The CTPAT certification process is lengthy, and once you receive your certification, it can be challenging to maintain compliance on top of all of your day-to-day business activities. Further, if your CTPAT certification is suspended or revoked, this can create confusion and bottlenecks in your processes.
CTPAT certification and compliance lawyers provide invaluable services during the CTPAT application process and in helping you meet your ongoing eligibility requirements. The National Security Law Firm routinely helps clients successfully navigate this often unfamiliar and overwhelming space so they can accomplish their goals. Our team focuses exclusively on cases that fall within the national security space, so you receive our undivided attention and specialized knowledge.
If you want to learn more about the CTPAT certification process, contact our team online or call us today at 202-600-4996 to schedule a consultation.
What Is CTPAT?
Customs-Trade Partnership Against Terrorism (CTPAT) is a certification issued by the CTPAT Trade Compliance program in conjunction with the United States Customs Border and Protection (CBP) agency. CBP created the CTPAT Certification program to streamline the CBP and other governmental agency processes, thus limiting the time it takes to evaluate and screen cargo imported into the country.
The CTPAT Certification allows partners (such as businesses) to apply for special status and meet specific eligibility requirements (initial and ongoing). In exchange, they gain access to benefits and can potentially limit the cost of moving goods and cargo in and out of the United States. To help applicants and those who have a CTPAT certification, US CBP has put together a valuable Customs-Trade Partnership Against Terrorism Trade Compliance Handbook (the CTPAT Trade Compliance Handbook).
What Are the Benefits of CTPAT Certification?
As outlined in the CTPAT Trade Compliance Handbook and on the CBP website, obtaining CTPAT certification confers a variety of possible benefits:
- Priority inspection status to decrease the time it takes for your cargo to cross the border;
- Eligibility to participate in the Importer Self-Assessment Program;
- Less CBP inspections than those without CTPAT certification;
- At land borders, your shipment may pass through the Free and Secure Trade (FAST) Lanes; and
- The ability to help CBP increase national security and prevent forced labor.
There are additional benefits to holding a CTPAT certification, depending on what eligibility requirements your business meets, including whether it is a Tier II or Tier III security partner.
What Is the Process for CTPAT Certification?
The CTPAT certification process can be lengthy because the government wants to ensure that those who apply for and gain this special status are acting in good faith. CTPAT Certification requires you to submit an extensive application, meet specific eligibility requirements, and participate in an interview.
Our firm’s CTPAT Certification and Compliance lawyers can help you navigate the complex and high-stakes application process. We understand how important this is for your business and operations. Our team focuses exclusively on helping those in the national security space, so we are well-versed in the terminology and requirements involved in the CTPAT certification procedure.
Who Is Eligible for CTPAT Certification?
Under existing federal law, the following entities are eligible to apply for CTPAT certification:
- Customs brokers,
- Air, sea, and land carriers,
- Contract logistics providers, and
- Other entities in the international supply chain and intermodal transportation system.
The CBP allows other entities, such as Third Party Logistic Providers and Customs Brokers, to apply for CTPAT certification if they meet the required eligibility parameters.
Under current regulations, the above entities must do business or originate in the United States to be eligible for CTPAT certification. That said, in some cases, CBP may invite foreign entities to apply for CTPAT certification. Foreign entities (e.g., Mexico-based businesses) primarily obtain certification under CTPAT by invitation from the CBP.
What Are the Eligibility Requirements for CTPAT Certification?
Applicants must meet rigorous CTPAT Certification eligibility and security requirements to apply for the program successfully. The minimum requirements for eligibility include the following, as laid out in 9 USC § 963:
- The applicant must show that they actively move cargo in the international supply chain;
- The applicant must conduct a rigorous audit of its security measures and protocols; and
- The applicant must meet the ongoing security requirements laid out by the CBP.
The CBP determines eligibility on a case-by-case basis, and the general requirements differ by industry. For example, the CBP indicates that Importers must meet a host of security criteria, including the following:
- The importer must be an active US importer or an active Non-Resident Canadian importer;
- Have and maintain a valid US Importer of Record (IOR) number, such as a Social Security Number;
- Tender a supply chain security profile in the designated CTPAT portal;
- Maintain a Tier II or Tier III security rating in the CTPAT program; and
- Sign a security agreement with the CTPAT and continuously follow the terms of the contract.
These are just a few of the extensive eligibility requirements imposed by the CBP to acquire and maintain certification. Additional minimum security criteria importers must meet can be found on the CBP website.
How Do You Apply for Certification?
Applying for CTPAT Certification is an extensive process, and applicants must complete the process using the CTPAT Trade Compliance Portal on the CBP website.
The National Security Law Firm has years of experience helping businesses complete the application process. CTPAT certification is an essential milestone for businesses to grow and reduce operating costs. We help companies go through the red tape so they can focus on what matters to them – operating a successful and compliant business.
If you are applying for CTPAT certification, hiring a CTPAT certification and compliance lawyer, not a general practitioner, is critical. This area of law requires special knowledge and insight. Our lawyers have decades of experience in this space and are well-acquainted with what you must do to obtain certification.
How Long Does the Application Process Take?
The CBP cautions online applicants that the procedure takes an average of 20 hours. The application includes many questionnaires and audits of your business’s internal processes, security protocols, average input and output, and other questions. Once you submit the required materials and complete the application, CBP typically issues a decision within as little as 30 days.
The Four Steps in the Application Process
As outlined in the October 2022 Edition of the CTPAT Trade Compliance Handbook, there are four primary steps to complete the initial part of the application:
- Determining eligibility,
- Selecting an Importer of Record (IOR),
- Completing the CTPAT questionnaire, and
- Signing the CTPAT Memorandum of Understanding (MOU).
After the applicant completes these steps, the CBP thoroughly reviews the application, conducts an Application Review Meeting (ARM), and issues a decision.
The first step is proving that your business is eligible for CTPAT Certification. The eligibility requirements are extensive and may require documentary support to show that you meet them.
The CBP is ultimately looking for proof that the applicant has sufficient security protocols and safeguards in place such that foregoing examinations by the CBP would not pose a serious risk to the national security of the United States. As such, the CBP determines whether a company meets eligibility requirements on a case-by-case basis and subjects them to rigorous criteria.
Importer of Record Selection
If your company passes the initial eligibility test, you are directed to the second portion of the application process. You choose the Importer of Record for the CTPAT certification at this stage. The CBP verifies an IOR via a US-issued Social Security Number, an Internal Revenue Service (IRS) assigned ID, or a CBP-identified Importer ID.
The decision about who or what division will serve as your company’s IOR is incredibly important. The IOR impacts the company’s initial and ongoing eligibility and will serve as a critical point of contact between the CBP and the business throughout the application process and after you receive CTPAT certification.
In addition, making changes to your business’s information or certification, once approved, may require the permission of the IOR. If you have questions about who to select as your IOR, consider contacting a CTPAT certification and compliance lawyer.
The next stage of the application process requires your company to complete the Trade Compliance Application Questionnaire. At this juncture, the CBP asks applicants to provide thorough information about the following:
- Their security protocols,
- The volume of goods that they ship to and from the United States,
- The business’s reasons for applying,
- The company’s history and operations,
- The stakeholders within the organization, and
- The business’s financial information.
Further, in many instances, the CBP requires applicants to provide supporting documentation or implement additional policies in the future.
For example, companies wishing to obtain CTPAT certification must have a CBP-compliant policy against forced labor that takes steps to ensure the business does not support or benefit from forced labor. If your company does not already have such a policy, you will likely need to draft and upload a policy that meets CBP’s requirements.
CTPAT Memorandum of Understanding
The final stage of the initial application process is to review and complete the Memorandum of Understanding. The MOU outlines the responsibilities and agreement between you and CBP if it accepts your application and issues a CTPAT certification. Applicants should read this document carefully to ensure that all information is accurate. Any inaccuracies may result in a denial of your application or processing delays, so taking as much time as you need to review this is beneficial.
Note that your company is bound to the terms of the MOU once you sign it. The best practice is to ask an attorney to review the MOU before you sign and submit it to the CBP. The National Security Law Firm regularly reviews MOUs and other CTPAT materials. Our CTPAT certification and compliance lawyers can help you understand the terms of the MOU and whether it is in your best interest to sign it.
Further, in some cases, your company may need to submit multiple MOUs. An attorney at our office can help you identify whether this applies to your situation and assist you with preparing and sending in these agreements.
What Happens During the Application Review Process?
Once the company submits the application, the CBP begins the review process. The review process generally involves the following:
- Reviewing the application and supporting documents;
- Evaluating your company’s risk factors;
- Conducting an application review meeting; and
- Issuing a decision.
If the CBP discovers errors in your application, they will contact you and, in many cases, give you additional time to correct them in a specific timeframe. During this process, the CBP will also validate your security protocols in the flow of the international supply chain.
CTPAT Reviews the Application
During the initial review process, CBP examines the materials submitted by the applicant and assesses their controls, readiness, and risk potential. Regarding preparedness, the CBP indicates that it looks at the company’s processes and how they might operate during the border entry process. CBP is primarily concerned with national security risks and wants to ensure that those it gives a CTPAT certification can assist with limiting the security risks to the United States with minimal CBP intervention.
During the initial review process, CBP may communicate with you about errors or additional information you need to provide to proceed with the application. Once you submit the requested information or correct the mistakes, they can resume processing the application.
CBP Determines the Company’s Risk Factor Score
If you pass the initial review, the next stage is determining your company’s security risk score. They assign different risk factor scores to multiple categories of potential concern. Risk factor determinations are made on a case-by-case basis, but according to the CTPAT Trade Compliance Handbook, some of the criteria that CBP considers include the following:
- Whether you or your company has incurred trade-related penalties,
- If your company engages in trade with high-risk nations or businesses,
- Whether your company imports large amounts of materials using complex tariff paradigms; and
- The results of and reasons for any regulatory audits.
The CBP may use other criteria to calculate a company’s risk factor score.
CTPAT Conducts an Application Review Meeting (ARM)
After the CBP determines your risk score, they will schedule an application review meeting to discuss the results. During this meeting, they will walk you through their assessment and the risk factors assigned to your company. At this stage of the procedure, they will also talk with you and your team about your operations, security protocols, and other pertinent matters.
CTPAT Issues a Decision
The final stage of the application process is where CBP issues a decision about your application for CTPAT certification. Generally, they may take one of the following actions:
- Accept the application,
- Suspend the application pending additional documents or information, or
- Deny the application.
Suppose the CBP determines that your business is not yet ready to undertake the necessary security steps to grant your application. In that case, they typically give you up to 120 days to do what is needed to correct the application. If doing so will take longer than 60 days, they will schedule a second review process.
If the CBP denies your application, they will send you a letter indicating the reasons for the denial and allowing you between 90 and 120 days to correct the reasons for the denial.
What Do You Need to Do to Maintain Your Certification?
Once you receive a CTPAT certification, you must abide by the terms of the MOU and other eligibility requirements to maintain your status. Typically, you have yearly requirements to submit Annual Notification Letters (ANLs) and must revalidate your certification at least once every four years. In addition, you and your team must meet ongoing eligibility requirements and update the CBP with any significant changes to your business, such as a merger or change in ownership.
The Memorandum of Understanding and any other security agreement signed by your company and the CBP outlines the requirements you must meet. You can also find additional information in your company’s online CTPAT Trade Compliance portal.
What Are the Ongoing Eligibility Requirements for CTPAT Certification?
The primary eligibility criteria are that your company cooperates with CBP and CBP’s commitment to national security. What this looks like in practice may mean different things for various companies. What is important is that you continue to implement rigorous security protocols and abide by the contract between you and the CBP.
Your company should also notify CBP of any organizational changes, such as a change in leadership or an acquisition. These changes may impact your eligibility for CTPAT certification, but this is not always the case.
When Do You Need to Submit Updates to CBP?
In many cases, you should submit important updates to CBP as soon as possible or no later than 30 days after your anniversary date of receiving your CTPAT certification. You can find this information on your CTPAT paperwork or by logging into the CTPAT Trade Compliance portal.
What Happens If You Miss the Deadline to Update CBP?
If you miss the deadline to update the CBP, you may be given an extension, but this is not always true. The best practice is to submit the documents as soon as you realize they are due and contact CBP to notify them of the situation. Depending on the length of the delinquency, the CBP may suspend or revoke your certification.
How Do You Remove or Change an IOR?
If your company needs to add, remove, or change an Importer of Record, the CBP cautions against simply deleting the old IOR and adding the new one. As the CTPAT Trade Compliance Handbook states, deleting an IOR may inadvertently remove the associated benefits from your account. Reinstating the benefits may be challenging once CBP removes them, resulting in delays and additional costs to your company.
To make these significant changes, contact the CBP or your CTPAT attorney to ask that they assist you with revising the IOR on your account.
CTPAT Certification Denials, Suspensions, and Revocations
If the CBP denies your CTPAT certification application or suspends or revokes your certification, it can significantly impact your ability to operate within the US and international trade space. Fortunately, there is a process to apply to reinstate your CTPAT certification or make necessary corrections to your application.
If you receive a notice of denial, suspension, or revocation from CBP, do not handle it alone. This area of the law is complex, and your business likely depends on the matter’s accurate and timely resolution. The National Security Law Firm is specially equipped to handle issues involving the CTPAT certification process.
What Are the Reasons Why Someone Might Be Ineligible for CTPAT Certification?
There are a host of reasons why someone may be ineligible for CTPAT certification, such as:
- Missing or incomplete information on their application or recent ANL,
- Failing to follow the terms of the MOU or another applicable agreement with CBP,
- Not taking the necessary security steps within your organization;
- A substantial change in your CTPAT Security level (i.e., no longer Tier II or Tier III), or
- Violating federal laws or regulations.
If CBP determines a company is ineligible for CTPAT certification, they typically communicate with them about their ineligibility and help them become eligible again. If these outreach measures are unsuccessful, they may issue a denial, suspension, or revocation.
In the notice, they will let you know the reason for their decision and typically give you additional time to correct the errors or ask the CBP to reconsider. If you receive a notice of denial, suspension, or revocation, contacting an experienced CTPAT certification and compliance lawyer is essential. They can help you promptly take the necessary steps to overturn the CBP’s decision.
CTPAT Certification Application Denial
If the CBP denies your application, they typically give you additional time to correct any errors on your application or implement the necessary protocols to gain certification. Generally, CBP will provide you with 90 to 120 days in which to take action to correct and resubmit your application. If the CBP again denies your application, you may be able to make changes and amend it as needed, or you may need to start the application process over again.
What Are Your Options If You Face a Suspension of Your CTPAT Certification?
If the CBP determines that you do not meet eligibility requirements or that there is a substantial risk to national security, they may suspend your CTPAT certification. If you receive notice of a suspension, you have 60 days from the notice date to respond. You can respond by addressing the security or other concerns outlined in the suspension notice and detailing a plan of action for achieving compliance.
Within 60 days after you file your response, the CBP will issue a final decision on the suspension. Please note that, during the suspension, you still must abide by the terms of the MOU, including meeting your reporting requirements. Failure to meet these requirements may result in additional adverse action by the CBP.
Our attorneys can help you prepare a response to the suspension. We understand your challenges and how stressful it can be to receive a suspension notice. It can have substantial impacts on your operations and your standing in the business community. We can help you address and overcome these challenges by preparing a reasoned response to the notice.
What Can You Do If Your CTPAT Certification Is Revoked?
According to the CTPAT Trade Compliance Handbook, CBP may revoke an entity’s CTPAT certification for many reasons, including:
- CBP believes that a company obtained certification through fraud or misrepresentation;
- Someone involved with the organization was convicted of a felony or engaged in activity that constituted a felony or misdemeanor;
- The business failed to abide by the terms of the MOU; or
- The company failed to meet the eligibility criteria or poses a security risk.
How CBP revokes your certification depends on the reason for the revocation. For example, if CBP revokes your certification because it believes your company did not abide by the terms of the MOU, it may ask you if you would like to reapply in the future. If so, and the CTPAT leadership board approves this, they typically make changes to your account so you can do so.
If the CBP revokes your CTPAT certification, it will notify you through the CTPAT Trade Compliance portal. The notice will inform you of the reasons for the revocation. If you wish to file one, you must submit a response to the notification within 60 days, addressing the grounds for the revocation and indicating how your company has or will become compliant again.
Within 60 days of you submitting your response, the CBP will issue a final decision about the revocation. You may be able to reapply for CTPAT certification, depending on the reason for the revocation. When CBP determines there is a serious risk to public health or safety, the revocation may be final, with no option to reapply.
A CTPAT certification and compliance attorney can help you file a response to the revocation notice. It is imperative to file a timely and appropriate response if CBP threatens to revoke your certification. Our attorneys practice exclusively in the national security sector and can help you navigate this unfamiliar and challenging space.
Recent Changes to the CTPAT Regulations
In November of 2022, the CBP announced new changes to the CTPAT regulations, including additional benefits and requirements for taking steps to prevent forced labor.
The new requirements to prevent forced labor include requiring the following CTPAT eligibility requirements:
- Risk-based mapping,
- Implementing a code of conduct,
- Providing evidence of implementation of measures to prevent forced labor,
- Due diligence and training to prevent forced labor,
- Remediation planning, and
- Shared best practices.
For businesses who engage in practices aimed to prevent forced labor, the unique benefits conferred on them include the following:
- CTPAT certificate holders may request a priority review of their goods if their shipment is detained due to forced labor concerns.
- CTPAT certificate holders may hold their shipments at their facility rather than shipping them to CBP if they are on hold due to forced labor concerns. The goods must remain intact until CBP makes a determination.
- If CBP detains a CTPAT certificate holder’s shipment because of a Withhold Order, they can move the goods to a bonded facility until CBP decides how to proceed.
The CBP implemented the above to help prevent US-involved businesses that hold a CTPAT certification from engaging in or benefiting from forced labor practices. It also serves to encourage businesses to take steps to prevent forced labor.
Why Should I Hire a Lawyer to Help with my CTPAT Certification or Appeal?
The CTPAT certification process is lengthy and complex. If you successfully obtain CTPAT certification, it can significantly assist your business in growing and becoming a key player in the international trade space. But there are many hurdles to obtaining CTPAT certification, and a misstep can have dire consequences.
CTPAT certification and compliance lawyers are adept in the national security space. They serve as your advocates and help you to complete the application process. If the CBP threatens to suspend or revoke your certification, your lawyer can help you regain eligibility status.
Involving a lawyer early in the process benefits you because the lawyer can familiarize themselves with your business and situation before problems arise. Rather than taking extra time to get to know you and your business, they may be able to begin the process in much less time if you receive a suspension or revocation notice.
Putting your business in the competent and capable hands of an experienced national security lawyer rather than a general practitioner is vital with so much at stake.
Nationwide CTPAT Certification and Compliance Lawyers
If you are applying for CTPAT certification or have received notice of a denial, suspension, or revocation, call our office today at 202-600-4996 to schedule a consultation. Clients praise our firm for our professional and outstanding work on their national security cases. We dedicate ourselves to providing stellar and personalized legal representation to our clients.
Why Choose the National Security Law Firm?
At the National Security Law Firm, each team member has an extensive military and national security law background. We chose to pick one area – national security – and do it well rather than take whatever case walks through the door. This allows us to provide exceptional, pointed, and personalized legal counsel to our clients.
Our team has curated decades of knowledge in this specialized field of practice, helping ensure that we can provide the best advocacy for our clients possible. For example, Brett O’Brien has worked extensively in the intelligence community and encouraged his law school to create the national security curriculum. He has helped dozens of clients successfully navigate the CTPAT process and challenge suspensions and revocations of their certification.
Our team understands how important it is for you to obtain and maintain certification. We are ready to help you accomplish that goal effectively and efficiently.
To schedule a consultation with one of our CTPAT certification and compliance lawyers, call us today at 202-600-4996 or contact us online.