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115th Congress } { REPORT
HOUSE OF REPRESENTATIVES
1st Session } { 115-323
======================================================================
C-TPAT REAUTHORIZATION ACT OF 2017
_______
September 25, 2017.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. McCaul, from the Committee on Homeland Security, submitted the
following
R E P O R T
[To accompany H.R. 3551]
[Including cost estimate of the Congressional Budget Office]
The Committee on Homeland Security, to whom was referred
the bill (H.R. 3551) 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,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 8
Background and Need for Legislation.............................. 8
Hearings......................................................... 8
Committee Consideration.......................................... 8
Committee Votes.................................................. 9
Committee Oversight Findings..................................... 9
New Budget Authority, Entitlement Authority, and Tax Expenditures 9
Congressional Budget Office Estimate............................. 9
Statement of General Performance Goals and Objectives............ 10
Duplicative Federal Programs..................................... 11
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits....................................................... 11
Federal Mandates Statement....................................... 11
Preemption Clarification......................................... 11
Disclosure of Directed Rule Makings.............................. 11
Advisory Committee Statement..................................... 11
Applicability to Legislative Branch.............................. 11
Section-by-Section Analysis of the Legislation................... 11
Changes in Existing Law Made by the Bill, as Reported............ 18
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``C-TPAT Reauthorization Act of 2017''.
SEC. 2. CUSTOMS-TRADE PARTNERSHIP AGAINST TERRORISM.
(a) 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:
``Subtitle B--Customs-Trade Partnership Against Terrorism
``SEC. 211. ESTABLISHMENT OF THE CUSTOMS-TRADE PARTNERSHIP AGAINST
TERRORISM PROGRAM.
``(a) 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).
``(b) Purpose.--The purposes of the C-TPAT program are to--
``(1) strengthen and improve the overall security of the
international supply chain and United States border security;
``(2) facilitate the movement of secure cargo through the
international supply chain;
``(3) ensure compliance with applicable law; and
``(4) serve as the Authorized Economic Operator program for
the United States.
``(c) 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.
``(d) Duties.--The Director of the C-TPAT program shall--
``(1) oversee the activities of the C-TPAT program, including
certification of C-TPAT participants;
``(2) evaluate and make revisions to security criteria
pursuant to subsections (c) and (d) of section 213;
``(3) ensure that participants receive a tangible and
measurable benefit for participation; and
``(4) carry out other duties and powers prescribed by the
Executive Assistant Commissioner.
``SEC. 212. ELIGIBLE ENTITIES AND NOTICE OF BENEFITS.
``(a) 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.
``(b) Tiered Participation.--
``(1) In general.--Applicants may be eligible to participate
as Tier 1 or Tier 2 participants.
``(2) Importers.--Importers may be eligible to participate as
Tier 3 participants.
``(3) Extension.--The Executive Assistant Commissioner may,
in his or her discretion, extend Tier 3 participation to other
entity types, if appropriate.
``(c) Notice of Benefits.--
``(1) 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.
``(2) 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.
``SEC. 213. PARTICIPATION ELIGIBILITY.
``(a) 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.
``(b) General Requirements.--To be eligible for participation in the
C-TPAT program, an entity shall, at a minimum--
``(1) 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;
``(2) 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
``(3) meet any specific requirements for eligible entities,
as established by the Commissioner.
``(c) 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.
``(d) 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.
``(e) 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--
``(1) 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);
``(2) determine operational feasibility and, where
appropriate, conduct a phased implementation of such proposed
additional or updated security criteria; and
``(3) 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.
``(f) 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.
``SEC. 214. BENEFITS FOR C-TPAT PROGRAM PARTICIPANTS.
``(a) 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:
``(1) Assignment of a U.S. Customs and Border Protection
Supply Chain Security Specialist.
``(2) Access to the C-TPAT program's web-based Portal system
and training materials.
``(3) A periodic and unclassified update on regional and
other relevant threats to the international supply chain.
``(b) 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.
``(c) 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.
``SEC. 215. TIER 1 PARTICIPANTS.
``(a) 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.
``(b) 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.
``(c) 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.
``(d) 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.
``SEC. 216. TIER 2 PARTICIPANTS.
``(a) 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.
``(b) 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:
``(1) Reduced scores in U.S. Customs and Border Protection's
Automated Targeting System.
``(2) Reduced number of security examinations by U.S. Customs
and Border Protection.
``(3) Priority examinations of cargo.
``(4) Access to the Free and Secure Trade (FAST) Lanes at
United States ports of entry.
``(5) Recognition as a trusted trade partner by foreign
customs administrations that have signed Mutual Recognition
Arrangements with U.S. Customs and Border Protection.
``(6) In the case of importers, eligibility to participate in
the Importer Self-Assessment Program (ISA) or successor
compliance program.
``(c) 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.
``(d) 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.
``SEC. 217. TIER 3 PARTICIPANTS.
``(a) 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.
``(b) 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--
``(1) 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
``(2) any other factors that the Executive Assistant
Commissioner determines appropriate.
``(c) 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:
``(1) Further reduction in the number of examinations by U.S.
Customs and Border Protection.
``(2) Front of the line inspections and examinations.
``(3) Exemption from Stratified Exams.
``(4) Shorter wait times at United States ports of entry.
``(5) Access to the Free and Secure Trade (FAST) Lanes at
United States ports of entry.
``(6) Recognition as a trusted trade partner by foreign
customs administrations that have signed Mutual Recognition
Arrangements with U.S. Customs and Border Protection.
``(7) In the case of importers, eligibility to participate in
the Importer Self-Assessment Program (ISA) or successor
compliance program.
``SEC. 218. CONSEQUENCES FOR LACK OF COMPLIANCE.
``(a) 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.
``(b) 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.
``(c) 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.
``(d) Right of Appeal.--
``(1) 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.
``(2) 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.
``SEC. 219. VALIDATIONS BY OTHER DHS COMPONENTS.
``(a) 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.
``(b) 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.
``(c) 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.
``SEC. 220. RECERTIFICATION AND REVALIDATION.
``(a) 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--
``(1) a review of the security profile and supporting
documentation to ensure adherence to the minimum security
criteria under section 213; and
``(2) background checks and vetting.
``(b) 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--
``(1) 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;
``(2) on-site assessments at appropriate foreign and domestic
locations utilized by such a participant in its international
supply chain; and
``(3) an annual plan for revalidation that includes--
``(A) performance measures;
``(B) an assessment of the personnel needed to
perform such revalidations; and
``(C) the number of participants that will be
revalidated during the following year.
``(c) Revalidation Under a Mutual Recognition Arrangement.--
``(1) 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.
``(2) 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).
``(3) 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.
``(d) 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.
``SEC. 221. 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.
``SEC. 222. PROGRAM MANAGEMENT.
``(a) 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:
``(1) A 5-year plan to identify outcome-based goals and
performance measures of the C-TPAT program.
``(2) An annual plan for each fiscal year designed to match
available resources to the projected workload.
``(3) A standardized work program to be used by agency
personnel to carry out the certifications, validations,
recertifications, and revalidations of C-TPAT program
participants.
``(4) 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.
``(b) Documentation of Reviews.--
``(1) 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.
``(2) 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.
``(c) 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.
``(d) Resource Management Staffing Plan.--The Commissioner of U.S.
Customs and Border Protection shall--
``(1) 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
``(2) provide cross-training in post incident trade
resumption for the C-TPAT Director and other relevant personnel
who administer the C-TPAT program.
``(e) 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.
``(f) 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.''.
(b) Saving Clause.--
(1) 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.
(2) 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.
(c) 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.''.
Purpose and Summary
H.R. 3551 reauthorizes the original Customs Trade
Partnership Against Terrorism (C-TPAT) program to reflect
current industry practices and threats to the global supply
chain. This bill increases security partnerships with private
industry by mandating that U.S. Customs and Border Protection
(CBP) liaise with industry when implementing new or updated
security criteria for participation. Moreover, this legislation
codifies tangible and specific benefits to all participants at
various stages of the CBP vetting and validation process, such
as ensuring shorter wait times and fewer inspections at ports
of entry in exchange for increasing security measures.
Background and Need for Legislation
Established under the SAFE Port Act of 2006 (Pub. L. 109-
347), C-TPAT is CBP's flagship global supply chain security
program.
When a participant joins C-TPAT, they agree to work with
CBP to protect the supply chain, identify security gaps, and
implement specific security measures and best practices.
Applicants must enhance security throughout their supply chain.
Applicants undergo vetting by CBP and then a site visit to
validate the implementation of security criteria in order to
receive benefits, such as shorter wait times and fewer
inspections at ports of entry.
This bill reauthorizes the program for the first time in 11
years to ensure that the program is ready to meet the dynamic
threats currently facing the global supply chain, and that C-
TPAT participants receive tangible benefits for their
partnership with CBP working toward a more secure supply chain.
Hearings
No hearings were held on H.R. 3551 in the 115th Congress.
Committee Consideration
The Committee met on September 7, 2017, to consider H.R.
3551, and ordered the measure to be reported to the House with
a favorable recommendation, as amended, by voice vote. The
Committee took the following actions:
The following amendments were offered:
An Amendment in the Nature of a Substitute offered by Ms.
McSally (#1); was AGREED TO, as amended, by voice vote.
An en bloc amendment to the Amendment in the Nature of a
Substitute offered by Ms. Barragan (#1A); was AGREED TO by
voice vote.
Consisting of the following amendments:
Page 9, line 17, strike ``Agreements'' and insert
``Arrangements''.
Page 9, line 21, insert ``, or successor compliance program''
before the period.
Page 12, line 5, strike ``Agreements'' and insert
``Arrangements''.
Page 12, line 14, strike ``any of the'' and insert ``applicable''.
Page 13, line 2, strike ``revoked'' and insert ``withheld''.
Page 15, line 16, insert ``, where such component's inspection
regime is harmonized with validation criteria for the C-TPAT program''
before the period.
Page 19, beginning line 8, insert the following: ``(4) 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. In carrying out this process, the Commissioner shall engage
with and provide guidance to C-TPAT program participants and other
appropriate stakeholders on submitting such reports.''.
Page 19, line 13, insert the following after the period: ``To
ensure accuracy and consistency within such record management system,
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.''.
An en bloc amendment to the Amendment in the Nature of a
Substitute offered by Mr. Correa (#1B); was AGREED TO by voice
vote.
Consisting of the following amendments:
Page 3, line 22, strike ``or'' and insert ``and''.
Page 4, line 3, strike ``or'' and insert ``and''.
Page 5, line 13, strike ``each year'' and insert ``every two
years''.
Page 6, line 13, insert ``, where appropriate,'' after ``and''.
Page 6, line 25, insert before the period the following: ``, but
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''.
Page 7, beginning line 5, strike ``all such participants'' and
insert ``each such participant''.
Page 7, beginning line 8, strike ``to each participant''.
Page 7, line 13, insert ``regional and other relevant'' before
``threats''.
Page 7, beginning line 18, insert the fa new subsection entitled
"(c) Annual Assessment.''
Committee Votes
Clause 3(b) of Rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto.
No recorded votes were requested during consideration of
H.R. 3559.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of Rule XIII of the Rules of the
House of Representatives, the Committee has held oversight
hearings and made findings that are reflected in this report.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of Rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
3551, the C-TPAT Reauthorization Act of 2017, would result in
no new or increased budget authority, entitlement authority, or
tax expenditures or revenues.
Congressional Budget Office Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 22, 2017.
Hon. Michael McCaul,
Chairman, Committee on Homeland Security,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3551, the C-TPAT
Reauthorization Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark
Grabowicz.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 3551--C-TPAT Reauthorization Act of 2017
Customs and Border Protection (CBP) in the Department of
Homeland Security administers the Customs-Trade Partnership
Against Terrorism (C-TPAT), a voluntary program that encourages
entities involved in international trade to cooperate with CBP
to strengthen international supply chains, improve border
security, and facilitate the movement of secure cargo through
the supply chain. H.R. 3551 would make several changes to the
C-TPAT program, mostly related to the benefits provided to
program participants such as importers and customs brokers. The
authorization of appropriations for the program expired in
2010. For fiscal year 2017, the Congress provided about $39
million to operate the program.
Based on an analysis of information from CBP, CBO estimates
that implementing the bill would not significantly affect the
cost to continue C-TPAT operations in future years at the 2017
level.
Enacting H.R. 3551 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting H.R. 3551 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
H.R. 3551 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act and would not affect the
budgets of state, local, or tribal governments.
The CBO staff contact for this estimate is Mark Grabowicz.
The estimate was approved by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of Rule XIII of the Rules of the
House of Representatives, H.R. 3551 contains the following
general performance goals and objectives, including outcome
related goals and objectives authorized.
The general performance goals and objectives of H.R. 3551
are to reauthorize and update the current C-TPAT program to
meet the dynamic threats of the global supply chain by
codifying the current processes of the matured program, while
providing industry tangible benefits for participation.
Duplicative Federal Programs
Pursuant to clause 3(c) of Rule XIII, the Committee finds
that H.R. 3551 does not contain any provision that establishes
or reauthorizes a program known to be duplicative of another
Federal program.
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
In compliance with Rule XXI of the Rules of the House of
Representatives, this bill, as reported, contains no
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of the Rule
XXI.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Preemption Clarification
In compliance with section 423 of the Congressional Budget
Act of 1974, requiring the report of any Committee on a bill or
joint resolution to include a statement on the extent to which
the bill or joint resolution is intended to preempt State,
local, or Tribal law, the Committee finds that H.R. 3551 does
not preempt any State, local, or Tribal law.
Disclosure of Directed Rule Makings
The Committee estimates that H.R. 3551 would require no
directed rule makings.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short Title.
This section provides that this bill may be cited as the
``C-TPAT Reauthorization Act of 2017''.
Sec. 2. Customs-Trade Partnership Against Terrorism.
This section amends Subtitle B of title II of the Security
and Accountability for Every Port Act of 2006 to include the
following:
Sec. 211. Establishment of the Customs-Trade Partnership
Against Terrorism Program.
This section establishes C-TPAT to strengthen and improve
the overall security of the international supply chain and
United States border security while expediting the flow of
secure cargo through the international supply chain.
Additionally, this section establishes the formal duties of
the Director and makes C-TPAT the Authorized Economic Operator
(AEO) for the United States. The Director shall report to the
Executive Assistant Commissioner (EAC) of the Office of Field
Operations and oversee the activities of the C-TPAT program.
The Director is also responsible for establishing the minimum-
security criteria necessary for participation and ensure that
participants receive tangible benefits for participation in the
program.
The Committee believes that the C-TPAT program should have
a formal Director who is given appropriate authority to
effectively manage the program, establish and implement
necessary security criteria, conduct oversight of participants,
and ensure that participants are receiving tangible benefits.
The Committee strongly believes that C-TPAT must be a true
security partnership between private industry and CBP.
Additionally, it is critical that C-TPAT be designated as the
AEO for the United States to give CBP the ability to grow their
trusted trader program with both a security and customs
compliance element, similar to other international programs.
Sec. 212. Eligible Entities and Notice of Benefits.
This section lists the entities that are eligible for C-
TPAT participation. Those entities are importers, exporters,
customs brokers, forwarders, air, sea, and land carriers, and
contract logistics providers.
Additionally, this section establishes the tiered system of
benefits into which C-TPAT participants fall based on their
adherence to security requirements, and directs the
Commissioner of CBP to publish the benefits available to C-TPAT
participants on the CBP website as well as notice any changes
to benefits not later than 30 days after they take effect.
The Committee believes that C-TPAT is a highly effective
and widely recognized cargo security program that greatly
increases both the security and efficiency of the international
supply chain. As such, as many entities as possible should be
eligible for participation in C-TPAT so long as they can make
valuable contributions to the security of the international
supply chain.
In exchange for implementing security criteria, the
Committee believes that participants must receive a measurable
reduction in wait times, inspections, or other benefits and
that CBP be as transparent as possible about any changes to
benefits.
Sec. 213. Participation Eligibility.
In order to participate in C-TPAT, each eligible entity
must have a designated company employee who will serve as the
liaison between CBP and the entity and act as the primary cargo
security officer. Each entity must also submit an international
supply chain security profile at the time of the initial
application to C-TPAT, and annually thereafter, to be vetted by
CBP.
This section also directs the Commissioner to establish
minimum security criteria that each C-TPAT participant will
have to implement to receive benefits. The criteria must be
reviewed at least once every 2 years by CBP, and prior to
establishing, updating, or adding minimum-security criteria,
CBP must:
Conduct a cost-benefit analysis with the Commercial
Customs Operations Advisory Committee;
Determine operational feasibility and conduct a phased
implementation; and
Provide C-TPAT participants a 90-day comment period.
The Committee is concerned that under prior law, third-
party security consultants could sign a certification,
validation, recertification, or revalidation report from CBP
and manage a company's participation in the program. The
Committee believes that a participant must be held solely
accountable for implementing their security criteria and
managing their participation in the C-TPAT program. In order to
accomplish this, the Committee believes that it is critical
that each participant have a designated employee that is not a
third-party consultant or contractor, to bind the company in
any agreement with CBP and hold the participant directly
accountable for the management of their C-TPAT participation.
Such employee need not be an officer of a participating
company, only an employee empowered to act on the company's
behalf for the purposes of the CTPAT program.
Additionally, the Committee believes that when implementing
new, additional, or updated security criteria, CBP must do so
judiciously and have an open dialog with private industry given
the potential economic cost for participants when implementing
various security measures mandated by CBP.
The Committee believes that the waiver provided in section
213 is limited both temporally and in scope, and may only be
used under extraordinary circumstances that constitute, ``a
significant and imminent risk to national security of the
United States.'' Further, the Committee included the
requirement that, not later than 120 days after the issuance of
such a waiver, the Commissioner must inform stakeholders on
whether conditions have changed and the waiver is no longer
necessary or maintain the waiver and begin the process of
engaging with stakeholders about revisions to security
criteria. This notification requirement seeks to maintain CBP's
flexibility to address urgent threats while preserving the
integrity of the consultation process that is at the heart of
this public-private program.
Sec. 214. Benefits for C-TPAT Program Participants.
This section directs the Commissioner to extend a minimum
set of tangible benefits to those who choose to participate in
C-TPAT by providing all participants access to a CBP Supply
Chain Security Specialist, access to the C-TPAT web based
portal, and a periodic update on threats to the global supply
chain.
The Committee believes that certain benefits must confer to
all C-TPAT participants regardless of tier status in order to
effectively manage the program and foster the security
partnership between private industry and CBP.
Moreover, because the Committee believes that private
entities that voluntarily participate in this program, in
particular those that opt to exceed minimum security
requirements, should realize tangible benefits, the Committee
also believes that CBP must develop a process to maintain
reliable data about the benefits conferred to participants.
Early in 2017, the Government Accountability Office found that
CBP's data was not sufficiently consistent or reliable to track
and measure participant benefits. For this reason, this section
requires CBP to address data reliability issues and assess on
an annual basis the benefits conferred to C-TPAT participants.
Sec. 215. Tier 1 Participants.
This section establishes the first of three tiers of
benefits for C-TPAT participants. Tier 1 participants are those
who have completed the application process for C-TPAT and have
passed the CBP vetting process and background checks, but have
not had a site visit from CBP. This is known as
``certification.'' Tier 1 participants receive limited benefits
since CBP has not had the opportunity to conduct a thorough
site visit. The Commissioner is directed to complete the
vetting process and background checks within 90 days of
receiving an application to participate in C-TPAT.
The Committee believes that those participants who have not
yet had a site visit from CBP should be given limited benefits
until a site visit validation is conducted. Further, the
Committee believes that CBP must move expeditiously to complete
such site visits so that participants can be eligible for more
substantial benefits outlined in the subsequent provisions.
Sec. 216. Tier 2 Participants.
This section establishes the process for becoming a Tier 2
participant and the associated benefits. A participant becomes
Tier 2 after completing the Tier 1 ``certification'' process of
being vetted and after successfully passing a site visit
conducted by CBP on all domestic and international locations
utilized by the participant. This site visit process is known
as ``validation.''
Tier 2 benefits include:
Reduced scores in CBP's Automated Targeting System;
Reduced number of examinations of cargo;
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 CBP; and
Eligibility to participate in the Importer Self-
Assessment Program (ISA) or future compliance programs.
The Commissioner is directed to complete the Tier 2 site
visit known as ``validation'' no later than 1 year after the
initial ``certification'' as a Tier 1 participant.
The Committee believes that participants who have had a
site visit validation from CBP have been thoroughly vetted by
CBP and should be eligible for tangible and measurable benefits
that have a positive impact on their ability to move cargo more
expeditiously through the international supply chain.
Sec. 217. Tier 3 Participants.
This section establishes the highest tier of C-TPAT
participation for entities who have demonstrated a consistent,
and innovative approach to upholding the highest levels of
security in their international supply chain. Benefits for Tier
3 participants include:
Further reduction in the number of examinations by CBP;
Front of the line secondary 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 CBP;
Eligibility for other U.S. Government pilot programs,
such as the Food and Drug Administration's Secure
Supply Chain program; and
Eligibility to participate in the Importer Self-
Assessment Program (ISA), or future compliance program.
The Committee believes that the most generous set of
benefits, outlined in this section, should be reserved for
those participants who have demonstrated a sustained commitment
to the security of their supply chain and seek innovative ways
to continually improve their security posture.
Sec. 218. Consequences For Lack of Compliance.
This section allows the EAC to deny benefits to a
participant for failing to uphold the integrity of the security
of their international supply chain or meet the minimum-
security criteria. Prior to denying benefits, the EAC must
develop procedures in consultation with the Commercial Customs
Advisory Committee that provide appropriate protections to
participants, give advance notice to the participant, and allow
the participant to submit additional or mitigating information
to CBP.
Additionally, if a participant knowingly submits false or
misleading information to CBP or fails to comply with the law,
the EAC may expel or suspend the participant from C-TPAT for as
long as deemed necessary. The EAC may also suspend or expel a
participant from C-TPAT if the EAC determines that the
participant poses an imminent threat to the national security
of the United States.
Participants have the right to appeal the decision of the
EAC to the Commissioner not later than 90 days after a decision
and the Commissioner must issue a determination on the appeal
no later than 90 days after the appeal is filed.
The Committee believes that C-TPAT participation is a
privilege and that if a participant fails to comply with an
agreement pursuant to this Act, that CBP retains the right to
withhold benefits or expel a participant until they meet the
standards of the program. Additionally, expulsion from the
program should generally be reserved for participants who
knowingly attempt to mislead or provide false information to
CBP in order to gain, or continue to enjoy, C-TPAT benefits.
However, the withholding of benefits or expulsion from the
program carry real economic consequences for participants,
therefore, participants must also be afforded adequate due
process. This includes the ability to repeal the decision of
the EAC in a timely manner and provide mitigating or
information to CBP in the course of the proceedings.
The Committee recognizes that C-TPAT is a voluntary program
and appreciates those partners willing to be certified and
validated in order to help secure the global supply chain.
However, the Committee strongly believes that expulsion from
the program should only take place for ``serious violations,''
or other criminal activity. The publication of the names of
companies that are suspended or expelled from the program in
the Federal Register, as is CBP's current practice, may have
economic and reputational ramifications. The Committee strongly
believes that CBP should not publish suspended participants
until the 90-day process outlined in subsection (d) has been
completed. As such, the Committee encourages CBP to be
judicious in its use of the authority provided in this section.
Sec. 219. Validations By Other DHS Components.
This section allows other components of DHS to complete the
validation site visits but gives CBP the authority to conduct
its own validation site visit if deemed necessary. Other
components of DHS are not permitted to conduct the
certification vetting and background checks associated with an
initial application to C-TPAT.
The Committee believes that other DHS components who
conduct inspections based on a similar security regimes to C-
TPAT should be leveraged to decrease the workload of CBP
validation site visits if another component is already
conducting a site visit inspection for a similar regulatory
program. For example, the Committee believes that the Maritime
Transportation Security Act (MTSA) facility inspection
conducted by the United States Coast Guard could be sufficient
to constitute a validation for C-TPAT participation as both a
C-TPAT validation by CBP and a MSTA inspection conducted by the
Coast Guard assess the security measures implemented by a
facility.
Although the Committee intends this provision as a means to
reduce duplicative inspections of the same facility, the
Committee strongly believes that CBP retains the responsibility
for conducting the initial background checks and vetting
associated with C-TPAT certification. Moreover, CBP can and
should continue to validate program participants, if for any
reason, another inspection regime with the Department is not
harmonized with the requirements of the C-TPAT program.
Sec. 220. Recertification and Revalidation.
This section establishes procedures for the recertification
and revalidation of C-TPAT participants. Participants must be
recertified annually by having their security profile reviewed
by CBP and undergoing recurring background checks and vetting.
Participants must be revalidated every 4 years.
Revalidation must include an onsite assessment at appropriate
foreign and domestic locations in a participant's international
supply chain. These site visits should be prioritized by risk
based factors such as volume of trade, origin, route, and
commodity The Commissioner must develop an annual plan for
revalidation that includes an assessment of the number of CBP
personnel needed to complete the revalidations, performance
measures, and the number of participants that will be
revalidated during the following year.
Revalidations conducted by a foreign government under a
Mutual Recognition Arrangement may satisfy the requirement for
a CBP revalidation every 4 years.
The Committee believes that regular follow-up site visits
are critical to ensuring that participants are implementing
security measures correctly and that CBP must establish a
viable plan to complete revalidations for thousands of
participants with supply chain locations around the globe.
Additionally, the Committee believes that CBP can reduce this
workload by leveraging site visits conducted by foreign
governments who are already partnering with the United States
under comparable supply chain security programs.
Sec. 221. Noncontainerized Cargo and Third Party
Logistics Providers.
This section directs the Commissioner to consider the
participation of importers of noncontainerized cargo and non-
asset-based third party logistic providers in C-TPAT.
The Committee believes that C-TPAT participation should be
available to as many supply chain entities as possible,
provided they can contribute to the security of the
international supply chain and meet the requirements of the
program. As such, the Committee intends for CBP to consider the
participation of noncontainerized cargo and non-asset based,
third-party logistics providers as eligible entities if they
demonstrate that they can make valuable contributions to the
security of the international supply chain and comply with the
requirements of this Act. The Committee expects such
consideration will result in the addition of participants in
these categories.
Sec. 222. Program Management.
This section directs the Commissioner to establish
sufficient internal quality controls and records management for
the C-TPAT program. The program must include:
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;
Additionally, the Commissioner must develop a staffing
plan to recruit and train staff to meet the needs of
the 5-year plan and provide cross-training in post-
incident trade resumption for the C-TPAT director and
other staff who administer the C-TPAT program;
The Commissioner must report to the appropriate
congressional Committees on the progress made to
certify, validate, recertify, and revalidate
participants. This report is due the same date the
President submits the budget to Congress; and
A standardized process for the EAC to receive reports
of suspicious activity, to include reports of
potentially compromised cargo or other national
security concerns, as well as the requisite outreach
and guidance to program participants and stakeholder on
how to submit these types of reports.
The Committee believes that the management of the C-TPAT
program is incredibly complex given the variety of
international supply chain locations, entity types, and sheer
number of participants. Given the national security
ramifications of program mismanagement, CBP must have a viable
plan to sustain the C-TPAT program and ensure its employees are
well trained and that the security standards of the program are
being upheld by participants in accordance with this Act. The
Committee believes that the broad latitude given to CBP to
manage the program must be accompanied by an appropriate level
of congressional oversight.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
SECURITY AND ACCOUNTABILITY FOR EVERY PORT ACT OF 2006
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Security and
Accountability For Every Port Act of 2006'' or the ``SAFE Port
Act''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--SECURITY OF UNITED STATES SEAPORTS
Subtitle A--General Provisions
Sec. 101. Area Maritime Transportation Security Plan to include salvage
response plan.
Sec. 102. Requirements relating to maritime facility security plans.
Sec. 103. Unannounced inspections of maritime facilities.
Sec. 104. Transportation security card.
Sec. 105. Study to identify redundant background records checks.
Sec. 106. Prohibition of issuance of transportation security cards to
persons convicted of certain felonies.
Sec. 107. Long-range vessel tracking.
Sec. 108. Establishment of interagency operational centers for port
security.
Sec. 109. Notice of arrival for foreign vessels on the Outer Continental
Shelf.
Sec. 110. Enhanced crewmember identification.
Subtitle B--Port Security Grants; Training and Exercise Programs
Sec. 111. Risk assessment tool.
Sec. 112. Port security grants.
Sec. 113. Port Security Training Program.
Sec. 114. Port Security Exercise Program.
Sec. 115. Facility exercise requirements.
Subtitle C--Port Operations
Sec. 121. Domestic radiation detection and imaging.
Sec. 122. Inspection of car ferries entering from abroad.
Sec. 123. Random searches of containers.
Sec. 124. Work stoppages and employee-employer disputes.
Sec. 125. Threat assessment screening of port truck drivers.
Sec. 126. Border Patrol unit for United States Virgin Islands.
Sec. 127. Report on arrival and departure manifests for certain
commercial vessels in the United States Virgin Islands.
Sec. 128. Center of Excellence for Maritime Domain Awareness.
TITLE II--SECURITY OF THE INTERNATIONAL SUPPLY CHAIN
Subtitle A--General Provisions
Sec. 201. Strategic plan to enhance the security of the international
supply chain.
Sec. 202. Post-incident resumption of trade.
Sec. 203. Automated Targeting System.
Sec. 204. Container security standards and procedures.
Sec. 205. Container Security Initiative.
[Subtitle B--Customs-Trade Partnership Against Terrorism
[Sec. 211. Establishment.
[Sec. 212. Eligible entities.
[Sec. 213. Minimum requirements.
[Sec. 214. Tier 1 participants in C-TPAT.
[Sec. 215. Tier 2 participants in C-TPAT.
[Sec. 216. Tier 3 participants in C-TPAT.
[Sec. 217. Consequences for lack of compliance.
[Sec. 218. Third party validations.
[Sec. 219. Revalidation.
[Sec. 220. Noncontainerized cargo.
[Sec. 221. C-TPAT program management.
[Sec. 222. Additional personnel.
[Sec. 223. Authorization of appropriations.]
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.
Subtitle C--Miscellaneous Provisions
Sec. 231. Pilot integrated scanning system.
Sec. 232. Screening and scanning of cargo containers.
Sec. 233. International cooperation and coordination.
Sec. 234. Foreign port assessments.
Sec. 235. Pilot program to improve the security of empty containers.
Sec. 236. Information sharing relating to supply chain security
cooperation.
TITLE III--ADMINISTRATION
Sec. 301. Office of Cargo Security Policy.
Sec. 302. Reauthorization of Homeland Security Science and Technology
Advisory Committee.
Sec. 303. Research, development, test, and evaluation efforts in
furtherance of maritime and cargo security.
TITLE IV--AGENCY RESOURCES AND OVERSIGHT
Sec. 401. Trade and customs revenue functions of the department.
Sec. 402. Office of international trade; oversight.
Sec. 403. Resources.
Sec. 404. Negotiations.
Sec. 405. International Trade Data System.
Sec. 406. In-bond cargo.
Sec. 407. Sense of the Senate.
TITLE V--DOMESTIC NUCLEAR DETECTION OFFICE
Sec. 501. Establishment of Domestic Nuclear Detection Office.
Sec. 502. Technology research and development investment strategy for
nuclear and radiological detection.
TITLE VI--COMMERCIAL MOBILE SERVICE ALERTS
Sec. 601. Short title.
Sec. 602. Federal Communications Commission duties.
Sec. 603. Commercial Mobile Service Alert Advisory Committee.
Sec. 604. Research and development.
Sec. 605. Grant program for remote community alert systems.
Sec. 606. Funding.
Sec. 607. Essential services disaster assistance.
Sec. 608. Community disaster loans.
Sec. 609. Public facilities.
Sec. 610. Expedited payments.
Sec. 611. Use of local contracting.
Sec. 612. FEMA programs.
Sec. 613. Homeland security definition.
TITLE VII--OTHER MATTERS
Sec. 701. Security plan for essential air service and small community
airports.
Sec. 702. Disclosures regarding homeland security grants.
Sec. 703. Trucking security.
Sec. 704. Air and Marine Operations of the Northern Border Air Wing.
Sec. 705. Phaseout of vessels supporting oil and gas development.
Sec. 706. Coast Guard property in Portland, Maine.
Sec. 707. Methamphetamine and methamphetamine precursor chemicals.
Sec. 708. Aircraft charter customer and lessee prescreening program.
Sec. 709. Protection of health and safety during disasters.
TITLE VIII--UNLAWFUL INTERNET GAMBLING ENFORCEMENT
Sec. 801. Short title.
Sec. 802. Prohibition on acceptance of any payment instrument for
unlawful Internet gambling.
Sec. 803. Internet gambling in or through foreign jurisdictions.
* * * * * * *
TITLE II--SECURITY OF THE INTERNATIONAL SUPPLY CHAIN
* * * * * * *
[Subtitle B--Customs-Trade Partnership Against Terrorism
[SEC. 211. ESTABLISHMENT.
[(a) Establishment.--The Secretary, acting through the
Commissioner, is authorized to establish a voluntary
government-private sector program (to be known as the
``Customs-Trade Partnership Against Terrorism'' or ``C-TPAT'')
to strengthen and improve the overall security of the
international supply chain and United States border security,
and to facilitate the movement of secure cargo through the
international supply chain, by providing benefits to
participants meeting or exceeding the program requirements.
Participants in C-TPAT shall include Tier 1 participants, Tier
2 participants, and Tier 3 participants.
[(b) Minimum Security Requirements.--The Secretary, acting
through the Commissioner, shall review the minimum security
requirements of C-TPAT at least once every year and update such
requirements as necessary.
[SEC. 212. ELIGIBLE ENTITIES.
[Importers, customs brokers, forwarders, air, sea, land
carriers, contract logistics providers, and other entities in
the international supply chain and intermodal transportation
system are eligible to apply to voluntarily enter into
partnerships with the Department under C-TPAT.
[SEC. 213. MINIMUM REQUIREMENTS.
[An applicant seeking to participate in C-TPAT shall--
[(1) demonstrate a history of moving cargo in the
international supply chain;
[(2) conduct an assessment of its supply chain based
upon security criteria established by the Secretary,
acting through the Commissioner, including--
[(A) business partner requirements;
[(B) container security;
[(C) physical security and access controls;
[(D) personnel security;
[(E) procedural security;
[(F) security training and threat awareness;
and
[(G) information technology security;
[(3) implement and maintain security measures and
supply chain security practices meeting security
criteria established by the Commissioner; and
[(4) meet all other requirements established by the
Commissioner, in consultation with the Commercial
Operations Advisory Committee.
[SEC. 214. TIER 1 PARTICIPANTS IN C-TPAT.
[(a) Benefits.--The Secretary, acting through the
Commissioner, shall offer limited benefits to a Tier 1
participant who has been certified in accordance with the
guidelines referred to in subsection (b). Such benefits may
include a reduction in the score assigned pursuant to the
Automated Targeting System of not greater than 20 percent of
the high-risk threshold established by the Secretary.
[(b) Guidelines.--Not later than 180 days after the date of
the enactment of this Act, the Secretary, acting through the
Commissioner, shall update the guidelines for certifying a C-
TPAT participant's security measures and supply chain security
practices under this section. Such guidelines shall include a
background investigation and extensive documentation review.
[(c) Timeframe.--To the extent practicable, the Secretary,
acting through the Commissioner, shall complete the Tier 1
certification process within 90 days of receipt of an
application for participation in C-TPAT.
[SEC. 215. TIER 2 PARTICIPANTS IN C-TPAT.
[(a) Validation.--The Secretary, acting through the
Commissioner, shall validate the security measures and supply
chain security practices of a Tier 1 participant in accordance
with the guidelines referred to in subsection (c). Such
validation shall include on-site assessments at appropriate
foreign locations utilized by the Tier 1 participant in its
supply chain and shall, to the extent practicable, be completed
not later than 1 year after certification as a Tier 1
participant.
[(b) Benefits.--The Secretary, acting through the
Commissioner, shall extend benefits to each C-TPAT participant
that has been validated as a Tier 2 participant under this
section, which may include--
[(1) reduced scores in the Automated Targeting
System;
[(2) reduced examinations of cargo; and
[(3) priority searches of cargo.
[(c) Guidelines.--Not later than 180 days after the date of
the enactment of this Act, the Secretary, acting through the
Commissioner, shall develop a schedule and update the
guidelines for validating a participant's security measures and
supply chain security practices under this section.
[SEC. 216. TIER 3 PARTICIPANTS IN C-TPAT.
[(a) In general.--The Secretary, acting through the
Commissioner, shall establish a third tier of C-TPAT
participation that offers additional benefits to participants
who demonstrate a sustained commitment to maintaining security
measures and supply chain security practices that exceed the
guidelines established for validation as a Tier 2 participant
in C-TPAT under section 215.
[(b) Criteria.--The Secretary, acting through the
Commissioner, shall designate criteria for validating a C-TPAT
participant as a Tier 3 participant under this section. Such
criteria may include--
[(1) compliance with any additional guidelines
established by the Secretary that exceed the guidelines
established pursuant to section 215 of this Act for
validating a C-TPAT participant as a Tier 2
participant, particularly with respect to controls over
access to cargo throughout the supply chain;
[(2) submission of additional information regarding
cargo prior to loading, as determined by the Secretary;
[(3) utilization of container security devices,
technologies, policies, or practices that meet
standards and criteria established by the Secretary;
and
[(4) compliance with any other cargo requirements
established by the Secretary.
[(c) Benefits.--The Secretary, acting through the
Commissioner, in consultation with the Commercial Operations
Advisory Committee and the National Maritime Security Advisory
Committee, shall extend benefits to each C-TPAT participant
that has been validated as a Tier 3 participant under this
section, which may include--
[(1) the expedited release of a Tier 3 participant's
cargo in destination ports within the United States
during all threat levels designated by the Secretary;
[(2) further reduction in examinations of cargo;
[(3) priority for examinations of cargo; and
[(4) further reduction in the risk score assigned
pursuant to the Automated Targeting System; and
[(5) inclusion in joint incident management
exercises, as appropriate.
[(d) Deadline.--Not later than 2 years after the date of the
enactment of this Act, the Secretary, acting through the
Commissioner, shall designate appropriate criteria pursuant to
subsection (b) and provide benefits to validated Tier 3
participants pursuant to subsection (c).
[SEC. 217. CONSEQUENCES FOR LACK OF COMPLIANCE.
[(a) In general.--If at any time a C-TPAT participant's
security measures and supply chain security practices fail to
meet any of the requirements under this subtitle, the
Commissioner may deny the participant benefits otherwise
available under this subtitle, in whole or in part. The
Commissioner shall develop procedures that provide appropriate
protections to C-TPAT participants before benefits are revoked.
Such procedures may not limit the ability of the Commissioner
to take actions to protect the national security of the United
States.
[(b) False or Misleading Information.--If a C-TPAT
participant knowingly provides false or misleading information
to the Commissioner during the validation process provided for
under this subtitle, the Commissioner shall suspend or expel
the participant from C-TPAT for an appropriate period of time.
The Commissioner, after the completion of the process under
subsection (c), may publish in the Federal Register a list of
participants who have been suspended or expelled from C-TPAT
pursuant to this subsection, and may make such list available
to C-TPAT participants.
[(c) Right of Appeal.--
[(1) In general.--A C-TPAT participant may appeal a
decision of the Commissioner pursuant to subsection
(a). Such appeal shall be filed with the Secretary not
later than 90 days after the date of the decision, and
the Secretary shall issue a determination not later
than 180 days after the appeal is filed.
[(2) Appeals of other decisions.--A C-TPAT
participant may appeal a decision of the Commissioner
pursuant to subsection (b). Such appeal shall be filed
with the Secretary not later than 30 days after the
date of the decision, and the Secretary shall issue a
determination not later than 180 days after the appeal
is filed.
[SEC. 218. THIRD PARTY VALIDATIONS.
[(a) Plan.--The Secretary, acting through the Commissioner,
shall develop a plan to implement a 1-year voluntary pilot
program to test and assess the feasibility, costs, and benefits
of using third party entities to conduct validations of C-TPAT
participants.
[(b) Consultations.--Not later than 120 days after the date
of the enactment of this Act, after consulting with private
sector stakeholders, including the Commercial Operations
Advisory Committee, the Secretary shall submit a report to the
appropriate congressional committees on the plan described in
subsection (a).
[(c) Pilot program.--
[(1) In general.--Not later than 1 year after the
consultations described in subsection (b), the
Secretary shall carry out the 1-year pilot program to
conduct validations of C-TPAT participants using third
party entities described in subsection (a).
[(2) Authority of the secretary.--The decision to
validate a C-TPAT participant is solely within the
discretion of the Secretary, or the Secretary's
designee.
[(d) Certification of Third Party Entities.--The Secretary
shall certify a third party entity to conduct validations under
subsection (c) if the entity--
[(1) demonstrates to the satisfaction of the
Secretary that the entity has the ability to perform
validations in accordance with standard operating
procedures and requirements designated by the
Secretary; and
[(2) agrees--
[(A) to perform validations in accordance
with such standard operating procedures and
requirements (and updates to such procedures
and requirements); and
[(B) to maintain liability insurance coverage
at policy limits and in accordance with
conditions to be established by the Secretary;
and
[(3) signs an agreement to protect all proprietary
information of C-TPAT participants with respect to
which the entity will conduct validations.
[(e) Information for Establishing Limits of Liability
Insurance.--A third party entity seeking a certificate under
subsection (d) shall submit to the Secretary necessary
information for establishing the limits of liability insurance
required to be maintained by the entity under this Act.
[(f) Additional Requirements.--The Secretary shall ensure
that--
[(1) any third party entity certified under this
section does not have--
[(A) any beneficial interest in or any direct
or indirect control over the C-TPAT participant
for which the validation services are
performed; or
[(B) any other conflict of interest with
respect to the C-TPAT participant; and
[(2) the C-TPAT participant has entered into a
contract with the third party entity under which the C-
TPAT participant agrees to pay all costs associated
with the validation.
[(g) Monitoring.--
[(1) In general.--The Secretary shall regularly
monitor and inspect the operations of a third party
entity conducting validations under subsection (c) to
ensure that the entity is meeting the minimum standard
operating procedures and requirements for the
validation of C-TPAT participants established by the
Secretary and all other applicable requirements for
validation services.
[(2) Revocation.--If the Secretary determines that a
third party entity is not meeting the minimum standard
operating procedures and requirements designated by the
Secretary under subsection (d)(1), the Secretary
shall--
[(A) revoke the entity's certificate of
conformance issued under subsection (d)(1); and
[(B) review any validations conducted by the
entity.
[(h) Limitation on authority.--The Secretary may only grant a
C-TPAT validation by a third party entity pursuant to
subsection (c) if the C-TPAT participant voluntarily submits to
validation by such third party entity.
[(i) Report.--Not later than 30 days after the completion of
the pilot program conducted pursuant to subsection (c), the
Secretary shall submit a report to the appropriate
congressional committees that contains--
[(1) the results of the pilot program, including the
extent to which the pilot program ensured sufficient
protection for proprietary commercial information;
[(2) the cost and efficiency associated with
validations under the pilot program;
[(3) the impact of the pilot program on the rate of
validations conducted under C-TPAT;
[(4) any impact on national security of the pilot
program; and
[(5) any recommendations by the Secretary based upon
the results of the pilot program.
[SEC. 219. REVALIDATION.
[The Secretary, acting through the Commissioner, shall
develop and implement--
[(1) a revalidation process for Tier 2 and Tier 3
participants;
[(2) a framework based upon objective criteria for
identifying participants for periodic revalidation not
less frequently than once during each 4-year period
following the initial validation; and
[(3) an annual plan for revalidation that includes--
[(A) performance measures;
[(B) an assessment of the personnel needed to
perform the revalidations; and
[(C) the number of participants that will be
revalidated during the following year.
[SEC. 220. NONCONTAINERIZED CARGO.
[The Secretary, acting through the Commissioner, shall
consider the potential for participation in C-TPAT by importers
of noncontainerized cargoes that otherwise meet the
requirements under this subtitle.
[SEC. 221. C-TPAT PROGRAM MANAGEMENT.
[(a) In general.--The Secretary, acting through the
Commissioner, shall establish sufficient internal quality
controls and record management to support the management
systems of C-TPAT. In managing the program, the Secretary shall
ensure that the program includes:
[(1) Strategic Plan.--A 5-year plan to identify
outcome-based goals and performance measures of the
program.
[(2) Annual plan.--An annual plan for each fiscal
year designed to match available resources to the
projected workload.
[(3) Standardized work program.--A standardized work
program to be used by agency personnel to carry out the
certifications, validations, and revalidations of
participants. The Secretary shall keep records and
monitor staff hours associated with the completion of
each such review.
[(b) Documentation of Reviews.--The Secretary, acting through
the Commissioner, shall maintain a record management system to
document determinations on the reviews of each C-TPAT
paricipant, including certifications, validations, and
revalidations.
[(c) Confidential Information Safeguards.--In consultation
with the Commercial Operations Advisory Committee, the
Secretary, acting through the Commissioner, 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, and
revalidation processes.
[(d) Resource Management Staffing Plan.--The Secretary,
acting through the Commissioner, shall--
[(1) develop a staffing plan to recruit and train
staff (including a formalized training program) to meet
the objectives identified in the strategic plan of the
C-TPAT program; and
[(2) provide cross-training in postincident trade
resumption for personnel who administer the C-TPAT
program.
[(e) Report to Congress.--In connection with the President's
annual budget submission for the Department, the Secretary
shall report to the appropriate congressional committees on the
progress made by the Commissioner to certify, validate, and
revalidate C-TPAT participants. Such report shall be due on the
same date that the President's budget is submitted to the
Congress.
[SEC. 222. ADDITIONAL PERSONNEL.
[For fiscal years 2008 and 2009, the Commissioner shall
increase by not less than 50 the number of full-time personnel
engaged in the validation and revalidation of C-TPAT
participants (over the number of such personnel on the last day
of the previous fiscal year), and shall provide appropriate
training and support to such additional personnel.
[SEC. 223. AUTHORIZATION OF APPROPRIATIONS.
[(a) C-TPAT.--There are authorized to be appropriated to the
United States Customs and Border Protection to carry out the
provisions of sections 211 through 221 to remain available
until expended--
[(1) $65,000,000 for fiscal year 2008;
[(2) $72,000,000 for fiscal year 2009; and
[(3) $75,600,000 for fiscal year 2010.
[(b) Additional Personnel.--In addition to any amounts
otherwise appropriated to the United States Customs and Border
Protection, there are authorized to be appropriated for the
purpose of meeting the staffing requirement provided for in
section 222, to remain available until expended--
[(1) $8,500,000 for fiscal year 2008;
[(2) $17,600,000 for fiscal year 2009;
[(3) $19,000,000 for fiscal year 2010;
[(4) $20,000,000 for fiscal year 2011; and
[(5) $21,000,000 for fiscal year 2012.]
Subtitle B--Customs-Trade Partnership Against Terrorism
SEC. 211. ESTABLISHMENT OF THE CUSTOMS-TRADE PARTNERSHIP AGAINST
TERRORISM PROGRAM.
(a) 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).
(b) Purpose.--The purposes of the C-TPAT program are to--
(1) strengthen and improve the overall security of
the international supply chain and United States border
security;
(2) facilitate the movement of secure cargo through
the international supply chain;
(3) ensure compliance with applicable law; and
(4) serve as the Authorized Economic Operator program
for the United States.
(c) 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.
(d) Duties.--The Director of the C-TPAT program shall--
(1) oversee the activities of the C-TPAT program,
including certification of C-TPAT participants;
(2) evaluate and make revisions to security criteria
pursuant to subsections (c) and (d) of section 213;
(3) ensure that participants receive a tangible and
measurable benefit for participation; and
(4) carry out other duties and powers prescribed by
the Executive Assistant Commissioner.
SEC. 212. ELIGIBLE ENTITIES AND NOTICE OF BENEFITS.
(a) 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.
(b) Tiered Participation.--
(1) In general.--Applicants may be eligible to
participate as Tier 1 or Tier 2 participants.
(2) Importers.--Importers may be eligible to
participate as Tier 3 participants.
(3) Extension.--The Executive Assistant Commissioner
may, in his or her discretion, extend Tier 3
participation to other entity types, if appropriate.
(c) Notice of Benefits.--
(1) 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.
(2) 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.
SEC. 213. PARTICIPATION ELIGIBILITY.
(a) 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.
(b) General Requirements.--To be eligible for participation
in the C-TPAT program, an entity shall, at a minimum--
(1) 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;
(2) 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
(3) meet any specific requirements for eligible
entities, as established by the Commissioner.
(c) 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.
(d) 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.
(e) 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--
(1) 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);
(2) determine operational feasibility and, where
appropriate, conduct a phased implementation of such
proposed additional or updated security criteria; and
(3) 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.
(f) 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.
SEC. 214. BENEFITS FOR C-TPAT PROGRAM PARTICIPANTS.
(a) 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:
(1) Assignment of a U.S. Customs and Border
Protection Supply Chain Security Specialist.
(2) Access to the C-TPAT program's web-based Portal
system and training materials.
(3) A periodic and unclassified update on regional
and other relevant threats to the international supply
chain.
(b) 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.
(c) 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.
SEC. 215. TIER 1 PARTICIPANTS.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
SEC. 216. TIER 2 PARTICIPANTS.
(a) 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.
(b) 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:
(1) Reduced scores in U.S. Customs and Border
Protection's Automated Targeting System.
(2) Reduced number of security examinations by U.S.
Customs and Border Protection.
(3) Priority examinations of cargo.
(4) Access to the Free and Secure Trade (FAST) Lanes
at United States ports of entry.
(5) Recognition as a trusted trade partner by foreign
customs administrations that have signed Mutual
Recognition Arrangements with U.S. Customs and Border
Protection.
(6) In the case of importers, eligibility to
participate in the Importer Self-Assessment Program
(ISA) or successor compliance program.
(c) 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.
(d) 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.
SEC. 217. TIER 3 PARTICIPANTS.
(a) 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.
(b) 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--
(1) 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
(2) any other factors that the Executive Assistant
Commissioner determines appropriate.
(c) 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:
(1) Further reduction in the number of examinations
by U.S. Customs and Border Protection.
(2) Front of the line inspections and examinations.
(3) Exemption from Stratified Exams.
(4) Shorter wait times at United States ports of
entry.
(5) Access to the Free and Secure Trade (FAST) Lanes
at United States ports of entry.
(6) Recognition as a trusted trade partner by foreign
customs administrations that have signed Mutual
Recognition Arrangements with U.S. Customs and Border
Protection.
(7) In the case of importers, eligibility to
participate in the Importer Self-Assessment Program
(ISA) or successor compliance program.
SEC. 218. CONSEQUENCES FOR LACK OF COMPLIANCE.
(a) 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.
(b) 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.
(c) 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.
(d) Right of Appeal.--
(1) 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.
(2) 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.
SEC. 219. VALIDATIONS BY OTHER DHS COMPONENTS.
(a) 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.
(b) 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.
(c) 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.
SEC. 220. RECERTIFICATION AND REVALIDATION.
(a) 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--
(1) a review of the security profile and supporting
documentation to ensure adherence to the minimum
security criteria under section 213; and
(2) background checks and vetting.
(b) 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--
(1) 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;
(2) on-site assessments at appropriate foreign and
domestic locations utilized by such a participant in
its international supply chain; and
(3) an annual plan for revalidation that includes--
(A) performance measures;
(B) an assessment of the personnel needed to
perform such revalidations; and
(C) the number of participants that will be
revalidated during the following year.
(c) Revalidation Under a Mutual Recognition Arrangement.--
(1) 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.
(2) 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).
(3) 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.
(d) 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.
SEC. 221. 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.
SEC. 222. PROGRAM MANAGEMENT.
(a) 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:
(1) A 5-year plan to identify outcome-based goals and
performance measures of the C-TPAT program.
(2) An annual plan for each fiscal year designed to
match available resources to the projected workload.
(3) A standardized work program to be used by agency
personnel to carry out the certifications, validations,
recertifications, and revalidations of C-TPAT program
participants.
(4) 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.
(b) Documentation of Reviews.--
(1) 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.
(2) 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.
(c) 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.
(d) Resource Management Staffing Plan.--The Commissioner of
U.S. Customs and Border Protection shall--
(1) 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
(2) provide cross-training in post incident trade
resumption for the C-TPAT Director and other relevant
personnel who administer the C-TPAT program.
(e) 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.
(f) 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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