Announcement of Trusted Trader Program Test, 34334-34340 [2014-13992]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• Customs and Border Protection

[Federal Register Volume 79, Number 115 (Monday, June 16, 2014)]
[Notices]
[Pages 34334-34340]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-13992]


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DEPARTMENT OF HOMELAND SECURITY

Customs and Border Protection


Announcement of Trusted Trader Program Test

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: General notice.

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SUMMARY: This document announces that U.S. Customs and Border 
Protection (CBP), in collaboration with the U.S. Consumer Product 
Safety Commission (CPSC) and the U.S. Food and Drug Administration 
(FDA), will begin the testing of the Trusted Trader program--a new 
program that will streamline the process through which importers can 
establish to CBP that they strive to secure their supply chains and 
strengthen their internal controls for compliance with the existing 
laws and regulations administered or enforced by CBP. The goals of the 
Trusted Trader program will be to: Achieve integrated U.S. government 
collaborations that result in enhanced efficiencies leading to a 
reduction in government-wide resource expenditures; enhance information 
sharing between government agencies; lower the administrative cost of 
participants by streamlining the application and validation process; 
and increase the efficiencies in the existing trade programs. The 
Trusted Trader program will strengthen security, identify low-risk 
trade entities, and increase overall efficiency of trade, by segmenting 
risk and processing by account. This test of the Trusted Trader program 
aims to move toward a whole of government approach to supply chain 
security and trade compliance by strengthening government collaboration 
between CBP and FDA and between CBP and CPSC. CBP seeks to encourage 
entities through incentives not currently available to members 
participating in both Customs-Trade Partnership Against Terrorism (C-
TPAT) and Importer Self-Assessment (ISA) to secure their supply chains 
and strengthen their internal controls for compliance with the existing 
laws and regulations administered or enforced by CBP.

DATES: Applications for participation in the test may be submitted 
beginning June 16, 2014. The selection of initial test participants 
will begin no later than July 16, 2014. Selected applicants will be 
notified individually of their participation date.

ADDRESSES: To submit comments concerning this test program: Send an 
email to TrustedTrader@cbp.dhs.gov. In the subject line of an email, 
please use, ``Comment on Trusted Trader Program Test.''
    To apply to participate, send an email to 
TrustedTrader@cbp.dhs.gov. In the subject line of an email, please use, 
``Trusted Trader Program Test Application.'' The email must include: 
The name and point of contact information of an individual (including 
the direct dial phone number and email address) who is employed by the 
business interested in participating in the test; and the business' 
importer of record (IOR) number(s).

FOR FURTHER INFORMATION CONTACT: Michael Maricich, Partnership Branch 
Chief of the Automotive and Aerospace CEE, Office of Field Operations, 
at (562) 366-5455; Valarie Neuhart, Cargo Conveyance Security, Office 
of Field Operations, at (202) 344-2511; or Florence Constant-Gibson, 
Commercial Operations, Office of International Trade, at (202) 863-
6537.

SUPPLEMENTARY INFORMATION: 

Background

    Currently, companies may participate in the Customs--Trade 
Partnership Against Terrorism (C-TPAT) program, which focuses on 
companies securing their supply chains, and the Importer Self-
Assessment (ISA) program, which provides incentives to companies that 
can demonstrate to CBP that they have strong internal controls to 
comply with the laws and regulations administered or enforced by CBP. 
To participate in ISA, companies must participate in C-TPAT. Members of 
ISA may also participate in the Importer Self-Assessment-Product Safety 
Pilot (ISA-PS), which focuses on product safety and compliance with CBP 
and CPSC laws and regulations.
    This document announces CBP's plan to unify the C-TPAT and ISA 
programs under a new test program called the Trusted Trader program.

I. Customs-Trade Partnership Against Terrorism Program

    The C-TPAT program is a voluntary government-business initiative to 
build cooperative relationships that strengthen and improve overall 
international supply chain and U.S. border security. CBP encourages 
participation by providing incentives to participants meeting or 
exceeding the program requirements. As a result, the program helps CBP 
achieve its twin goals of improving security while facilitating the 
flow of global trade. The Security and Accountability for Every Port 
Act (SAFE Port Act) of 2006 (see 6

[[Page 34335]]

U.S.C. 961 et seq.) codified C-TPAT and established procedures for the 
certification and validation of C-TPAT partners.
    Businesses eligible to apply for C-TPAT membership include U.S. 
importers of record; U.S./Canada highway carriers; U.S./Mexico highway 
carriers; air, rail and sea carriers; licensed U.S. customs brokers; 
U.S. marine port authority/terminal operators; third party logistics 
providers; U.S. freight consolidators; ocean transportation 
intermediaries and non-vessel operating common carriers (NVOCCs); 
Mexican and Canadian manufacturers; and Mexican long-haul highway 
carriers. C-TPAT importers enjoy certain incentives based on their tier 
status within a three tier structure. Tier I incentives are afforded to 
those importer partners that have been certified; Tier II level to 
those that have been certified and validated; and Tier III incentives 
to those that have exceeded the program's requirements and exhibit best 
practices.
    Upon satisfactory completion of the C-TPAT application and supply 
chain security profile, the applicant company is assigned a C-TPAT 
Supply Chain Security Specialist (SCSS) to review the submitted 
materials and to provide program guidance on an on-going basis.
    The C-TPAT program will then have up to 90 days to certify the 
company into the program or to reject the application. If certified, 
the company will be validated within a year of certification.
    C-TPAT seeks to safeguard the world's vibrant trade industry from 
terrorists, maintaining the economic health of the United States and 
its neighbors. The partnership develops and adopts measures that add 
security but do not have a chilling effect on trade.
    C-TPAT affords its importer partners many incentives, including a 
reduced examination rate. While examination rates have increased 
significantly since 2001 on all cross border movements, C-TPAT import 
partners continue to be examined at a considerably lower rate than non-
C-TPAT partners. Other incentives afforded to importer partners by the 
C-TPAT program include:
    (a) Access to the Free and Secure Trade (FAST) Lanes--Expedited 
border crossing privileges are granted to those C-TPAT highway carrier 
partners who are certified/validated. FAST lanes are dedicated lanes to 
C-TPAT partners at many Canada/Mexico land border ports of entry. C-
TPAT highway carrier partners view the FAST lanes as a substantial 
benefit as the use of these lanes saves them considerable time in 
crossing the border. Moreover, since FAST highway carriers are 
transporting cargo from C-TPAT importers, these shipments are 
considered low risk and are therefore subject to lower examination 
rates;
    (b) Exemption From Stratified Exams for importer partners--C-TPAT 
Tier III importer partners and C-TPAT Tier II importer partners that 
also participate in the ISA program are exempt from stratified exams;
    (c) Front of the Line--C-TPAT shipments subject to examination 
receive ``front of the line'' treatment. To the extent possible and 
practicable, C-TPAT shipments are moved ahead of any non-C-TPAT 
shipments. This can translate into substantial monetary savings, since 
C-TPAT shipments will not have to wait as long in line for an 
examination;
    (d) Business Resumption--In the event of a significant disruption/
delay in CBP cargo processing operations, actions are taken to maintain 
communication and coordination with C-TPAT partners and foreign 
government stakeholders for business resumption; and
    (e) Penalty mitigation offered for the late submission of data 
required under the Importer Security Filing requirements.

II. Importer Self-Assessment Program

    The ISA program is a joint government-business initiative designed 
to build cooperative relationships that strengthen trade compliance. 
ISA is based on the premise that companies with strong internal 
controls achieve the highest level of compliance with customs laws and 
regulations. On June 17, 2002, the former U.S. Customs Service (now 
U.S. Customs and Border Protection (CBP)) published in the Federal 
Register (67 FR 41298) a notice announcing the ISA program and 
describing the requirements for participation in and incentives under 
the program. The requirements for participation in the ISA program 
remain as described in the 2002 Notice, except that the program has 
since been expanded to accept Canadian as well as U.S. importers. See 
77 FR 61012 (October 5, 2012). To apply for ISA, the applicant must 
provide the importer's name; unique importer number(s); a signed ISA 
Memorandum of Understanding (MOU); a completed ISA questionnaire along 
with support documentation; and a risk-based self-testing plan.
    On October 5, 2012, CBP published in the Federal Register (77 FR 
61012) a notice that expanded the ISA program by creating an expedited 
path to ISA membership for importers who successfully have undergone a 
CBP Focused Assessment (FA) audit and were deemed an acceptable risk to 
CBP. The FA to ISA transition opportunity allows these acceptable risk 
importers to transition into the ISA program without further CBP review 
within twelve (12) months from the date of the FA Report wherein 
Regulatory Audit, Office of International Trade, has determined the 
company represents an acceptable risk to CBP. FA is a comprehensive 
audit process through which Regulatory Audit determines whether a 
company's import activities represent an acceptable risk to CBP. An 
assessment is performed of the company's organizational structure and 
its system of internal control over import activities, to ensure 
compliance with applicable customs laws and regulations. Importers 
seeking to transition into ISA through this opportunity must also meet 
the following ISA eligibility requirements: They must be a U.S. or 
Canadian resident importer; they must be C-TPAT partners or apply for 
C-TPAT membership and become certified; they must develop a risk-based 
self-testing plan; and they must agree to meet all of the ISA program 
requirements.
    The ISA-PS is a joint initiative among CBP, CPSC and importers who 
commit to maintain a high level of product safety compliance and strive 
to prevent the importation of unsafe products. It is an expansion of 
the ISA program and is jointly administered by CBP and CPSC. The ISA-PS 
pilot was announced on October 29, 2008, in the Federal Register (73 FR 
64356). The notice established the parties' intent to enter into a 
collaboration recognizing import safety compliance. Eligible ISA-PS 
pilot participants must be active ISA members and comply with all ISA 
requirements and obligations.
    A joint CBP and CPSC working group currently is evaluating the ISA-
PS pilot as described in the October 29, 2008 Federal Register notice 
(73 FR 64356) and is expected to convey recommendations in 2014. If 
based on CPSC review of the recommendations of the CBP/CPSC working 
group a decision is made to change or terminate the ISA-PS pilot, a 
notice will be published in the Federal Register.

III. Trusted Trader Program Test

    This document announces CBP's plan to unify the C-TPAT and ISA 
programs under a new test program called the Trusted Trader program. 
CBP's coordination with CPSC and FDA helps to achieve the goals of the 
Trusted Trader program which will be to: Achieve integrated U.S. 
government

[[Page 34336]]

collaborations that result in enhanced efficiencies leading to a 
reduction in government-wide resource expenditures; enhance information 
sharing between government agencies; lower the administrative cost of 
participants by streamlining the application and validation process; 
and increase the efficiencies in the existing trade programs. The 
Trusted Trader program will strengthen security, identify low-risk 
trade entities, and increase overall efficiency of trade, by segmenting 
risk and processing by account. Leveraging the Centers of Excellence 
and Expertise (Centers) to manage trusted trader accounts from an 
industry perspective will contribute to the overall effectiveness, 
bring a high level of industry product knowledge, and further refine 
account-based processing. It will address specific threats and enable 
risk based analysis. This test of the Trusted Trader program aims to 
move toward a whole of government approach to supply chain security and 
trade compliance by strengthening government collaboration between CBP 
and FDA and between CBP and CPSC. The Trusted Trader program, as 
envisioned, will align with Authorized Economic Operator programs which 
focus on a combined trade and security compliance model implemented by 
other countries around the world. CBP seeks to encourage companies, 
through additional incentives not currently available to C-TPAT and ISA 
members, to secure their supply chains and strengthen their internal 
controls for compliance with the existing laws and regulations 
administered or enforced by CBP. CBP notes that companies still have 
the option to apply for, or continue participating exclusively in, C-
TPAT. In addition, importers may continue to apply for ISA and the ISA-
PS pilot programs.
    Importers who meet the eligibility criteria of the Trusted Trader 
program test and wish to participate must submit an email as described 
below in this document. The Trusted Trader program application, which 
only provisionally selected test applicants will be required to 
complete, contains two parts: One part contains questions concerning 
supply chain security (C-TPAT related questions) and the second part 
contains questions concerning the company's trade compliance process, 
procedures and internal controls (ISA related questions) and product 
safety compliance (ISA-PS related questions) when applicable. 
Provisionally selected test applicants who are already C-TPAT members 
will not be required to complete the first part of the application. 
However, provisionally selected test applicants who are not current C-
TPAT members will be required to complete the entire application.
    Companies whose Trusted Trader program application is reviewed and 
approved by CBP to become a partner in the Trusted Trader program test 
will begin to receive the incentives currently provided to C-TPAT 
(depending on the particular C-TPAT Tier into which they are accepted) 
and ISA members, as well as additional incentives.
    If the applicant concurrently applies for the Product Safety 
portion of the Trusted Trader Program test, the additional application 
materials will be reviewed and approved jointly by CPSC and CBP and the 
successful applicant will be eligible to receive benefits from CPSC. 
Those benefits are listed in Section III. A. of this document.

A. Trusted Trader Program Test Incentives

    The incentives for participating in the Trusted Trader program test 
are listed below:
     The incentives currently provided to C-TPAT importers, as 
discussed in Section I of this document.
     The incentives currently provided under the ISA program, 
as listed in a notice published in the Federal Register (77 FR 61012) 
on October 5, 2012.
     Program participants will benefit from a reduced FDA 
targeting/examination risk score. The incentive will be predicated on 
the test participants' importation of FDA regulated goods, and the 
participants' agreement to allow CBP to share C-TPAT certification 
status with FDA.
     As part of a CBP penalty mitigation decision, test 
participants may receive a penalty offset upon request. If approved, 
penalty offsets may result in receiving credit towards their penalty 
liability as a result of implementing enhanced security and trade 
compliance measures.
     Trusted Trader program test participants who also 
participate in the Reconciliation Prototype (78 FR 27984), will be 
allowed to flag and unflag entries for reconciliation retroactively 
after the entry summary is filed up to 60 days prior to the date for 
which liquidation of the underlying entry summary has been set. This 
would include retroactive flagging for the following four reconcilable 
issues, or ``flag types:'' (1) Value; (2) classification (only if under 
protest or subject to a court case); (3) 9802, Harmonized Tariff 
Schedule of the United States (HTSUS); and (4) the post importation 
claims made pursuant to free trade agreements. Currently, under the 
Reconciliation Prototype, test participants who file entries in the 
Automated Commercial System (ACS) or the Automated Commercial 
Environment (ACE) may ``flag'' the underlying entries at the time of 
filing via an Automated Broker Interface (ABI) indicator, which serves 
as the notice of intent to file a reconciliation. Reconciliation 
Prototype participants who file entries in ACS and find that a large 
majority of their entry summaries require flagging, may provide their 
notice of intent to file a reconciliation by filing a ``blanket 
application'' in lieu of entry-by-entry flags. The blanket application 
results in the automatic flagging of all entry summaries for a 
specified period. Under the current Reconciliation Prototype, the 
blanket application must be received by CBP not later than seven (7) 
working days prior to transmission of the first entry subject to the 
reconciliation. Importers participating in the Reconciliation Prototype 
and joining in this test of the Trusted Trader program, may file the 
notice of intent to file a reconciliation after filing the entry 
summary up to 60 days prior to the date for which liquidation of the 
underlying entry summary has been set. The ``blanket application'' 
option under this incentive is only available to importers 
participating in both tests and filing in ACS. CBP will publish a 
separate Federal Register notice to announce this modification to the 
Reconciliation Prototype for Trusted Trader program test participants.
     CBP will reduce the number of Foreign Trade Zone (FTZ) on-
site inspections.
     Drawback claimants will be exempt from on-site visits from 
Drawback Specialists.
     Full desk reviews, conducted pursuant to 19 CFR 191.61, 
will be limited to no more than one (1) per year for drawback 
claimants.
     CBP will exempt test participants from random Non-
Intrusive Inspections (NIIs). Trusted Trader program test participants 
will have the opportunity to ``opt-out'' of this incentive entirely or 
identify the ports wherein the test participant wants this incentive 
applied. CBP reserves the right to conduct NIIs as appropriate for 
operational reasons.
     Where a Chemical Abstracts Service (CAS) number is 
required pursuant to 19 CFR 141.89 for a chemical compound classified 
in Chapters 27, 28, and 29 of the HTSUS, CBP will allow a quarterly 
submission of the CAS number, the use, and the description for the 
chemical compound in advance of the calendar year quarter. The 
description on the

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quarterly list must contain the CAS number, the use, and the 
description for the chemical compound. The applicable invoice will also 
need to contain a chemical compound description (in accordance with the 
requirements in 19 CFR 141.86). The chemical compound description found 
in the quarterly list and the description found on the invoice will 
need to be identical for each chemical compound so that CBP can link 
the CAS number to the entered product.
     CBP will process Post-Entry Amendments (PEA) on 
unliquidated entries within a ninety (90)-day timeframe.
     In consultation with CBP, in the post-release environment, 
test participants may have the ability to choose an exam location, 
other than the port of arrival, that contains accommodations CBP 
considers amenable for a thorough exam. Examinations identified prior 
to release which have extenuating circumstances would be considered by 
CBP for exam at an alternate exam location within the port of arrival 
limits. Other than the exemptions created by this incentive, no other 
aspects of 19 CFR Part 151 are waived.
     If a test participant who is an importer of record files 
an entry in ACE or ACS for merchandise arriving by vessel in multiple 
containers and a portion but not all of the merchandise covered by that 
entry is selected for examination, the test participant will receive a 
release message and will be allowed to take possession of all 
merchandise except the merchandise subject to further examination. ACE 
and ACS entries filed in ABI will receive an electronic notification of 
the release. The test participant will be required to file the entry 
summary and pay the estimated duties on all merchandise covered by the 
entry within the period prescribed by law. Any changes necessary to the 
entry summary filing because of the results of the examination must be 
corrected by a Post-Summary Correction (PSC) (if an ACE entry) or via a 
PEA if an ACS entry. This incentive will not be available on any entry 
where the decision about admissibility of a product resides with a 
government agency other than CBP. This incentive also will not be 
available for any shipments that arrive to the customs territory of the 
United States by conveyances other than vessel.
    For a test participant who completes the Product Safety portion of 
the Trusted Trader application, if CPSC and CBP jointly approve, the 
following additional Product Safety incentives will be provided:
     CPSC will provide the participants with a product-specific 
CPSC point of contact who can assist in providing National Electronic 
Injury Surveillance System (NEISS) Product Codes for entry lines.
     CPSC will provide access to the participants with special 
training concerning product safety compliance, internal controls, and 
CPSC audit trails.
     CPSC will allow the participants the opportunity to apply 
for external participation coverage of multiple business units 
(multiple IOR numbers).
     CPSC will consider expansion of benefits to all products 
of approved participants if the entry line(s) contains all the 
applicable NEISS product code(s).
     CPSC will reduce product safety tests on goods imported by 
the participants.
     CPSC laboratories will grant priority ``front of the line 
testing'' to participants when product safety testing is conducted.
     CPSC may allow products to be destroyed by participants in 
lieu of requesting redelivery to CBP of the product.
     Additional benefits tailored to specific industry needs 
may later become available.

B. Test Participant Roles and Responsibilities

    Trusted Trader program test participants will be required to:
     Agree to comply with applicable CBP laws and regulations, 
except for the regulatory requirements explicitly waived in this 
document;
     Agree to comply with applicable CPSC and FDA laws and 
regulations;
     Complete a Trade Compliance Questionnaire;
     Submit a copy of the company's customs policies and 
procedures;
     Make relevant importation records (i.e., those records and 
documents listed in the Appendix to 19 CFR Part 163, commonly known as 
the ``(a)(1)(A) list'') available to substantiate compliance with trade 
laws for CBP to review;
     Perform annual risk assessments to identify risks that 
could impact compliance with CBP laws and regulations;
     Develop and execute an annual self-testing plan based on 
risk and implement corrective action in response to errors and internal 
control weaknesses disclosed by self-testing:
    [cir] Maintain results of testing for five (5) years and make test 
information available to CBP upon request;
     Develop, document, and implement a system of internal 
control designed to provide reasonable assurance of compliance with CBP 
laws and regulations:
    [cir] Make appropriate adjustments to internal controls; and
    [cir] Maintain an audit trail from financial records to CBP 
declarations, or an alternate system that ensures accurate values are 
reported to CBP;
     Make appropriate prior disclosures, PEAs, and/or PSCs;
     Notify the Trade Compliance Branch, Office of Field 
Operations, TrustedTrader@cbp.dhs.gov of major changes to the company's 
corporate structure through reorganization, merger, acquisition, etc. 
Such notification must be made prior to or upon the affected date of 
the change by way of formal correspondence in the C-TPAT portal system;
     Notify the CBP SCSS of any suspicious activities, 
anomalies, and/or security breaches that affect the test participant's 
supply chain;
     Notify its SCSS and National Account Manager (NAM) prior 
to or immediately of any major changes that may affect the partner's 
security to include change in ownership of the company or sourcing from 
a new country;
     Submit an Annual Notification Letter (ANL) and an Annual 
Security Profile Review to CBP. Once accepted and established in the 
Trusted Trader program test, the importer may submit an ANL and an 
Annual Security Profile Review to CBP simultaneously. If a trusted 
partner's C-TPAT certification date is different than the date the 
partner submits its ISA ANL (i.e. the importer joined the Trusted 
Trader program test as a C-TPAT member), the trusted partner may 
synchronize these dates if it chooses to do so by sending an email 
requesting such to TPPB-ISA@dhs.gov. The Annual Security Profile Review 
submission will remain unchanged, requiring the member to update the 
member's security profile. However, the ANL will be streamlined and 
will require a summary of the following:
    [cir] Organizational changes (e.g., mergers, acquisitions, 
divestures) and/or additions/deletions of importer of record numbers 
from the Trusted Trader program test participants;
    [cir] Personnel changes that could have an effect on the department 
responsible for import compliance;
    [cir] Changes in import activity (e.g., changes in the types of 
commodities imported, countries of sourcing/manufacturing, special 
trade programs being claimed, and brokers utilized);
    [cir] Changes to internal control policies and procedures;

[[Page 34338]]

    [cir] Risk assessment and self-testing results to include action 
taken to correct deficiencies; and
    [cir] A summary of any PEAs, PSCs, and prior disclosures made to 
CBP.
     Provide CBP with the name and contact information for the 
company's Compliance Officer;
     Commit to working with business partners and CBP to 
maintain the C-TPAT supply chain security criteria as outlined in the 
C-TPAT Importer Security Criteria found on the CBP Web site at: https://www.cbp.gov/sites/default/files/documents/importer_security_profile_overview_3.pdf;
     Provide complete and accurate company information in 
response to C-TPAT and ISA inquiries and respond to these inquiries in 
a timely manner;
     Comply with C-TPAT program requirements to ensure 
integrity at each stage of the test participant's supply chain;
     Cooperate with the C-TPAT validation and re-validation 
processes including assisting the CBP SCSS in planning for and 
conducting validations and re-validations to include site visits at 
domestic and foreign locations (if applicable);
     Maintain security integrity throughout the supply chain, 
conducting periodic self-assessments in line with the changing risks 
and complexity of international business and trade;
     Cooperate with CBP, domestic and foreign port authorities, 
foreign customs administrations and others in the trade community, in 
advancing the goals of C-TPAT and the Container Security Initiative 
(CSI);
     Create and provide CBP with a C-TPAT supply chain security 
profile, which identifies how the importer of record (IOR) will meet, 
maintain, and enhance internal policy to meet the C-TPAT importer 
security criteria; and
     Undergo a trade compliance review meeting, if deemed 
necessary by CBP, to ensure that the test participant is maintaining 
and updating trade compliance procedures and meeting the program 
requirements.
     If the applicant concurrently applies for the Product 
Safety portion of the Trusted Trader program test, Trusted Trader 
program test participants will also be required to:
    [cir] Agree to comply with all laws and regulations administered by 
CPSC;
    [cir] Complete a Product Safety questionnaire;
    [cir] Maintain an internal control system that ensures the 
integrity of product safety;
    [cir] Include the Product Safety point of contact information in 
the Annual Notification Letter (ANL) submitted to CBP;
     Participants importing FDA regulated goods agree to allow 
CBP to share participant C-TPAT certification status with FDA in order 
to receive FDA incentives.

C. Eligibility Requirements for Test Participants

    To be eligible to apply for the Trusted Trader program test, the 
applicant must meet the following criteria:
     Be an active U.S. importer or Non-Resident Canadian 
Importer who meets the requirements set forth in 19 CFR Part 141, 
including in particular, sections 141.17 and 141.18 (19 CFR 141.17-
141.18);
     Have written policies and procedures pertaining to its 
import process;
     Have a business office staffed in the United States or 
Canada;
     Have an active Importer of Record (IOR) number or a CBP-
assigned number;
     Possess a valid continuous importation bond filed with 
CBP;
     Have at least two (2) years of importing history before 
the date that the application for the test program is submitted;
     Conduct an assessment of its supply chain based on C-
TPAT's security criteria for importers including:
    [cir] Business partner requirements;
    [cir] Container security;
    [cir] Physical security and access controls;
    [cir] Personnel security;
    [cir] Procedural security;
    [cir] Security training and threat awareness; and
    [cir] Information technology security;
     Implement and maintain security measures and supply chain 
security practices meeting security criteria established in the C-TPAT 
Importer Security Criteria document;
     Have a designated company officer who will be the primary 
cargo security officer responsible for C-TPAT;
     Create and provide CBP with a C-TPAT security profile, 
which identifies how the importer meets C-TPAT's Importer Security 
Criteria;
     Maintain books and records to establish compliance with 
the laws and regulations administered or enforced by CBP, including but 
not limited to, records sufficient to ascertain the correctness of any 
entry and to determine the duties, taxes and fees that may be due; and
     Applicants requesting consideration for the Product Safety 
potential incentives listed in Section III. A. of this document must 
concurrently complete the Product Safety portion of the Trusted Trader 
Program application.
    At this time, the Trusted Trader program test is not open to 
current ISA partners.

D. Completion of the Trusted Trader Program Test

    After the test period is over, if CBP decides to implement the 
Trusted Trader program, CBP will transition all existing ISA partners 
into the Trusted Trader program and will discontinue the ISA program. 
ISA partners will be given an opportunity to ``opt-out'' of being 
transitioned into the Trusted Trader program. CBP will announce any 
such changes in the Federal Register. If CBP decides to implement the 
Trusted Trader program after the test period, CPSC will consider 
continuation of the Product Safety portion of the Trusted Trader 
program and any changes, including termination, will be announced in 
the Federal Register.

E. Suspension of Certain CBP Regulations Under the Test

    For purposes of this test, the following title 19 (19 CFR) 
regulations will be waived, to the extent described, for test 
participants:
     Section 141.89 (Additional information for certain classes 
of merchandise) will be waived only as to waive the requirement to 
submit the use and CAS number on each invoice for chemical compounds 
classified in Chapters 27, 28, and 29, HTSUS. Instead, CBP will allow a 
quarterly submission of the CAS number, the use, and the description 
for the chemical compound before the calendar year quarter. The 
description on the quarterly list must contain the CAS number, the use, 
and the description of the chemical compound. The applicable invoice 
also must contain a chemical compound description (in accordance with 
the requirements in 19 CFR 141.86). The chemical compound description 
found in the quarterly list and the description found on the invoice 
must be identical for each chemical compound so that CBP can link the 
CAS number to the entered product; and
     Section 151.6 (Place of examination) will be waived only 
insofar as allowing all non-security related examinations to occur at 
an exam location of the test participant's choosing. The chosen exam 
location must contain accommodations amenable to a thorough exam. The 
importer will still bear any expense involved in preparing the 
merchandise for CBP examination and in closing the packages. In 
addition, all of the

[[Page 34339]]

applicable sections of 19 CFR Part 151 will continue to apply.

IV. Timeline for the Test

    This test is intended to last eighteen (18) months from June 16, 
2014. Additionally, at the conclusion of the test, CBP will assess the 
effect that the Trusted Trader program has had on improving trade 
facilitation, lowering the cost of becoming a trusted partner, and 
ensuring importers' compliance with applicable laws and regulations. 
CBP plans to publish a notice when the test closes.

V. Application Process

    Importers who meet the eligibility criteria of this test and wish 
to participate must submit an email to TrustedTrader@cbp.dhs.gov. In 
the subject line of the email, please use, ``Trusted Trader Program 
Test Application.'' The email must include: The name and point of 
contact information of an individual (including the direct dial phone 
number and email address) who is employed by the business interested in 
participating in the test; and the business' importer of record (IOR) 
number(s).
    Only businesses that meet the eligibility criteria provided in this 
document are invited to apply for participation.

VI. Selection Criteria for Voluntary Participants

    CBP will limit the Trusted Trader program test to fewer than ten 
(10) participants. Test applicants must meet the eligibility criteria 
described in this document to participate in the test program.
    Specifically, CBP is looking for test participants to include at 
least:
     One (1) or more importers currently participating in C-
TPAT;
     One (1) or more importers not currently participating in 
any CBP partnership programs; and
     One (1) or two (2) participants who have imports monitored 
by CPSC and FDA.

VII. Processes for Selected Applicants

    CBP will send an email notification to all importers who requested 
to participate in the test informing them whether they have been 
provisionally selected to participate in the Trusted Trader program 
test. Provisionally selected test applicants who are current C-TPAT 
members will be provided the trade compliance portion of the 
application via an electronic document containing the trade compliance 
questions. They will be asked to complete the form electronically and 
to upload the form via the C-TPAT Security Link Portal (hereafter 
referred to as the ``C-TPAT Portal''), or submit the form via email to 
TrustedTrader@cbp.dhs.gov.
    Provisionally selected test applicants who are not current C-TPAT 
members will be provided a link to the C-TPAT Portal Web site to 
complete the security portion of the application and will be provided 
the trade compliance portion of the application via an electronic 
document containing the trade compliance questions. Provisionally 
selected test applicants will be asked to complete the security portion 
of the application electronically and upload the application via the C-
TPAT Portal, or submit the application via email to: 
TrustedTrader@cbp.dhs.gov.
    Once automation enhancements are made to the C-TPAT Portal, CBP 
will be able to accept simultaneously both the security and trade 
compliance portions of the application via the C-TPAT Portal.
    CBP will begin to review the application within thirty (30) days of 
receipt. CBP will assign a NAM and an SCSS to the provisionally 
selected test applicant, if one is not already assigned, and CBP will 
verify the applicant's eligibility for participation in the program.
    Provisionally selected test applicants, who have completed and 
submitted the required portions of the Trusted Trader program 
application, will be notified in writing whether they have been 
certified into or denied entry in the test program within ninety (90) 
days of submitting their application to CBP. The notification will 
indicate the date upon which the Trusted Trader program test partner 
will begin to receive the program incentives. Selected participants may 
have different starting dates.
    During the validation process, a site visit will be conducted by 
CBP to the applicant's domestic headquarters and/or points of 
importation or deconsolidation of imports. The site visit will verify 
the company's security and trade compliance. This verification may last 
one (1) to two (2) business days. Foreign validations may also be 
conducted by multidisciplinary teams under certain circumstances.
    Provisionally selected test applicants who are denied participation 
for the Trusted Trader program test will receive a written notification 
with a reason for the denial from CBP.

VIII. Legal Authority for General Testing

    Section 101.9(a) of the CBP regulations (19 CFR 101.9(a)) allows 
CBP to conduct a test program or procedure to evaluate the 
effectiveness of operational procedures regarding the processing of 
passengers, vessels, or merchandise by imposing requirements different 
from those specified in the CBP regulations but only to the extent that 
such different requirements do not affect the collection of the 
revenue, public health, safety, or law enforcement. This test is 
established pursuant to 19 CFR 101.9(a) to test the effectiveness of 
new operational procedures.

IX. Misconduct Under the Test

    A test participant may be subject to civil and criminal penalties, 
administrative sanctions, liquidated damages, and/or discontinuance 
from participation in this test for any of the following:
     Failure to follow the terms and conditions of this test;
     Failure to exercise reasonable care in the execution of 
participant security and trade compliance obligations;
     Failure to abide by applicable laws and regulations that 
have not been waived;
     Failure to deposit duties or fees in a timely manner; and
     Knowingly providing false or misleading information.
    Suspension from or revocation of membership in C-TPAT will result 
in discontinuance from participation in the Trusted Trader program 
test.
    If the Commissioner, or his designee, finds that there is a basis 
for discontinuance of test participation privileges, the test 
participant will be provided a written notification of the 
discontinuance. The test participant will be offered the opportunity to 
appeal the decision in writing within ninety (90) calendar days of the 
date of the written notice. The appeal must be submitted to Trusted 
Trader Program Appeals, U.S. Customs and Border Protection, 1300 
Pennsylvania Ave. NW., Suite 2.3D, Washington, DC 20229. The Secretary 
of the U.S. Department of Homeland Security, or his designee, will 
issue a decision in writing on the proposed action within one-hundred 
eighty (180) calendar days after receiving a timely-filed appeal from 
the test participant. If no timely appeal is received, the proposed 
notice becomes the final decision of the Agency as of the date that the 
appeal period expires.
    In the case of a test participant knowingly providing false or 
misleading information to CBP during the validation process, the 
Commissioner, or his designee, will immediately suspend or expel the 
participant for an

[[Page 34340]]

appropriate period of time. The test participant will be offered the 
opportunity to appeal the decision within thirty (30) calendar days of 
the date of the decision providing for immediate suspension or 
expulsion. The appeal must be submitted to Trusted Trader Program 
Appeals, U.S. Customs and Border Protection, 1300 Pennsylvania Ave. 
NW., Suite 2.3D, Washington, DC 20229. The immediate discontinuance 
will remain in effect during the appeal period.
    The Secretary, or his designee, will issue a decision in writing on 
the discontinuance within one-hundred eighty (180) calendar days after 
receiving a timely filed appeal from the test participant. If no timely 
appeal is received, the notice becomes the final decision of the Agency 
as of the date that the appeal period expires.

    Dated: June 11, 2014.
R. Gil Kerlikowske,
Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2014-13992 Filed 6-13-14; 8:45 am]
BILLING CODE 9111-14-P