer becomes a member, how do they maintain program membership?

Once a member of the Trade Compliance Program, the importer must complete an Annual Notification Letter, which informs CBP of any changes to their business that may impact their Customs activities.


So, should I join?

Joining the CTPAT Trade Compliance program is a big step. To be successful in the program, companies must have deep, broad compliance and internal audit policies in place that are actively managed. In the latest roll-out of the program, CBP added requirements beyond the old ISA provisions, including restrictions on imports from companies that use forced labor. Applicants must be comfortable that their company is compliant in all these areas and have a tested self-assessment process in place. All of this requires a substantial investment of time by the importer.

Some in the trade believe the program doesn’t yet offer enough benefits to make the expense of the program worthwhile. Others see a real upside to one or more of the existing benefits, such as removal from the Focused Assessment pool, or Prior Disclosure notifications.

Ultimately, each importer must assess its own business to determine if the program can help their company. Consulting with your international Customs broker or other third-party compliance consultant can help you make the decision about whether the CTPAT Trade Compliance Program is right for you. Reach out today to talk to a Dimerco trade compliance specialist.