About C-TPAT, AEO and Export
If we had thought that the United States government had already used up all the acronyms with the FBI, CIA, FDC, and more, the C-TPAT: Customs-Trade Partnership against Terrorism is here to prove us wrong. Created in 2001, in the aftermath of 9-11, the C-PTAT creates a platform for partner custom agencies to work together to safeguard against terrorist activities, all the while without curtailing trade and even as the partnership claims, speeding up the import/export processes of certified partners. The goal is to allow the U.S. Customs and Border Protection (CBP) to spend less time inspecting partner imports, thus freeing up time to inspect other less "secure" shipments.
As of December 2104, the CBP has signed ten Mutual Recognition Arrangements (New Zealand, Canada, Jordan, Japan, Korea, EU, Taiwan, Israel, and Singapore.) MRAs are created between the CBP and other countries, thus creating a unified system using the same standards to ensure security and facilitate trade.
Israeli Companies and the C-PTAT Process
In June 2014, the Israel Tax Authority signed a MRA with the CBP recognizing the Israeli Authorized Economic Operator" (AEO) program. Hence, providing optimal trade conditions for Israeli companies accepted as certified partners. Approximately 40 operators (exporters, importers, customs brokers, freight forwarders, logistic terminals, and ports) that meet the applicable criteria have been approved as certified partners. The program is operated by the Israeli Customs Authority and is voluntary.
Partners must meet security criteria to join (such as implementation of security procedures, identification of security gaps (mechanisms to transport chemical weapons, human trafficking, money laundering, etc.), employee and trade partners security review) as well as other criteria such as financial viability and a satisfactory system for commercial record management, crisis/disaster recovery documented procedures and compliance with tax and foreign trade laws.
Both the C-PTAT and AEO are based on the World Customs Organization’s (WCO) “Framework of Standards to Secure and Facilitate Global Trade (SAFE)”
Benefits for Israeli Companies
Certified partners benefit from simplified bureaucratic challenges–often faced by Israeli exporters to the U.S. such as:
Reduced probability of stringent custom review;
Expedited customs (import and export);
Document review prior to arrival of goods;
And AEO point of contact.
The Israel Tax Authority Director General, Mr. Moshe Asher, noted that about a quarter of Israel’s exports (around 25 billion NIS) are to the USA and hence this agreement should provide a boost for Israeli companies trading with the U.S.
Participation in the AEO program is free of charge, but does require an initial investment of time and resources to complete the various procedural steps including an application form, security questionnaire, and on-site inspection by the customs authority. Certification is for one year, at the end of which re-examination is carried out the Israeli Customs Authority.
C-TPAT Process is not for all, but if you export significant quantities to the U.S., and time is of the essence when you export – this process may well be worthwhile exploring. AEO status confers global recognition as a responsible and secure business partner in international trade, gives your company a significant advantage in third party risk analysis, offers priority treatment in customs examinations, results in reduced bureaucratic requirements for border crossing, offers simplified procedures, and enables faster movement of goods internationally.
If you think the C-TPAT program may be for you and want to find out how to apply, contact Advocates Beverley Zabow and Michele Manspeizer.