CBP Updates CTPAT Trade Compliance Handbook and Forced Labor Requirements

Yesterday U.S. Customs and Border Protection (CBP) released its updated  Customs Trade Partnership Against Terrorism (CTPAT) Trade Compliance handbook [here].  The handbook provides importers guidance on the internal controls needed to become a CTPAT Trade Compliance member, including guidance on the necessary requirements to ensure forced labor compliance. The CTPAT program provides benefits (e.g., less inspections) to importers, carriers and others who demonstrate required cargo security controls.  The CTPAT Trade Compliance program provides importers even more benefits (e.g., reduced audits and penalties) that demonstrate sufficient controls of substantive import compliance operations.  Participants of CTPAT Trade Compliance must be a member of the CTPAT Security program before applying for CTPAT Trade Compliance membership.  Members of CTPAT Security do not need to be a member of CTPAT Trade Compliance.

On August 1, 2022, CBP announced six new requirements related to forced labor that members of the CTPAT Trade Compliance program will be required to comply with.  Existing members will have until August 1, 2023 to implement the new forced labor elements.  However, new applicants must meet the forced labor component at the time of application.

The new forced labor requirements for CTPAT Trade Compliance partners are as follows:

1. Risk-based mapping.  Partners are required to conduct a risk-based mapping of their business that outlines the supply chain in its entirety.  Importers must determine what imports are considered high-risk and should utilize publicly available information that CBP provides.  A company’s code of conduct should include their commitment to business mapping.  CBP may request unredacted proof of supply chain mapping regarding a particular supply chain at any time.
2. Code of Conduct.  Partners must create a code of conduct statement that represents their position against the use of forced labor within any part of their supply chain.  The statement must be included in the company’s forced labor social compliance program, as outlined in the CTPAT Security Minimum Security Criteria.  The statement must be uploaded to the CTPAT online portal and made publicly available.
3. Evidence of Implementation.  Partners must provide CBP with evidence of implementation of their social compliance program.  Examples of evidence may include unredacted audits of high-risk supply chain related to forced labor, contracts signed with suppliers, internal training programs for employees on identifying signs of forced labor, and mechanisms showing that a supply chain is free of the use of forced labor.
4. Due Diligence and Training.  Partners must provide training on the company’ssocial compliance program requirements to their suppliers, which helps identify and prevent forced labor in the supply chain.  Training requirements are determined by the company based on the industry and risks.  Partners must ensure that their suppliers’ business model and code of conduct expressly state that they will not partner with any business that uses forced labor.
5. Remediation Plan.  Partners must maintain a remediation plan for their company in the event that forced labor is identified in the company’s supply chains.  The plan must include a process for disclosing the issue to CBP and outline the necessary steps for employees and suppliers to undertake to correct the issue.
6. Shared Best Practices and Path Forward.  Partners will share best practices with the CTPAT Trade Compliance program, as appropriate, to help mitigate the risk of forced labor.  CBP is in the process of operationalizing the data and to share with the CTPAT community.

CBP publishes monthly operational reports and has recently provided trade statistics related to forced labor detentions.  Below is a summary chart to illustrate the number of reported forced labor entries targeted and the total value of the imports.  The forced labor data has only been reported for two months included below.