For example, in  terms of containers, CBP data indicates that in 2003 about 90 percent of  the world’s cargo moved by container. Therefore, it is vital  for CBP to try to strike a balance between its antiterrorism efforts and  facilitating the flow of legitimate international trade and travel. A key element of this strategy is CBP’s targeting and  inspection of cargo that arrives at U.S. ports. The  extent of review varies, since according to CBP, the large volume of  imports and CBP’s limited resources make it impossible to physically  inspect all containers without disrupting the flow of commerce. C-TPAT is a voluntary program designed to improve  the security of the international supply chain while maintaining an  efficient flow of goods. In return for committing to making  improvements to the security of their shipments by joining the program,   C-TPAT members may receive benefits that result in reduced scrutiny of  their shipments (e.g., reduced number of inspections or shorter border  wait times for their shipments). As table 2  shows, these benefits may reduce the scrutiny of members’ shipments. CBP Grants Benefits before Verification of Security Procedures

CBP has in place a two-pronged process to review members’ qualifications  for program benefits. Second, CBP has in place a vetting process to assess the compliance and  violation history of importers before granting them benefits. Ultimately, however,  neither the certification nor vetting process provides an actual verification  that the supply chain security measures contained in the C-TPAT  member’s security profile are accurate and are being followed before CBP  grants the member benefits. Weaknesses in Process for Verifying Security Procedures

After providing benefits, CBP has a validation process to verify C-TPAT  members’ security measures have been implemented and that program  benefits should continue. Validation Process Lacks Rigor to Achieve Stated Purpose

CBP’s validation process is not rigorous enough to achieve its stated  purpose, which is to ensure that the security procedures outlined in  members’ security profiles are reliable, accurate, and effective. CBP has no written guidelines for its supply chain specialist to indicate  what scope of effort is adequate for the validation to ensure that the  member’s security measures are reliable, accurate, and effective, in part  because it seeks to emphasize the partnership nature of the program. However, CBP has not determined the number of supply chain  specialists it needs or the extent to which validations are needed to  provide reasonable assurance that it is employing a good risk management  approach for the program. Incomplete Progress in Addressing Management Weaknesses

CBP continues to expand the C-TPAT program without addressing  management weaknesses that could hinder the bureau from achieving the  program’s dual goals of securing the flow of goods bound for the United  States and facilitating the flow of trade. CBP Has Finalized Its Strategic Plan

While a draft of this report was with DHS for comment, CBP issued a final  strategic plan for C-TPAT on January 13, 2005. For example, according to the plan there are five goals for the C-TPAT  program:  1.  ensure that C-TPAT partners improve the security of their supply  chains pursuant to C-TPAT security criteria,  2.  provide incentives and benefits to include expedited processing of   C-TPAT shipments to C-TPAT partners,  3. internationalize the core principles of C-TPAT through cooperation  and coordination with the international community,  4.  support other CBP security and facilitation initiatives, and  5. improve administration of the C-TPAT program. CBP Has Not Completed Development of Performance Measures

CBP has told us that it continues developing a comprehensive set of  performance measures and indicators for C-TPAT. However, the weaknesses  in the validation process we found raise questions about its effectiveness. Because of these weaknesses,  CBP’s ability to provide assurance that the program prevents terrorists and  terrorist weapons from entering the United States is limited. Recommendations for Executive Action

To help CBP achieve C-TPAT objectives and address the challenges  associated with its continued development, we recommend that the  Secretary of Homeland Security direct the Commissioner of U.S. Customs  and Border Protection to take the following five actions:    strengthen the validation process by providing appropriate guidance to  specialists conducting validations, including what level of review is  adequate to determine whether member security practices are reliable,  accurate, and effective;    determine the extent (in terms of numbers or percentage) to which  members should be validated in lieu of the original goal to validate all  members within 3 years of certification;    complete the development of performance measures, to include  outcome-based measures and performance targets, to track the  program’s status in meeting its strategic goals;    complete a human capital plan that clearly describes how the C-TPAT  program will recruit, train, and retain sufficient staff to successfully  conduct the work of the program, including reviewing security profiles,  vetting, and conducting validations to mitigate program risk; and  implement a records management system that accurately and timely  documents key decisions and significant operational events, including  a reliable system for (1) documenting and maintaining records of all  decisions in the application through validation processes, including but  not limited to documentation of the objectives, scope, methodologies,  and limitations of validations, and (2) tracking member status. This program goes beyond trade facilitation in that it awards  benefits that can reduce the scrutiny given cargo containers arriving in the  United States. Appendix I: Objectives, Scope, and Methodology

	Objectives

We addressed the following questions regarding the U.S. Customs and  Border Protection’s (CBP, formerly the U.S. Customs Service) Customs- Trade Partnership Against Terrorism (C-TPAT):    What benefits does CBP provide to C-TPAT members? Before providing benefits, what approach does CBP take to determine  C-TPAT members’ eligibility for them? After providing benefits, how does CBP verify that members have  implemented their security measures? To what extent has CBP developed strategies and related management  tools for achieving the program’s goals?
Why GAO Did This Study

This report is a publicly available version of our report on the Customs-Trade Partnership Against Terrorism (C-TPAT). The Department of Homeland Security (DHS) designated our original report as Limited Official Use because of the sensitive and specific nature of the information it contained. U.S. Customs and Border Protection (CBP), the DHS bureau responsible for protecting the nation's borders at and between the official ports of entry, has the dual goals of preventing terrorists and terrorist weapons from entering the United States and also facilitating the flow of legitimate trade and travel. Approximately 90 percent of the world's cargo moves by container. Addressing the threat posed by the movement of containerized cargo across U.S. borders has traditionally posed many challenges for CBP, in particular balancing the bureau's border protection functions and trade enforcement mission with its goal of facilitating the flow of cargo and persons into the United States. CBP has said that the large volume of imports and its limited resources make it impossible to physically inspect all oceangoing containers without disrupting the flow of commerce, and it is unrealistic to expect that all containers warrant such inspection. To address its responsibility to improve cargo security while facilitating commerce, CBP employs multiple strategies. Among these strategies, CBP has in place an initiative known as C-TPAT, which aims to secure the flow of goods bound for the United States by developing a strong, voluntary antiterrorism partnership with the trade community. C-TPAT members commit to improving the security of their supply chain (flow of goods from manufacturer to retailer) and develop written security profiles that outline the security measures in place for the company's supply chain. In exchange for this commitment, CBP offers C-TPAT members benefits for participating that may reduce the level of scrutiny given to their shipments, potentially resulting in a reduced number of inspections of their cargo at U.S. borders. The program is promising, but previous work has raised concerns about its management and its ability to achieve its ultimate goal of improved cargo security. Given our past concerns about the program's effectiveness and in light of the program's rapid expansion, we examined selected aspects of the program's operation and management. This report addresses the following issues: (1) What benefits does CBP provide to C-TPAT members? (2) Before providing benefits, what approach does CBP take to determine C-TPAT members' eligibility for them? (3) After providing benefits, how does CBP verify that members have implemented their security measures? and (4) To what extent has CBP developed strategies and related management tools for achieving the program's goals?

What GAO Found

In return for committing to making improvements to the security of their shipments by joining the program, C-TPAT members receive a range of benefits that reduce the level of scrutiny CBP provides to their shipments bound for the United States. These benefits may change the risk characterization of their shipments, thereby reducing the probability of extensive documentary and physical inspection. Other benefits include access to FAST lanes on the Canadian and Mexican borders, expedited cargo processing at FAST lanes, and an emphasis on self-policing and self-monitoring of security activities. In addition, CBP grants benefits to C-TPAT members that do not directly affect the level of scrutiny given to their shipments. Before providing benefits, CBP uses a two-pronged approach to assess C-TPAT members. First, CBP has a certification process to review the self-reported information contained in applicants' membership agreements and security profiles. Second, CBP has in place a vetting process to try to assess the compliance with customs laws and regulations and violation history of and intelligence data on importers before granting them benefits. CBP believes that this two-pronged approach provides adequate assurance before granting benefits. However, this approach grants benefits to members before they undergo the validation process. After providing benefits, CBP has a validation process to verify that C-TPAT members' security measures have been implemented and that program benefits should continue. However, we found several weaknesses in the validation process that compromise CBP's ability to provide an actual verification that supply chain security measures in C-TPAT members' security profiles are accurate and are being followed. First, the validation process is not rigorous enough to achieve its stated purpose, which is to ensure that the security procedures outlined in members' security profiles are reliable, accurate, and effective. Related to this, CBP has no written guidelines for its supply chain specialists to indicate what scope of effort is adequate for the validation to ensure that the member's measures are reliable, accurate, and effective. In addition, CBP has not determined the extent to which validations are needed. While CBP has recently completed a strategic plan, we found weaknesses in some of the tools it uses to manage the program that could hinder the bureau in achieving the program's dual goals of securing the flow of goods bound for the United States and facilitating the flow of trade. CBP's new strategic plan appears to provide the bureau with a general framework on which to base key decisions, including key strategic planning elements such as strategic goals, objectives, and strategies. However, CBP still lacks a human capital plan, a fact that has impaired its ability to manage its resources. Furthermore, CBP still has not developed a comprehensive set of performance measures and indicators, including outcome-based measures, to monitor the status of program goals. Finally, the C-TPAT program lacks an effective records management system.