[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3551 Referred in Senate (RFS)]

<DOC>
115th CONGRESS
  1st Session
                                H. R. 3551


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 24, 2017

     Received; read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 AN ACT


 
To amend the Security and Accountability for Every Port Act of 2006 to 
 reauthorize the Customs-Trade Partnership Against Terrorism Program, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``C-TPAT Reauthorization Act of 
2017''.

SEC. 2. CUSTOMS-TRADE PARTNERSHIP AGAINST TERRORISM.

    (a) In General.--Subtitle B of title II of the Security and 
Accountability for Every Port Act of 2006 (6 U.S.C. 961 et seq.) is 
amended to read as follows:

       ``Subtitle B--Customs-Trade Partnership Against Terrorism

``SEC. 211. ESTABLISHMENT OF THE CUSTOMS-TRADE PARTNERSHIP AGAINST 
              TERRORISM PROGRAM.

    ``(a) In General.--There is established within U.S. Customs and 
Border Protection a voluntary government-private sector partnership 
program to be known as the Customs-Trade Partnership Against Terrorism 
(C-TPAT).
    ``(b) Purpose.--The purposes of the C-TPAT program are to--
            ``(1) strengthen and improve the overall security of the 
        international supply chain and United States border security;
            ``(2) facilitate the movement of secure cargo through the 
        international supply chain;
            ``(3) ensure compliance with applicable law; and
            ``(4) serve as the Authorized Economic Operator program for 
        the United States.
    ``(c) Director.--There shall be at the head of the C-TPAT program a 
Director, who shall report to the Executive Assistant Commissioner of 
the Office of Field Operations (in this subtitle referred to as the 
`Executive Assistant Commissioner') of U.S. Customs and Border 
Protection.
    ``(d) Duties.--The Director of the C-TPAT program shall--
            ``(1) oversee the activities of the C-TPAT program, 
        including certification of C-TPAT participants;
            ``(2) evaluate and make revisions to security criteria 
        pursuant to subsections (c) and (d) of section 213;
            ``(3) ensure that participants receive a tangible and 
        measurable benefit for participation; and
            ``(4) carry out other duties and powers prescribed by the 
        Executive Assistant Commissioner.

``SEC. 212. ELIGIBLE ENTITIES AND NOTICE OF BENEFITS.

    ``(a) Eligible Entities.--Importers, exporters, customs brokers, 
forwarders, air, sea, and land carriers, contract logistics providers, 
and other entities in the international supply chain and intermodal 
transportation system are eligible to apply for participation in the C-
TPAT program.
    ``(b) Tiered Participation.--
            ``(1) In general.--Applicants may be eligible to 
        participate as Tier 1 or Tier 2 participants.
            ``(2) Importers.--Importers may be eligible to participate 
        as Tier 3 participants.
            ``(3) Extension.--The Executive Assistant Commissioner may, 
        in his or her discretion, extend Tier 3 participation to other 
        entity types, if appropriate.
    ``(c) Notice of Benefits.--
            ``(1) In general.--The Commissioner of U.S. Customs and 
        Border Protection shall publish, on the U.S. Customs and Border 
        Protection website and through other appropriate online 
        publication, information about benefits to C-TPAT program 
        participants.
            ``(2) Changes.--The Commissioner of U.S. Customs and Border 
        Protection shall publish, on the U.S. Customs and Border 
        Protection website and through other appropriate online 
        publication, notice of any changes to benefits to C-TPAT 
        program participants not later than 30 days before any such 
        changes take effect.

``SEC. 213. PARTICIPATION ELIGIBILITY.

    ``(a) In General.--The Executive Assistant Commissioner shall 
review all documentation submitted by an applicant pursuant to 
subsection (b)(2), conduct a background investigation of such 
applicant, and vet such applicant.
    ``(b) General Requirements.--To be eligible for participation in 
the C-TPAT program, an entity shall, at a minimum--
            ``(1) have a designated company employee authorized to bind 
        such entity that is a direct company employee and will serve as 
        the primary point of contact responsible for participation of 
        such entity in the C-TPAT program;
            ``(2) at the time of initial application and annually 
        thereafter, including in advance of any recertification or 
        revalidation, submit an international supply chain security 
        profile, which shall identify how such entity meets the minimum 
        security criteria of the C-TPAT program established by the 
        Commissioner of U.S. Customs and Border Protection and how such 
        entity will maintain and enhance internal policies, procedures, 
        and practices related to international supply chain security; 
        and
            ``(3) meet any specific requirements for eligible entities, 
        as established by the Commissioner.
    ``(c) Minimum Security Criteria.--The Commissioner of U.S. Customs 
and Border Protection shall establish minimum security criteria for 
participants in the C-TPAT program, review such minimum security 
criteria not less than once every 2 years, and update such minimum 
security criteria as necessary. Such minimum security criteria shall 
seek to address security vulnerabilities in the international supply 
chain.
    ``(d) Additional and Updated Criteria.--The Commissioner of U.S. 
Customs and Border Protection may establish additional and updated 
security criteria for individual C-TPAT program participants, 
categories of C-TPAT program participants, or particular entity types 
to meet in order to address a security vulnerability in the 
international supply chain.
    ``(e) Consultation.--When establishing or updating security 
criteria in accordance with subsection (c), and when establishing 
additional or updated security criteria in accordance subsection (d), 
the Commissioner of U.S. Customs and Border Protection shall consult 
with C-TPAT program participants and other interested parties, and 
shall--
            ``(1) conduct a cost benefit analysis of such proposed new, 
        additional, or updated security criteria in consultation with 
        the Commercial Customs Operations Advisory Committee 
        established under section 109 of the Trade Facilitation and 
        Trade Enforcement Act of 2015 (Public Law 114-125; 19 U.S.C. 
        4316);
            ``(2) determine operational feasibility and, where 
        appropriate, conduct a phased implementation of such proposed 
        additional or updated security criteria; and
            ``(3) provide C-TPAT program participants and other 
        interested parties a 90-day comment period to review and 
        comment on such proposed additional or updated security 
        criteria.
    ``(f) Waiver.--The Commissioner of U.S. Customs and Border 
Protection may waive the requirements of subsection (e) if the 
Commissioner determines there is a significant and imminent risk to the 
national security of the United States and such a waiver is necessary 
to protect such national security. Not later than 120 days after the 
issuance of any such waiver, the Commissioner shall announce on the 
U.S. Customs and Border Protection website and through other 
appropriate online publication the Commissioner's intent to either 
withdraw such waiver or maintain such waiver while commencing efforts 
to establish minimum security criteria or establish additional or 
update existing security criteria in accordance with subsection (c) or 
(d), respectively.

``SEC. 214. BENEFITS FOR C-TPAT PROGRAM PARTICIPANTS.

    ``(a) In General.--The Executive Assistant Commissioner shall 
extend certain benefits to each C-TPAT program participant. Minimum 
benefits for each such participant shall include the following:
            ``(1) Assignment of a U.S. Customs and Border Protection 
        Supply Chain Security Specialist.
            ``(2) Access to the C-TPAT program's web-based Portal 
        system and training materials.
            ``(3) A periodic and unclassified update on regional and 
        other relevant threats to the international supply chain.
    ``(b) Public Availability.--The Executive Assistant Commissioner 
shall make publicly available on the C-TPAT portal an annual assessment 
of the tangible benefits being realized by C-TPAT program participants.
    ``(c) Annual Assessment.--The Executive Assistant Commissioner 
shall conduct, on an annual basis, an assessment of the benefits 
conferred to C-TPAT program participants. The Executive Assistant 
Commissioner shall determine a process to carry out such assessments, 
to include projected milestones and completion dates for addressing 
data reliability issues and, as necessary, correcting data weaknesses, 
so that U.S. Customs and Border Protection can produce accurate and 
reliable annual assessments that can be compared year-to-year.

``SEC. 215. TIER 1 PARTICIPANTS.

    ``(a) Certification.--The Executive Assistant Commissioner shall 
certify the security measures and international supply chain security 
practices of all applicants to and participants in the C-TPAT program 
in accordance with section 213(b)(2) and the guidelines referred to in 
subsection (c) of this section. Certified participants shall be Tier 1 
participants.
    ``(b) Benefits for Tier 1 Participants.--Upon completion of the 
certification under subsection (a), a C-TPAT program participant shall 
be certified as a Tier 1 participant. The Executive Assistant 
Commissioner shall extend limited benefits to a Tier 1 participant.
    ``(c) Guidelines.--Not later than 180 days after the date of the 
enactment of this subtitle, the Commissioner of U.S. Customs and Border 
Protection shall update the guidelines and criteria for certifying a C-
TPAT program participant's security measures and supply chain security 
practices under this section. Such guidelines shall include a 
background investigation and review of appropriate documentation, as 
determined by the Commissioner.
    ``(d) Timeframe.--To the extent practicable, the Executive 
Assistant Commissioner shall complete the Tier 1 certification process 
within 90 days of receipt of an application for participation in the C-
TPAT program.

``SEC. 216. TIER 2 PARTICIPANTS.

    ``(a) Validation.--The Executive Assistant Commissioner shall 
validate the security measures and international supply chain security 
practices of a Tier 1 C-TPAT program participant in accordance with the 
guidelines referred to in subsection (c) to validate such participant 
as a Tier 2 participant. Such validation shall include on-site 
assessments at appropriate foreign and domestic locations utilized by 
such Tier 1 participant in its international supply chain.
    ``(b) Benefits for Tier 2 Participants.--The Executive Assistant 
Commissioner, shall extend benefits to each C-TPAT participant that has 
been validated as a Tier 2 participant under this section. Such 
benefits may include the following:
            ``(1) Reduced scores in U.S. Customs and Border 
        Protection's Automated Targeting System.
            ``(2) Reduced number of security examinations by U.S. 
        Customs and Border Protection.
            ``(3) Priority examinations of cargo.
            ``(4) Access to the Free and Secure Trade (FAST) Lanes at 
        United States ports of entry.
            ``(5) Recognition as a trusted trade partner by foreign 
        customs administrations that have signed Mutual Recognition 
        Arrangements with U.S. Customs and Border Protection.
            ``(6) In the case of importers, eligibility to participate 
        in the Importer Self-Assessment Program (ISA) or successor 
        compliance program.
    ``(c) Guidelines.--Not later than 180 days after the date of the 
enactment of this subtitle, the Commissioner shall develop a schedule 
and update the guidelines and criteria for validating a C-TPAT 
participant's security measures and supply chain security practices 
under this section.
    ``(d) Timeframe.--To the extent practicable, the Executive 
Assistant Commissioner shall complete the Tier 2 validation process for 
a C-TPAT program participant under this section within 1 year after 
certification of such participant as a Tier 1 participant.

``SEC. 217. TIER 3 PARTICIPANTS.

    ``(a) In General.--The Commissioner shall establish a third tier of 
C-TPAT program participation that offers additional benefits to C-TPAT 
program participants that are importers or other entity types, in 
accordance with section 212(b), that demonstrate a sustained commitment 
to maintaining security measures and international supply chain 
security practices that exceed the guidelines established for 
validation as a Tier 2 participant in the C-TPAT program under section 
216.
    ``(b) Best Practices.--The Executive Assistant Commissioner may 
designate a Tier 2 C-TPAT program participant as a Tier 3 participant 
based on a review of best practices in such participant's international 
supply chain that reflect a continued approach to enhanced 
international supply chain security, including--
            ``(1) compliance with any additional or updated criteria 
        established by the Commissioner of U.S. Customs and Border 
        Protection under section 213(d) that exceed the guidelines 
        established pursuant to section 216 for validating a C-TPAT 
        program participant as a Tier 2 participant; and
            ``(2) any other factors that the Executive Assistant 
        Commissioner determines appropriate.
    ``(c) Benefits for Tier 3 Participants.--The Executive Assistant 
Commissioner, in consultation with the Commercial Customs Operations 
Advisory Committee established under section 109 of the Trade 
Facilitation and Trade Enforcement Act of 2015 (Public Law 114-125; 19 
U.S.C. 4316) and the National Maritime Security Advisory Committee 
established under section 70112 of title 46, United States Code, shall 
extend benefits to each C-TPAT program participant that has been 
validated as a Tier 3 participant under this section, which may include 
the following:
            ``(1) Further reduction in the number of examinations by 
        U.S. Customs and Border Protection.
            ``(2) Front of the line inspections and examinations.
            ``(3) Exemption from Stratified Exams.
            ``(4) Shorter wait times at United States ports of entry.
            ``(5) Access to the Free and Secure Trade (FAST) Lanes at 
        United States ports of entry.
            ``(6) Recognition as a trusted trade partner by foreign 
        customs administrations that have signed Mutual Recognition 
        Arrangements with U.S. Customs and Border Protection.
            ``(7) In the case of importers, eligibility to participate 
        in the Importer Self-Assessment Program (ISA) or successor 
        compliance program.

``SEC. 218. CONSEQUENCES FOR LACK OF COMPLIANCE.

    ``(a) In General.--If at any time the Executive Assistant 
Commissioner determines that a C-TPAT program participant's security 
measures or international supply chain security practices fail to meet 
applicable requirements under this subtitle, the Executive Assistant 
Commissioner may deny such participant benefits otherwise made 
available pursuant to this subtitle, either in whole or in part. The 
Executive Assistant Commissioner shall develop procedures, in 
consultation with Commercial Customs Operations Advisory Committee, 
established under section 109 of the Trade Facilitation and Trade 
Enforcement Act of 2015 (Public Law 114-125; 19 U.S.C. 4316), that 
provide appropriate protections to C-TPAT program participants, 
including advance notice and an opportunity for such participants to 
provide additional information to U.S. Customs and Border Protection 
regarding any such alleged failure, before any of such benefits are 
withheld. Such procedures may not limit the ability of the Executive 
Assistant Commissioner to take actions to protect the national security 
of the United States.
    ``(b) False or Misleading Information; Lack of Compliance With 
Law.--If a C-TPAT program participant knowingly provides false or 
misleading information to the Commissioner of U.S. Customs and Border 
Protection, the Executive Assistant Commissioner, or any other officers 
or officials of the United States Government, or if at any time the 
Executive Assistant Commissioner determines that a C-TPAT program 
participant has committed a serious violation of Federal law or customs 
regulations, or if a C-TPAT program participant has committed a 
criminal violation relating to the economic activity of such 
participant, the Executive Assistant Commissioner may suspend or expel 
such participant from the C-TPAT program for an appropriate period of 
time. The Executive Assistant Commissioner, after the completion of the 
process described in subsection (d), may publish in the Federal 
Register a list of C-TPAT program participants that have been so 
suspended or expelled from the C-TPAT program pursuant to this 
subsection.
    ``(c) National Security.--If at any time the Executive Assistant 
Commissioner determines that a C-TPAT program participant poses a 
significant and imminent risk to the national security of the United 
States or has committed a serious violation of Federal law or customs 
regulations, or if a C-TPAT program participant has committed a 
criminal violation relating to the economic activity of such 
participant, the Executive Assistant Commissioner may suspend or expel 
such participant from the C-TPAT program for an appropriate period of 
time. The Executive Assistant Commissioner, after the completion of the 
process described in subsection (d), may publish in the Federal 
Register a list of C-TPAT program participants that have been so 
suspended or expelled from the C-TPAT program pursuant to this 
subsection.
    ``(d) Right of Appeal.--
            ``(1) In general.--The Commissioner of U.S. Customs and 
        Border Protection shall establish a process for a C-TPAT 
        program participant to appeal a decision of the Executive 
        Assistant Commissioner under subsection (a). Such appeal shall 
        be filed with the Commissioner not later than 90 days after the 
        date of such decision, and the Commissioner shall issue a 
        determination not later than 90 days after such appeal is 
        filed.
            ``(2) Appeals of other decisions.--The Commissioner of U.S. 
        Customs and Border Protection shall establish a process for a 
        C-TPAT program participant to appeal a decision of the 
        Executive Assistant Commissioner under subsections (b) and (c). 
        Such appeal shall be filed with the Commissioner not later than 
        30 days after the date of such decision, and the Commissioner 
        shall issue a determination not later than 90 days after such 
        appeal is filed.

``SEC. 219. VALIDATIONS BY OTHER DHS COMPONENTS.

    ``(a) In General.--The Commissioner of U.S. Customs and Border 
Protection may recognize regulatory inspections conducted by other 
components of the Department of Homeland Security of entities as 
sufficient to constitute validation for C-TPAT program participation in 
cases in which any such component's inspection regime is harmonized 
with validation criteria for the C-TPAT program. Such regulatory 
inspections shall not limit the ability of U.S. Customs and Border 
Protection to conduct a C-TPAT program validation.
    ``(b) Revalidation.--Nothing in this section may limit the 
Commissioner of U.S. Customs and Border Protection's ability to require 
a revalidation by U.S. Customs and Border Protection.
    ``(c) Certification.--Nothing in this section may be construed to 
authorize certifications of C-TPAT applicants to be performed by any 
party other than U.S. Customs and Border Protection.

``SEC. 220. RECERTIFICATION AND REVALIDATION.

    ``(a) Recertification.--The Commissioner of U.S. Customs and Border 
Protection shall implement a recertification process for all C-TPAT 
program participants. Such process shall occur annually, and shall 
require--
            ``(1) a review of the security profile and supporting 
        documentation to ensure adherence to the minimum security 
        criteria under section 213; and
            ``(2) background checks and vetting.
    ``(b) Revalidation.--The Commissioner of U.S. Customs and Border 
Protection shall implement a revalidation process for all Tier 2 and 
Tier 3 C-TPAT program participants. Such process shall require--
            ``(1) a framework based upon objective, risk based criteria 
        for identifying participants for periodic revalidation at least 
        once every 4 years following the initial validation of such 
        participants;
            ``(2) on-site assessments at appropriate foreign and 
        domestic locations utilized by such a participant in its 
        international supply chain; and
            ``(3) an annual plan for revalidation that includes--
                    ``(A) performance measures;
                    ``(B) an assessment of the personnel needed to 
                perform such revalidations; and
                    ``(C) the number of participants that will be 
                revalidated during the following year.
    ``(c) Revalidation Under a Mutual Recognition Arrangement.--
            ``(1) In general.--Upon request from the Commissioner of 
        U.S. Customs and Border Protection, all Tier 2 and Tier 3 C-
        TPAT program participants shall provide any revalidation report 
        conducted by a foreign government under a Mutual Recognition 
        Arrangement.
            ``(2) Recognition.--The Commissioner of U.S. Customs and 
        Border Protection may recognize revalidations of entities 
        conducted by foreign governments under a Mutual Recognition 
        Arrangement as sufficient to constitute a revalidation for C-
        TPAT program participation under subsection (b).
            ``(3) No limitation.--Nothing in this subsection may be 
        construed to limit the Commissioner of U.S. Customs and Border 
        Protection's ability to require a revalidation by U.S. Customs 
        and Border Protection.
    ``(d) Designated Company Employees.--Only designated company 
employees of a C-TPAT program participant under section 213(b)(1) are 
authorized to respond to a revalidation report. Third-party entities 
are not authorized to respond to a revalidation report.

``SEC. 221. NONCONTAINERIZED CARGO AND THIRD PARTY LOGISTICS PROVIDERS.

    ``The Commissioner of U.S. Customs and Border Protection shall 
consider the potential for participation in the C-TPAT program by 
importers of noncontainerized cargoes and non-asset-based third party 
logistics providers that otherwise meet the requirements under this 
subtitle.

``SEC. 222. PROGRAM MANAGEMENT.

    ``(a) In General.--The Commissioner of U.S. Customs and Border 
Protection shall establish sufficient internal quality controls and 
record management, including recordkeeping (including maintenance of a 
record management system in accordance with subsection (b)) and 
monitoring staff hours, to support the management systems of the C-TPAT 
program. In managing the C-TPAT program, the Commissioner shall ensure 
that the C-TPAT program includes the following:
            ``(1) A 5-year plan to identify outcome-based goals and 
        performance measures of the C-TPAT program.
            ``(2) An annual plan for each fiscal year designed to match 
        available resources to the projected workload.
            ``(3) A standardized work program to be used by agency 
        personnel to carry out the certifications, validations, 
        recertifications, and revalidations of C-TPAT program 
        participants.
            ``(4) In accordance with subsection (e), a standardized 
        process for the Executive Assistant Commissioner to receive 
        reports of suspicious activity, including reports regarding 
        potentially compromised cargo or other border or national 
        security concerns.
    ``(b) Documentation of Reviews.--
            ``(1) In general.--The Commissioner of U.S. Customs and 
        Border Protection shall maintain a record management system to 
        document determinations on the reviews of each C-TPAT program 
        participant, including certifications, validations, 
        recertifications, and revalidations.
            ``(2) Standardized procedures.--To ensure accuracy and 
        consistency within the record management system required under 
        this subsection, the Commissioner shall develop, disseminate, 
        and require utilization of standardized procedures for agency 
        personnel carrying out certifications, validations, 
        recertifications, and revalidations to report and track 
        information regarding the status of each C-TPAT program 
        participant.
    ``(c) Confidential Information Safeguards.--In consultation with 
the Commercial Customs Operations Advisory Committee established under 
section 109 of the Trade Facilitation and Trade Enforcement Act of 2015 
(Public Law 114-125; 19 U.S.C. 4316), the Commissioner of U.S. Customs 
and Border Protection shall develop and implement procedures to ensure 
the protection of confidential data collected, stored, or shared with 
government agencies or as part of the application, certification, 
validation, recertification, and revalidation processes.
    ``(d) Resource Management Staffing Plan.--The Commissioner of U.S. 
Customs and Border Protection shall--
            ``(1) develop a staffing plan to recruit and train staff 
        (including a formalized training program) to meet the 
        objectives identified in the 5-year strategic plan under 
        subsection (a)(1); and
            ``(2) provide cross-training in post incident trade 
        resumption for the C-TPAT Director and other relevant personnel 
        who administer the C-TPAT program.
    ``(e) Engagement.--In carrying out the standardized process 
required under subsection (a)(4), the Commissioner shall engage with 
and provide guidance to C-TPAT program participants and other 
appropriate stakeholders on submitting reports described in such 
subsection.
    ``(f) Report to Congress.--In connection with the President's 
annual budget submission for the Department of Homeland Security, the 
Commissioner of U.S. Customs and Border Protection shall report to the 
appropriate congressional committees on the progress made by the 
Commissioner to certify, validate, recertify, and revalidate C-TPAT 
program participants. Each such report shall be due on the same date 
that the President's budget is submitted to Congress.''.
    (b) Saving Clause.--
            (1) In general.--The amendments made by this Act shall take 
        effect and apply beginning on the date that is 30 days after 
        the date of the enactment of this Act with respect to 
        applicants for participation in the C-TPAT program.
            (2) Exception.--Paragraph (1) shall not apply in case of C-
        TPAT program participants who are such participants as of the 
        date specified in such paragraph. Such participants shall be 
        subject to the amendments made by this Act upon revalidation of 
        such participants to participate in such program. Until such 
        time, such participants shall be subject to the requirements of 
        the C-TPAT program as in existence on the day before the date 
        of the enactment of this Act.
    (c) Clerical Amendments.--The table of contents in section 1(b) of 
the Security and Accountability for Every Port Act of 2006 is amended 
by striking the items relating to subtitle B of title II and inserting 
the following new items:

       ``Subtitle B--Customs-Trade Partnership Against Terrorism

``Sec. 211. Establishment of the Customs and Trade Partnership Against 
                            Terrorism program.
``Sec. 212. Eligible entities and notice of benefits.
``Sec. 213. Participation eligibility.
``Sec. 214. Benefits for C-TPAT program participants.
``Sec. 215. Tier 1 participants.
``Sec. 216. Tier 2 participants.
``Sec. 217. Tier 3 participants.
``Sec. 218. Consequences for lack of compliance.
``Sec. 219. Validations by other DHS components.
``Sec. 220. Recertification and revalidation.
``Sec. 221. Noncontainerized cargo and third party logistics providers.
``Sec. 222. Program management.''.

            Passed the House of Representatives October 23, 2017.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.