CTPAT Audit : Securing your supply chain

What is a CTPAT audit ?

A CTPAT audit assesses the risks within your international supply chain according to products quality standards set by the United States. This can help you become an Authorized Economic Operator (AEO) in the United States, paving the way for significant benefits such as reducing customs controls, speeding up procedures and improving your reputation.

This audit is fully part of the Customs Trade Partnership Against Terrorism (CTPAT) program, a partnership between international trade actors and US customs to enhance the security of supply chains while facilitating low-risk trade. Implemented after the September 11, 2001 attacks, the program now has more than 10,700 partner companies in each segment of the supply chain.

The CTPAT audit verifies your company’s compliance with the program’s security standards, which include access management, training, cargo traceability, rigorous supplier selection and container security, among others. It may be conducted by a security specialist designated by the United States or by a certified external entity.

The audit process consists of five key steps : identifying threats to the supply chain, assessing potential weaknesses, developing an action plan to address them, conducting the compliance audit and finally, issuing a recommendation. This last step may lead to the issuance of a CTPAT certificate if the criteria are fully met, or indicate the necessary improvements if not.

Why do a CTPAT audit for your company ?

Opting for a CTPAT audit offers your company significant benefits both in terms of security and economic gains. By becoming an Authorized Economic Operator (AEO) in the United States, you benefit from simplified customs procedures and commercial facilities, which translates into time and cost savings.

The benefits of a CTPAT audit include :

• Improve the safety and security of your international supply chain. This helps you minimize the risk of theft, counterfeiting, terrorism and other threats that may affect your property, employees or partners.
• A reinforcement of your brand image and reputation, thanks to your commitment to international security standards and your collaboration with customs. This can boost your competitiveness and attractiveness in the global market.
• Various customs advantages, including less frequent controls, accelerated procedures, smooth and secure border crossings (FAST), priority during inspections or checks, and a reduction in customs duties. These advantages optimize your logistics flows and reduce delivery times.
• Mutual recognition with other similar trusted programs internationally, such as the European Union’s AEO program, Canada’s PIP program, or Japan’s AEO program. These agreements allow you to enjoy the same benefits in several partner countries, without the need for further audits.

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Finally, conducting a CTPAT audit for your business is a proactive approach that secures your international supply chain and facilitates your trade, not only with the United States but also with other countries. It is a voluntary, recognized initiative, paving the way for new opportunities for development and growth.

Who is the CTPAT audit for ?

The CTPAT audit is intended for all companies engaged in international trade with the United States, wishing to strengthen the security of their supply chain while benefiting from customs benefits. It covers all the links in this chain, including importers, exporters, carriers, brokers, consolidators, manufacturers and port operators.

To initiate a CTPAT audit, the company must first be registered in the CTPAT program. This registration is a voluntary commitment to US customs, conditioned by the completion of an online application form and adherence to the security criteria established by the program.

Then, to carry out the audit, the company must ask the US customs services who will assign a Supply Chain Security Specialist (SCSS) to evaluate the company. The process can also be carried out by an accredited external entity, which will issue a CTPAT certificate following the company’s compliance with the requested standards.

Carrying out a CTPAT audit thus represents an invaluable opportunity for international trade players targeting the American market, wishing not only to strengthen the security of their supply chain but also to obtain the status of Authorised Economic Operator (AEO) in the United States, paving the way for a multitude of customs and trade privileges.

Which organizations offer CTPAT audits ?

When it comes time to have your company audited according to CTPAT standards, two main options arise : Supply Chain Security Specialists (SCSS), mandated by the US authorities and third-party organizations certified by the CTPAT program. Let’s explore the role and benefits of each :

Supply Chain Security Specialists (SCSS)

SCSS are US Customs and Border Protection (CBP) professionals dedicated to assessing the compliance of CTPAT members with defined security standards. Active internationally, they travel directly to companies to perform CTPAT audits.

Choosing a SCSS has many advantages :

• Audit offered by the American authorities, so no cost for you.
• Audit assurance in accordance with CTPAT guidelines.
• Opportunity to contact SCSS directly for questions or advice.
• Receive a detailed audit report, with strengths, weaknesses and recommendations for improvement.
• Possibility to obtain a direct recommendation from the SCSS, useful to secure or renew your CTPAT certification.

Accredited third party organizations

These private entities, validated by the CTPAT program, offer audit services to participating companies. They must follow specific guidelines and are regularly evaluated by the CBP to ensure the quality of their services.

Opting for a certified third-party organization offers significant advantages :

• Maximum flexibility in choosing the body according to your specific criteria.
• Schedule the audit at your convenience and get the report quickly.
• Access to an expanded spectrum of services compatible with other standards such as AEO, Intertek GSV, or ISO 28000.
• Receipt of a CTPAT certificate attesting to your compliance, which can be valued by your customers and partners.

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Regardless of your choice, it is important to verify that the organization is officially recognized and appropriate for a quality CTPAT audit. The list of accredited third-party organizations is available on the CTPAT website, and for more information, the CBP remains an accessible resource.

The key steps to a successful CTPAT audit

To ensure the security of your international supply chain and pass the Customs-Trade Partnership Against Terrorism (CTPAT) audit, it is necessary to follow a five-step structured process.

Step 1 : Threat Assessment

Start by identifying potential threats to your supply chain, including terrorism, theft, counterfeiting, and corruption. Consider the geographical, political, economic and social factors that may affect your business. Also include information from authorities. Assess the reliability of your business partners and ensure their compliance with CTPAT security standards.

Step 2 : Vulnerability Assessment

Analyze weaknesses in your supply chain that could be exploited by malicious actors. This examination must cover physical, technical, procedural and human aspects. Ensure you meet the minimum security requirements of the CTPAT and determine the effectiveness of your prevention and protection measures.

Step 3 : Action Plan

Identify and prioritize corrective actions to mitigate identified risks and vulnerabilities. Define responsibilities, deadlines and monitoring indicators for each action. Document and share your action plan with your business partners.

Step 4 : Audit

Conduct an assessment of your company’s compliance with CTPAT security criteria. The audit, which can be performed by a Supply Chain Security Specialist (SCSS) or an accredited third-party organization, includes a review of your documents, facilities, equipment, processes and personnel. Visits to your business partners can also be included.

Step 5 : Recommendation

This step includes receiving an audit report. This document details your strengths and weaknesses and offers recommendations to strengthen your security. If you meet the CTPAT program criteria, this allows you to acquire or renew your CTPAT certification. This certification confirms your status as an Authorized Economic Operator (AEO) in the United States.

In the event that you do not meet the requirements, you will need to implement the suggested corrective measures and then perform a new audit.

By following these five steps, you can perform an effective CTPAT audit, ensuring the security of your international supply chain while enjoying the benefits of simplified customs procedures.

How much does a CTPAT audit cost ?

The price of a CTPAT audit varies depending on the organization chosen for its completion, as well as the complexity and duration of the latter. There are two main categories of organizations that can perform CTPAT audits : Supply Chain Security Specialists (SCSS), appointed by US authorities, and third-party organizations, accredited by the CTPAT program. To estimate the cost of a CTPAT audit, the following are the key considerations :

The cost of an SCSS audit

By selecting a SCSS for your audit, the audit fees themselves are covered by the US authorities, thus eliminating any need for payment on your part for this service. However, expenses related to travel, accommodation and meals for the SCSS, which visits your site for the audit, remain at your expense. These costs may vary depending on different factors such as distance, duration and terms of stay. It is also necessary to budget for the implementation of corrective actions required by the CSSS in the event of non-compliance with the CTPAT security criteria.

The amount of such expenditure will depend specifically on the scope and nature of the actions to be undertaken.

The cost of an audit conducted by an accredited third-party organization

Choosing an accredited third-party body for the audit involves the payment of an audit fee, the amount of which is determined by the body in question. These fees vary according to several parameters, including the type, size and industry of your company, as well as the scope, duration and frequency of the audit. As with the SCSS, the costs of travel, accommodation and catering for the listener, who visits the site, are at your expense.

These costs are comparable to those incurred for a SCSS. In addition, there must be a budget for the completion of corrective actions required by the organization in the event of non-compliance with the CTPAT security criteria, which is similar to that provided with a CSSS.

On average, the price of a CTPAT audit performed by an accredited third-party organization is estimated to be between $5,000 and $20,000, which may increase if you wish to add other compatible audits or certifications, such as the European Union AEO program, the Intertek GSV programme or the ISO 28000 programme on supply chain security.

The cost of a CTPAT audit depends on multiple factors and its exact determination in advance can be complicated. It is advisable to compare the proposals of different organizations offering this type of audit and choose the option that best suits your needs, preferences and budget.

Is there a renewal for the CTPAT audit ?

Yes, the renewal of the CTPAT audit is essential because the certificate is not permanently valid. This regular process ensures your continued status as an Authorized Economic Operator (AEO) in the United States, allowing you to continue to enjoy the benefits of the CTPAT program.

It is important to understand the following aspects regarding the renewal of the CTPAT audit :

The frequency of renewal

The frequency with which you need to renew your CTPAT audit varies depending on your company’s level of certification within the program. There are three levels of certification :

• Level I : Initial membership provides basic benefits.
• Level II : Validation entitles you to additional benefits.
• Level III : The level of excellence offers the most important benefits.

Audits must be renewed at the following frequencies :

• Level I : every four years.
• Level II : every three years.
• Level III : every two years.

The renewal process

The renewal of the CTPAT audit is similar to your initial audit. This process ensures that your company always meets the program’s security standards and has implemented any necessary corrective measures identified in the previous audit. The steps include :

• Threat assessments
• Assessing vulnerabilities
• Action plan
• Site audit
• Issuing recommendations

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For renewal, you can choose the same organization as your previous audit or a new one. It is important to apply for renewal at least six months before your certification expires to avoid interruption of benefits.

The benefits of renewal

Renewing your CTPAT audit offers multiple benefits to your business :

• Maintain your status as an authorized economic operator in the United States, allowing you to benefit from customs facilities.
• Improve the safety and security of your supply chain against current threats.
• Improve your company’s brand image and reputation through your commitment to safety standards.
• Recognition of the quality of your efforts through other similar accreditation programs internationally.

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CTPAT has an interest in the security of your supply chain and to streamline your business transactions with the United States and beyond.