Recently CBP has implemented a new policy extending the role of Focused Assessments (”FA”). Over the past few months, companies undergoing a FA that are not C-TPAT members are being subjected to a Supply Chain Security Observation (”SCSO”) and required to complete a C-TPAT type questionnaire. The obvious issue with such a broadening of power under a FA is that membership in C-TPAT is technically voluntary while complying with a FA is mandatory.
Although CBP has historically used various methods to persuade companies to join C-TPAT, this new approach appears to be far reaching for the Regulatory Audit division of Customs and beyond even CBP’s self-disclosed purpose in conducting a FA. In CBP’s Focused Assessment Manual, CBP expressly provides that with the implementation of C-TPAT, the Regulatory Audit members will not use the results of a FA to determine the level of cargo examinations to which a company should be subjected. CBP’s own guidelines set forth the risk factors (e.g., value, classification, ADD/CVD, transshipment, etc.) to be considered during a FA and those risk factors do not include supply chain security.
At this point, it appears as though all companies have complied with CBP’s request to conduct a SCSO as part of a FA. If you have received a SCSO request from CBP and would like further guidance on this issue, please contact Prince Law Group.
