A mutual recognition arrangement (MRA) is a signed agreement between U.S. Customs and Border Protection (CBP) and a foreign customs administration that formally recognizes the compatibility of their respective supply chain security programs.
As the US Customs Trade Partnership Against Terrorism (CTPAT) program is security-based, mutual recognition requires that foreign customs administrations have a set of security requirements that meet or exceed the standards of CTPAT and enable an exchange of information between the two agencies about the compliance status of the businesses that are members of their respective industry partnership programs.
Even if you are a member of the CTPAT program, you may not be able to receive the full benefits of MRAs, unless you have the appropriate Entity Type within the program. We’ll go through what the benefits of MRAs are and how companies can best leverage them.
Benefits of MRA
For businesses in both the U.S. and MRA countries, the MRA increases the ease and efficiency of trade between members of CTPAT and members of the foreign country’s partnership program, typically referred to as an Authorized Economic Operator (AEO) program.
- Program members in MRA countries are considered Low Risk by CBP. Trading partners in foreign county partnership programs recognized under an MRA may exempt from foreign CTPAT business partner validations, as CTPAT recognizes the validation performed by the foreign customs administration as sufficient guarantee of compliance with CTPAT security standards.
- Reduced due-diligence requirements. When CTPAT members carry out their obligations to monitor their business partners each year to comply with MSC Section 3 (Business Partners), they can simply add their MRA-covered business partners’ verified status in their home country’s partnership program as evidence of compliance with security standards – no extensive surveys or security audits needed.
- CTPAT Exporters are considered low risk by the MRA country. When CTPAT members export to program members in MRA-covered countries, the customs administration of that country will consider the CTPAT member low risk and provide the benefits of its AEO program. This means that the CTPAT member may enjoy benefits such as reduced inspection when exporting to that country.
Current MRAs with CTPAT
- New Zealand
- Canada
- Jordan
- Japan
- Korea
- European Union
- Taiwan
- Israel
- Mexico
- Singapore
- Dominican Republic
- Peru
- United Kingdom
- India
- Uruguay
- Brazil
- Guatemala
- Colombia
CBP maintains and updates the list of its MRAs here.
Leveraging MRA Benefits
Are you taking advantage of the benefits conferred by MRAs? Many companies are not. To get the benefits associated with these agreements, we recommend that you:
- Review your Risk Assessment process to make sure it’s streamlined. Ensure that your current process identifies business partners that are AEOs under a program with an MRA with CTPAT and classifies its risk accordingly. This helps reduce redundancy and unnecessary administrative burdens for you and your AEO business partners.
- Review your US export operations. Probably the most significant benefit of MRAs is for US exporters to be recognized by another country’s AEO program. If your company exports to one of the countries with an MRA with CTPAT, you may want to take advantage of this benefit. Importantly, you must have an Exporter profile within the CTPAT program to access this benefit of mutual recognition. If your company wants to leverage MRAs but is not an Exporter member of the CTPAT program, it may be worth applying to the CTPAT program as an Exporter (companies can have multiple Profiles with different entity types within CTPAT).
