69–006 

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: 

2 

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— 

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‘‘(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. 

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‘‘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 esVerDate Sep 11 2014 05:52 Sep 26, 2017 Jkt 069006 PO 00000 Frm 00004 Fmt 6659 Sfmt 6621 E:\HR\OC\HR323.XXX HR323
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tablished 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 

6 

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. 

7 

‘‘(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.’’. 

8 

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. BARRAGA ́ N (#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 

9 

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. 

10 

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. 

11 

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: 

12 

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. 

13 

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 

14 

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 CTPAT 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. 

15 

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 

16 

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 reVerDate Sep 11 2014 05:52 Sep 26, 2017 Jkt 069006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6602 E:\HR\OC\HR323.XXX HR323
17 

validations, 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 

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18 

promised 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. 

19 

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. 

øSubtitle B—Customs-Trade Partnership Against Terrorism 

øSec. 211. Establishment. 

øSec. 212. Eligible entities. 

øSec. 213. Minimum requirements. 

øSec. 214. Tier 1 participants in C-TPAT. 

øSec. 215. Tier 2 participants in C-TPAT. 

øSec. 216. Tier 3 participants in C-TPAT. 

øSec. 217. Consequences for lack of compliance. 

øSec. 218. Third party validations. 

øSec. 219. Revalidation. 

øSec. 220. Noncontainerized cargo. 

øSec. 221. C-TPAT program management. 

øSec. 222. Additional personnel. 

øSec. 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. 

20 

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 

* * * * * * * 

øSubtitle B—Customs-Trade Partnership 

Against Terrorism 

øSEC. 211. ESTABLISHMENT. 

ø(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. 

21 

ø(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. 

øSEC. 212. ELIGIBLE ENTITIES. 

øImporters, 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. 

øSEC. 213. MINIMUM REQUIREMENTS. 

øAn applicant seeking to participate in C-TPAT shall— 

ø(1) demonstrate a history of moving cargo in the international supply chain; 

ø(2) conduct an assessment of its supply chain based upon 

security criteria established by the Secretary, acting through 

the Commissioner, including— 

ø(A) business partner requirements; 

ø(B) container security; 

ø(C) physical security and access controls; 

ø(D) personnel security; 

ø(E) procedural security; 

ø(F) security training and threat awareness; and 

ø(G) information technology security; 

ø(3) implement and maintain security measures and supply 

chain security practices meeting security criteria established 

by the Commissioner; and 

ø(4) meet all other requirements established by the Commissioner, in consultation with the Commercial Operations Advisory Committee. 

øSEC. 214. TIER 1 PARTICIPANTS IN C-TPAT. 

ø(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. 

ø(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. 

ø(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. 

øSEC. 215. TIER 2 PARTICIPANTS IN C-TPAT. 

ø(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 onVerDate Sep 11 2014 05:52 Sep 26, 2017 Jkt 069006 PO 00000 Frm 00021 Fmt 6659 Sfmt 6602 E:\HR\OC\HR323.XXX HR323
22 

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. 

ø(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— 

ø(1) reduced scores in the Automated Targeting System; 

ø(2) reduced examinations of cargo; and 

ø(3) priority searches of cargo. 

ø(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. 

øSEC. 216. TIER 3 PARTICIPANTS IN C-TPAT. 

ø(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. 

ø(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— 

ø(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; 

ø(2) submission of additional information regarding cargo 

prior to loading, as determined by the Secretary; 

ø(3) utilization of container security devices, technologies, 

policies, or practices that meet standards and criteria established by the Secretary; and 

ø(4) compliance with any other cargo requirements established by the Secretary. 

ø(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— 

ø(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; 

ø(2) further reduction in examinations of cargo; 

ø(3) priority for examinations of cargo; and 

ø(4) further reduction in the risk score assigned pursuant to 

the Automated Targeting System; and 

ø(5) inclusion in joint incident management exercises, as appropriate. 

ø(d) DEADLINE.—Not later than 2 years after the date of the enactment of this Act, the Secretary, acting through the CommisVerDate Sep 11 2014 05:52 Sep 26, 2017 Jkt 069006 PO 00000 Frm 00022 Fmt 6659 Sfmt 6602 E:\HR\OC\HR323.XXX HR323
23 

sioner, shall designate appropriate criteria pursuant to subsection 

(b) and provide benefits to validated Tier 3 participants pursuant 

to subsection (c). 

øSEC. 217. CONSEQUENCES FOR LACK OF COMPLIANCE. 

ø(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. 

ø(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. 

ø(c) RIGHT OF APPEAL.— 

ø(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. 

ø(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. 

øSEC. 218. THIRD PARTY VALIDATIONS. 

ø(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. 

ø(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). 

ø(c) PILOT PROGRAM.— 

ø(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). 

ø(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. 

24 

ø(d) CERTIFICATION OF THIRD PARTY ENTITIES.—The Secretary 

shall certify a third party entity to conduct validations under subsection (c) if the entity— 

ø(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 

ø(2) agrees— 

ø(A) to perform validations in accordance with such 

standard operating procedures and requirements (and updates to such procedures and requirements); and 

ø(B) to maintain liability insurance coverage at policy 

limits and in accordance with conditions to be established 

by the Secretary; and 

ø(3) signs an agreement to protect all proprietary information of C-TPAT participants with respect to which the entity 

will conduct validations. 

ø(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. 

ø(f) ADDITIONAL REQUIREMENTS.—The Secretary shall ensure 

that— 

ø(1) any third party entity certified under this section does 

not have— 

ø(A) any beneficial interest in or any direct or indirect 

control over the C-TPAT participant for which the validation services are performed; or 

ø(B) any other conflict of interest with respect to the CTPAT participant; and 

ø(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. 

ø(g) MONITORING.— ø(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. 

ø(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— 

ø(A) revoke the entity’s certificate of conformance issued 

under subsection (d)(1); and 

ø(B) review any validations conducted by the entity. 

ø(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. 

ø(i) REPORT.—Not later than 30 days after the completion of the 

pilot program conducted pursuant to subsection (c), the Secretary 

25 

shall submit a report to the appropriate congressional committees 

that contains— 

ø(1) the results of the pilot program, including the extent to 

which the pilot program ensured sufficient protection for proprietary commercial information; 

ø(2) the cost and efficiency associated with validations under 

the pilot program; 

ø(3) the impact of the pilot program on the rate of validations conducted under C-TPAT; 

ø(4) any impact on national security of the pilot program; 

and 

ø(5) any recommendations by the Secretary based upon the 

results of the pilot program. 

øSEC. 219. REVALIDATION. 

øThe Secretary, acting through the Commissioner, shall develop 

and implement— 

ø(1) a revalidation process for Tier 2 and Tier 3 participants; 

ø(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 

ø(3) an annual plan for revalidation that includes— 

ø(A) performance measures; 

ø(B) an assessment of the personnel needed to perform 

the revalidations; and 

ø(C) the number of participants that will be revalidated 

during the following year. 

øSEC. 220. NONCONTAINERIZED CARGO. 

øThe 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. 

øSEC. 221. C-TPAT PROGRAM MANAGEMENT. 

ø(a) IN GENERAL.—The Secretary, acting through the Commissioner, shall establish sufficient internal quality controls and 

record management to support the management systems of CTPAT. In managing the program, the Secretary shall ensure that 

the program includes: 

ø(1) STRATEGIC PLAN.—A 5-year plan to identify outcomebased goals and performance measures of the program. 

ø(2) ANNUAL PLAN.—An annual plan for each fiscal year designed to match available resources to the projected workload. 

ø(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. 

ø(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. 

ø(c) CONFIDENTIAL INFORMATION SAFEGUARDS.—In consultation 

with the Commercial Operations Advisory Committee, the Secretary, acting through the Commissioner, shall develop and impleVerDate Sep 11 2014 05:52 Sep 26, 2017 Jkt 069006 PO 00000 Frm 00025 Fmt 6659 Sfmt 6602 E:\HR\OC\HR323.XXX HR323
26 

ment 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. 

ø(d) RESOURCE MANAGEMENT STAFFING PLAN.—The Secretary, 

acting through the Commissioner, shall— 

ø(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 

ø(2) provide cross-training in postincident trade resumption 

for personnel who administer the C-TPAT program. 

ø(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 CTPAT participants. Such report shall be due on the same date that 

the President’s budget is submitted to the Congress. 

øSEC. 222. ADDITIONAL PERSONNEL. 

øFor 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. 

øSEC. 223. AUTHORIZATION OF APPROPRIATIONS. 

ø(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— 

ø(1) $65,000,000 for fiscal year 2008; 

ø(2) $72,000,000 for fiscal year 2009; and 

ø(3) $75,600,000 for fiscal year 2010. 

ø(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— 

ø(1) $8,500,000 for fiscal year 2008; 

ø(2) $17,600,000 for fiscal year 2009; 

ø(3) $19,000,000 for fiscal year 2010; 

ø(4) $20,000,000 for fiscal year 2011; and 

ø(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— 

27 

(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— 

28 

(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 

29 

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 locaVerDate Sep 11 2014 05:52 Sep 26, 2017 Jkt 069006 PO 00000 Frm 00029 Fmt 6659 Sfmt 6603 E:\HR\OC\HR323.XXX HR323
30 

tions 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 

31 

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 

32 

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 

33 

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. Thirdparty 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. 

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(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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