CBP Looking at Incorporating FTZ Program Into CTPAT

CBP will take a look at how it can bring foreign-trade zones into the Customs-Trade Partnership Against Terrorism, Thomas Overacker, CBP executive director-cargo and conveyance security, said April 28 during the virtual National Association of Foreign-Trade Zones spring seminar. “We've committed to explore how we can incorporate FTZs into the CTPAT program,” he said. “We've long considered the documentation and internal controls of your industry as best practices for security and supply chain integrity. It only makes sense that you receive the recognition that you deserve.”

Going forward, “the challenge will be developing FTZ-specific minimum security criteria” and finding mutually acceptable benefits, he said. On a broader level, CBP is working on addressing e-commerce through CTPAT, including how to “address new and different actors in the supply chain,” he said. A forced labor component within CTPAT is another area that CBP continues to work hard on (see 2102040052), Overacker said.

CBP is also in the process of finalizing guidance around storing goods within FTZs while awaiting a decision on whether the goods are subject to a withhold release order, said Jim Swanson, director of the Cargo and Security Controls Division at CBP's Office of Field Operations. Swanson plans to release the guidance to the NAFTZ for broader distribution, he said. The agency has been working on that guidance for several months (see 2102110018).

The guidelines will say the goods “must be fully segregated,” both physically and virtually within the inventory control system perspective, he said. “We want them clearly marked, segregated in your facility so that they can't inadvertently end up in commerce,” he said. Once CBP determines that forced labor is involved and issues a finding, the detention will become a seizure, he said. After that, the goods will no longer be eligible for exportation and must be destroyed “or otherwise disposed of as the government dictates,” he said.

The guidelines will also apply to bonded warehouses, Swanson said. “We are looking also at identifying WROs at the time of admission so that we can have a better flag earlier in the process, so that you'll know and we know, so that we can do better oversight,” he said.

After CBP clarified its policy for shipments of unsold merchandise entered under Section 321 exemptions and stored within fulfillment centers (see 2007310036), there was a “significant reduction” of about 30% overall of “ineligible shipments,” he said. Section 321 entries account for about 10% of total entries, or about 2 million per day, he said. “We're working our way through that, trying to whittle out those folks before we do heavy-duty enforcement. We will be shutting them off at some point if they don't comply.”