On May 4, 2012, U.S. Customs and Border Protection (CBP) signed a Mutual Recognition Decision (MRD) with the European Union (EU). This is CBP’s sixth Mutual Recognition Arrangement (MRA) to date. The other five MRAs include New Zealand (2007), Canada and Jordan (2008), Japan (2009), and Korea (2010).
The MRD with the EU and its 27 Member States will be implemented in two phases:
Phase I will commence in July of 2012, and it will have two components:
- CTPAT will start to recognize and accept the status of an Authorized Economic Operator (AEO) company in the EU in its overall validation process. If a CTPAT validation visit is necessary as part of your validation or revalidation process, no such visit will need to take place in order for your company to be in the “Certified/Validated” status if that foreign facility is AEO certified. Less redundant validations and a faster validation process are two of the benefits under Mutual recognition. A further benefit is that it will be easier for your company to document to your CTPAT Supply Chain Security Specialist (SCSS) that your business partners comply with the CTPAT program’s securitycriteria because these partners are AEO certified and the US recognizes that foreign program as one compatible to CTPAT by the fact that the US signed a MRA with that country. There will be a period after July 2012 when CTPAT validation visits to AEO members may occur from time to time; the reason for this is that some of these validations have already been scheduled by the CTPAT SCSS and the CTPAT partners. But as the MR Decision matures, redundant validations will be dramatically reduced or eliminated. Only from time to time will CBP conduct a CTPAT validation visit on an AEO certified company in order to ensure that both programs remain compatible.
- CBP will start to recognize AEO shipments as secured shipments in its internal risk management system. As a secured, trusted shipment, AEO shipments will receive a reduction in their risk scores in CBP’s Automated Targeting System (ATS) whether or not that shipment is being imported by a CTPAT importer member. ATS is a state of the art risk management system that CBP has had in operation for many years now; it does not recognize the EU’s EORI number, but it does recognize ashipment’s Manufacturing Identification Number or MID number.
In order to be able to provide this benefit to AEO partners, CBP developed a secure web interface within the CTPAT Portal so that it may collect the AEO members’ MID numbers. Testing on this web interface continues successfully and it should go live by the end of July 2012. Once it goes live, EU AEO’s will be allowed to input their data into the system. All 27 National Customs Administrations within the EU have sent instructions to all of their AEO partners as to what these partnersneed to do should they want their shipments to be recognized by CBP’s targeting system. AEO partners, while recognized by CTPAT as trusted partners, are not CTPAT members; as such, they do not have CTPAT account numbers or Status Verification Interface or SVI numbers.
Just like Importer of Record Numbers (IORs), MID numbers are actually recognized by CBP’s targeting system. This is why the MID number is necessary in order for CBP to provide this benefit to AEO companies. It is important to note that unless their MIDs change over time, EU AEO companies will only have to enter this data into the CTPAT Portal once. For most companies, this will be a once in a lifetime exercise that should take about five minutes to complete; the targeting reduction benefit, however, will last as long as that company remains a certified AEO partner and the MR Decision stands.
PowerPoint instructions to its AEO partners were posted by the EUon the EU website on July 10, 2010: http://ec.europa.eu/taxation_customs/resources/documents/customs/policy_issues/customs_security/c-tpat.pdf
Important: If you are a CTPAT importer sourcing from an AEO certified company in the EU, your AEO supplier does not need to input its MID numbers as the targeting benefit for that shipment from the EU will be applied by CBP’s targeting system to your IOR number. If, however, that supplier also ships to non-CTPAT importers, then they should input the data into the system.
So, for example, if AEO Company A ships to CTPAT importer 1, then AEO Company A does not need to input the data.The CBP targeting benefit is being applied to that shipment’s IOR number.
If AEO Company B, on the other hand, ships to CTPAT Importer 1 and US Importer 2 (not CTPAT), then by all means AEO Company B should input its MIDs into the system.When that shipment arrives in the US, it will receive a targeting benefit through its IOR if its being imported by the CTPAT importer member or through its MID number if it’s being imported by the non-CTPAT member.
Mutual Recognition is based on security only. Only companies in the EU with a security certificate (AEOS) or a full certificate for both security and compliance (AEOF) will enjoy benefits under this Decision.
For Phase I implementation, no action is required by the CTPAT member. If you are a CTPAT importer member, your shipments are currently enjoying a targeting benefit in ATS through your IORs –whether or not you are importing from an AEO company.
As you get closer to a CTPAT validation or revalidation, we do recommend that you inform your Supply Chain Security Specialist that your company is AEO (airlines, sea carriers and certain seaport terminals may belong to both programs) or if your supplier in the EU is AEO certified. Your specialist will take that into account and no validation visit in the EU may need to take place.
Phase II will commence in January 2013. At that point, the EU will need to reciprocate: it will start to recognize CTPAT shipments from those CTPAT importers that also export to the EU. If you are a validated CTPAT importer, your company will receive further instructions from CBP in the near future as to what you need to do to be fully recognized as a trusted partner in each of the countries you export to within the EU.
For additional information on Mutual Recognition, please visit the CTPAT website at www.cbp.gov/ctpat or at
Questions? Please contact CTPAT via the industry partnership mailbox at email@example.com or by telephone at (202) 344-1180.
As always, CTPAT thanks you for your efforts in securing the international supply chain and your support to the CTPAT program.