Exports and Security Considerations

Paul B. Fogo is a senior attorney with Miller, Canfield, Paddock & Stone.

The war on terror and Poland's increasing role as a global exporter both present many legal and business challenges for Polish industry. In particular, Polish manufacturers wishing to export to the United States need to familiarize themselves with a new program implemented by U.S. Customs, designed to help speed up the process of clearing goods into the U.S., while at the same time enhancing security at the country's ports and other points of entry.

Customs officials and private enterprises in the United States have implemented the Customs-Trade Partnership Against Terrorism, otherwise known as C-TPAT. Polish manufacturers who participate in C-TPAT will be able to ship their goods into the U.S. without experiencing the growing delays increasingly caused by security concerns. Although voluntary in nature, failure to comply with C-TPAT will inevitably increase the amount of time before an exporter's goods will be permitted across the border.

C-TPAT will not only affect foreign manufacturers wishing to export to the U.S., but also manufacturers further down the chain, who supply component parts used in these exported goods. As such, Polish exporters, together with their suppliers, may be well advised to participate voluntarily in C-TPAT.

This participation will reduce the likelihood that an exporter's cargo will be stopped for security reasons by U.S. Customs; additionally, participants also get access to a list of other participants, which can prove invaluable in selecting suppliers further down the supply chain. Also, if a Polish manufacturer decides to export its goods to the U.S. via Canada, participation in C-TPAT is required in order to take advantage of the dedicated truck lanes on the Canadian border through FAST, a Canadian-U.S. joint program designed to expedite clearance of cross-border shipments. Inside the U.S., participation in C-TPAT is required for those importers who wish to take advantage of the Importer Self-Assessment Program. This self-audit program can remove an importer from the audit pool of companies that would be potentially subject to a comprehensive audit by U.S. Customs. Many U.S. importers that purchase Polish goods are part of this self-assessment program, which means that these importers may have no choice but to insist that their Polish partners comply with C-TPAT.

U.S. Customs requires participants in C-TPAT to implement certain policies in order to manage the security of their supply chain. Applicants must submit signed agreements to U.S. Customs, acknowledging their adherence to C-TPAT's security guidelines. In order to meet the guidelines of C-TPAT, Polish manufacturers should develop a sound, properly documented plan to enhance security procedures. If the manufacturer does not control a facility, conveyance or process in the supply chain, it needs to agree to make every reasonable effort to secure compliance by the responsible party. The company should implement a written security procedure plan that addresses the following general guidelines:

A manufacturer's plant should be constructed of materials sufficient to resist unlawful entry. Physical security should include the following:

1. Properly installed locks on all doors, windows, gates and fences;

2. Segregation of international and domestic goods;

3. Adequate lighting;

4. A parking area for private vehicles, which is separate from the shipping, loading dock, and cargo areas;

5. A security system;

Access to the manufacturing plant, shipping area, loading dock and cargo areas should be controlled, including:

6. Creation of an identification system for all employees, visitors and vendors; and

7. Procedures for challenging unauthorized/unidentified persons.

Measures for the handling of incoming and outgoing goods should include protection against the introduction, exchange, or loss of any legal or illegal material. Security controls should include the following:

8. Having a designated security officer to supervise the introduction/removal of cargo;

9. Properly marked, weighed, counted, and documented products;

10. Procedures for verifying seals on containers, trailers, and railcars;

11. Procedures for detecting and reporting shortages and overages;

12. Procedures for tracking the timely movement of incoming and outgoing goods;

13. Proper storage of empty and full containers to prevent unauthorized access;

14. Procedures to notify Customs and other law enforcement agencies in cases where anomalies or illegal activities are detected or suspected by the company.

Screening of potential employees is also a requirement of C-TPAT, including periodic background checks. Additionally, C-TPAT participants must provide security awareness programs for employees, including controls to maintain product integrity. These programs should encourage active employee participation in security controls.

Finally, C-TPAT participants are subject to periodic inspections by U.S. Customs, to ensure compliance with the security measures agreed to by the manufacturer when joining the program. The on-site visit will verify that the claims made by the participant in its application to join C-TPAT are true and that the security measures presented in its application are being followed.

For those of you interested in learning more about the benefits of joining C-TPAT, U.S. Customs provides a website answering frequently-asked questions, explaining how to apply to join C-TPAT and providing other useful information. The address is: www.cbp.gov/xp/cgov/import/commercial_enforcement/ctpat

The author gratefully acknowledges the assistance of Andrew Doornaert in the preparation of this article.