CTPAT has new requirements regarding supply chain forced labor: PwC

CTPAT has new requirements regarding supply chain forced labor

November 2022

In brief

The Customs Trade Partnership Against Terrorism (CTPAT) Trade Compliance program replaces US Customs and Border Protection’s (CBP) historic Importer Self Assessment (ISA) Program as an enhanced component of the larger voluntary CTPAT Security program. The latter program requires importers to meet all regulatory requirements of CBP and other government entities, maintain evidence of no financial debt to the US government, and meet the annual requirements of the program, which are discussed in depth in the CTPAT Trade Compliance Handbook.

On August 1, 2022, the CTPAT Trade Compliance program announced the addition of six new program requirements regarding the prevention of forced labor within the supply chain. The six forced labor requirements include risk-based mapping, code of conduct, evidence of implementation, due diligence and training, remediation planning, and shared best practices.

In exchange for compliance with the recently updated Trade Compliance program forced labor requirements, the CTPAT Trade Compliance program also announced the addition of three benefits for its Trade Compliance partners.

For prior coverage of developments regarding forced labor, see PwC Tax Insight, USTR releases Section 301 China tariff questionnaire, November 7, 2022.

Action item: Importers whose supply chains could be affected by forced labor should consider joining the CTPAT Security program.

In detail

The new benefits for Trade Compliance program participants are as follows:

“Front of the line” admissibility review: CTPAT Trade Compliance partners that have shipments detained due to forced labor will have their admissibility packages prioritized for review by the appropriate Center of Excellence and Expertise (Center). The importer must assert that it is an active member of the CTPAT Trade Compliance program and request prioritized review when supporting documentation is submitted to CBP. Upon receiving this declaration, the Center is to prioritize the processing of the package above other non-CTPAT Trade Compliance partner packages, to the best of its ability.

Redelivery hold: CTPAT Trade Compliance partners that have shipments arrive at their facility that later are determined to be held due to ties to forced labor, when redelivery is normally requested, may hold their shipments intact at their facility, rather than redelivering the goods to CBP until an admissibility determination is made or until a physical inspection is required.

Detained Withhold Release Order shipments move to bonded facility: CTPAT Trade Compliance partners that have a shipment detained by CBP due to a Withhold Release Order will be allowed to move the goods to a bonded facility to be held intact until an admissibility determination is made by CBP.