October 2, 2012

1. Trusted Traders: Partners with BenefitsCanadian Society of Customs Brokers - 2012 Annual Conference October 2, 2012

2. CBSA Trusted Traders Programs Objective: • To facilitate the movement of legitimate goods by providing streamlined and efficient border processes for pre-approved, low risk traders. • Allows the CBSA to focus resources on areas of higher or unknown risk • Minimizes the impact of border processing on trusted program members • To enhance the security and integrity of the supply chain through partnerships with businesses.

3. CBSA Trusted Traders Programs • Partners in Protection (PIP) Program (Tier I) • Supply chain security • Customs Self Assessment (CSA) Program (Tier II) • Expedited border clearance • Trade data reporting and collection • Revenue reporting and payment • Free and Secure Trade (FAST) Benefit • Dedicated lanes/booths at select border crossings

4. Partners in Protection (PIP) • Partners in Protection (PIP) is a no-fee, voluntary CBSA program that creates partnerships with companies directly involved in cross-border trade. This program was created in 1995 and was redesigned in 2008 when an MRA was signed with the U.S. • Members are responsible for securing their supply chain from point of origin to final destination. • The CBSA provides facilitative measures for trusted traders, allowing the CBSA to focus its resources on areas of high and unknown risk. • The cooperation enhances border and trade chain security, combats organized crime and terrorism, and helps detect and prevent contraband smuggling.

5. PIP Membership June 2012 (includes multi-mode applicants) 1,480 PIP members 75% are also C-TPAT members Rail, 6

6. Customs Self Assessment (CSA) • Three Main Benefits • Border Clearance • Trade Data Reporting and Collection • Revenue Reporting and Payment • CSA: Trade Benefits • Business-to-government partnership that allows importers to self-audit their own books and records for trade compliance, in particular origin, classification, and valuation • Members are removed from CBSA post-release verification activities

7. CSA Statistics • 96 CSA authorized importers. • 839 CSA authorized carriers. • CSA importations comprise approximately 21% of the value for duty of all commercial importations. • CSA shipments examined approximately 4 x less than regular commercial shipments.

8. Beyond the Border Action PlanHarmonized and Enhanced Benefits for Trusted Trader Programs • Canada and the US will adopt a common framework to align their trusted trader programs’ requirements and enhance member benefits. The framework will introduce a two-tiered system with specific outcomes and benefits.

9. Trusted Trader Initiative – Tier I Harmonization • Harmonization refers to further aligning the CBSA’s Partners in Protection (PIP) and US CBP’s Customs-Trade Partnership Against Terrorism (C-TPAT) programs in the areas of policy, procedures and documentation practices, where applicable, with each customs administration retaining sovereignty over its respective program. • Although the programs are not combined, companies of eligible business modes may apply to both PIP and C-TPAT using a single application. As the programs are so closely aligned, they will have the option to recognize decisions made by the other program. • Single application process for companies seeking to join both programs • Only one site validation required • Only one point of contact for companies to maintain their information.

10. Trusted Trader Initiative – Tier I • Develop a secure interoperable communications portal to allow applicants to apply once to multiple programs and update client profile information. • Trusted Traders has engaged the CBSA’s Information Science and Technology (ISTB) Branch and early discussions are underway. • A Trusted Trader Project Charter has been drafted • A draft Functional Requirements document has been provided to CBSA IS&T. • Ongoing collaboration with the U.S. to determine the model for harmonization. A model based on security profile rather than line of business is under review.

11. Trusted Trader Initiative – Tier I • Extend Free and Secure Trade (FAST) benefits to members in either PIP or Customs Self Assessment (CSA) Programs • Canada has initiated a six month pilot at the Blue Water Bridge in Sarnia, Ontario to extend FAST benefits to PIP members • Pilot start date: announcement is forthcoming • Fourteen carriers with 1300 trucks will be participating the pilot • RFID technology has been installed at the port and in participating trucks • Baseline data is currently being collected (as of July 2012) and will be used for comparison after the pilot is completed.

12. Trusted Trader Initiative – Tier I Benefits of PIP • Access to CBSA program experts • Reduced risk scoring in automated risking system • Recognition at the border • Use of FAST lanes • Enhanced reputation of being a low-risk trader; companies are better positioned to achieve international recognition. Next steps • Achieve harmonization with US C-TPAT • Introduce on-line client self-service and application processing (web-portal) • Provide further benefits for members (under consideration: expedited exams and reduced risk scoring for additional modes.)

13. Trusted Trader Initiative – Tier II • Initiate a pilot to permit access to expedited clearance for non-federally registered food sector. • A process is being developed to allow CSA clearance for commodities which are controlled or regulated by Other Government Departments (OGD) • After CSA clearance the importer will provide the data required by the OGD once the goods have been physically received. • August 19, 2011 started a pilot project with an approved CSA importer and CFIA, and the pilot. • Performance evaluation is currently underway with CFIA to determine the success of the pilot and possible next steps.

14. Trusted Trader Initiative – Tier II • Implement CSA: Trade Benefits (formerly Partners in Compliance) benefits. • Current CSA Importers will be able to apply for this enhanced benefit • Removed from general audit stream but may still be subject to targeted compliance activities • Importer responsible for annual self testing • AMPS is not a first response to address non-compliance with Trade programs.

15. Trusted Trader Initiative – Tier II • Extend eligibility and membership benefits for the Customs Self Assessment (CSA) program to non-resident importers in the United States. • Regulatory analysis is complete and the process to change the necessary regulations is underway.

16. Accounts Receivable Ledger (ARL) • CSA accounting options will be eliminated. • All CSA Importers will be required to account for goods released/received in a calendar month (month one) by the 15th of the following month (month two). • Payment will be due on the 15th of month two. • Implementation date to be determined.

17. CSA Offshore • Strategy • CSA Importers must demonstrate: • the ability to stop, trace, locate, recall and control any offshore shipment prior to freight loading, at port of arrival or after delivery at destination 24/7 • stringent vendor screening criteria. • Enhanced Trade Chain Partner (TCP) list submitted via Trusted Traders web portal. • Advanced Commercial Information (ACI) for cargo, conveyance, crew and container routing information submitted for every shipment. • Modified Advanced Trade Data (ATD) must be provided by the Importer • Business Number and Cargo Control Number.

18. Future Trusted Trader Framework Benefits focussed on expedited movement of goods Supply Chain Security PIP LEVEL 1: Trade Chain Participants ePORTAL US C-TPAT Benefits focussed on simplified/ streamlined border processes Self Assessment CSA LEVEL 2: Importers Trade Compliance CSA Offshore OGD Clearance DRAFT: For discussion purposes only

19. Contact Information André Lamoureux Manager National Trusted Traders • Email: Andre.lamoureux@cbsa-asfc.gc.ca • Telephone: (613) 941-2713