Recent Trade & Tariff Perspectives

August 17, 2022  |  Anahi Czeszewski  Product Development Manager

Customs Trade Partnership Against Terrorism Program—New Forced Labor Requirements

Recently in July, U.S. Customs and Border Protection (CBP) released its Customs Trade Partnership Against Terrorism (CTPAT) Trade Compliance Handbook. The handbook “provides an overview of the major changes and improved industry benefits that have led to the modernization of CTPAT’s Trade Compliance program and detailed instructions for applying and maintaining partnership.” As a large component of this program is intended to define the requirements for the prevention of forced labor, read on to understand these new requirements, which have become mandatory as of August 1, 2022.

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Where does the CTPAT program stand?

Since its inception in 2001, CTPAT membership has risen. Currently, more than 11,000 certified partners—including but not limited to U.S. importers/exporters, rail and sea carriers, non-operating common carriers, U.S. freight consolidators, and U.S. customs brokers—have been accepted into the program.

This year, the CTPAT program implemented the CTPAT Trade Compliance component—an evolution of the former Importer Self-Assessment (ISA) program—which includes the forced labor program requirements. The CTPAT program now consists of two divisions: The CTPAT Security division and the CTPAT Trade Compliance division.

New CTPAT forced labor requirements

The forced labor requirements for the CTPAT Trade Compliance program became mandatory on August 1, 2022. This means that in addition to maintaining a social compliance program, as required by the CTPAT Security program, CTPAT Trade Compliance partners must now also comply with the following six forced labor program requirements:

• Risk-based business mapping: Partners must be in tune with their supply chains, and ensure they conduct risk-based mapping in its entirety—especially for those supply chains that carry a higher level of risk when it comes to the forced labor component. Based on the partner’s sourcing strategy, specific attention must be placed on those imports that would be considered high risk for their business model. Partners may also use public information, as released by CBP, to make informed decisions throughout this exercise.
• Code of conduct: As part of its social compliance program, a partner must implement a code of conduct that emphasizes proper behavior and sets of penalties for unethical conduct. This statement must also cover the partner’s stance against the use of forced labor in any part of their supply chain and must be uploaded to the CTPAT web portal. Within the organization, there must also be policies and procedures implemented that require adherence to this code of conduct.
• Evidence of implementation: Evidence must be furnished to CBP specific to the partner’s implementation of their social compliance program, including the parts of their supply chain that carry a higher risk component. Some examples that comply as evidence include training programs for company personnel to aid them in identifying forced labor and audit findings of higher-risk supply chains as it relates to forced labor.
• Due diligence and training: Specific training must be provided to individuals both within the organization as well as external business partners—such as suppliers—as it relates to the company’s social compliance program. The U.S. Department of Labor defines social compliance system as an "integrated set of policies and practices through which a company seeks to ensure maximum adherence to the elements of its code of conduct that cover social and labor issues." Therefore, trainings must cover such requirements to ensure a supplier employs a code of conduct in which they will not partner with business who use any type of forced labor.
• Remediation plan: Partners are required to maintain remediation plans proactively to prepare for any instance in which forced labor is identified in their supply chain. These plans must outline necessary measures that will be taken by company personnel and any business partners to correct this issue and include a process for disclosing this event to CBP.
• Shared best practices: CTPAT defines best practices as those that "combine senior management support, evidence of implementation, innovative business processes and technology, documented processes, and a system of checks, balances, and accountability, also known as the Best Practices Framework." Partners that have implemented such best practices in efforts to help mitigate the risk of forced labor in their supply chain must share these best practices in the CTPAT Trade Compliance program account.

Application schedule for new applicants

As of August 1, 2022, all new applicants must meet the CTPAT Trade Compliance forced labor program requirements at the time of their application submission. The required documentation should be uploaded with question 13 on the application in the System Controls section of the portal.

Implementation schedule for existing members

If you are an existing CTPAT Trade Compliance member, you must implement these additional new requirements by August 1, 2023, and provide evidence of implementing the social compliance program and code of conduct in your existing CTPAT Trade Compliance portal account. Following submission, the documentation will be reviewed as part of the Annual Notification Letter (ANL) review. Any updates thereafter are required to be submitted annually, as part of the standard ANL process.

How can C.H. Robinson help?

C.H. Robinson’s Trade Policy team offers a depth of experience related to the CTPAT program. This team has navigated many companies through the CTPAT certification, validation, and revalidation processes. Connect with one of our trade policy experts to learn more.

Resources

• Customs Trade Partnership Against Terrorism Trade Compliance Handbook July 2022 (cbp.gov)
• CTPAT: Customs Trade Partnership Against Terrorism | U.S. Customs and Border Protection (cbp.gov)
• Recent Trade & Tariff Perspectives | Customs Trade Partnership Against Terrorism (CTPAT) Program (chrobinson.com)
• Forced Labor | U.S. Customs and Border Protection (cbp.gov)

Our information is compiled from a number of sources that to the best of our knowledge are accurate and correct. It is always the intent of our company to present accurate information. C.H. Robinson accepts no liability or responsibility for the information published herein.