C-TPAT SECURITY AWARENESS TRAINING

1. C-TPAT SECURITY AWARENESS TRAINING Presented at: XXXXX As a Basis for Individual Facility Training

2. C-TPAT Background • U.S. Government’s Response to 9/11 • Recognized need to strengthen borders and control possible terrorist infiltration of the int’l supply chain • U.S. Customs and Border Protection under the “new” Department of Homeland Security • C-TPAT program started in 2003 with voluntary applications for importers, carriers, brokers, freight forwarders • Incentive based: COMPANY XXXXXXXXXXXX benefits from participation

3. Reduced Cargo Inspections Fewer enforcement examinations and trade inspections Tiered system Certified Validated (minimum) Validated (exceeds standards; has best practices) FAST Lanes for expedited cargo processing: CA and MX Mitigation of penalties Communications portal (2006) Best practices catalog (2005) Expedited ruling requests Possible “green lane” C-TPAT Benefits

4. C-TPAT Background (cont’d) • March 25, 2005, CBP publishes detailed C-TPAT Security Criteria • Phase I • Container Security, Physical Security, Physical Access Controls • Phase II • Personnel Security, Procedural Security, IT Security • Security Training and Threat Awareness • Phase III: Business Partner Requirements

5. Security Training and Threat Awareness • Purpose: • To train employees to recognize and be aware of the threat posed by terrorists at each point in the supply chain. • Employees must be aware of emergency procedures the company has in place. • “safe” rooms, evacuation procedures • Employees must know how to report situations that may compromise security (who, what, when). • Each facility has guidelines and emergency numbers

6. Your facility: Emergency • “Safe” room • What to do if there is a Hazmat situation • Where to meet outside the facility in case of an evacuation • Numbers to call: (posted in _________) • When to call: (posted in ___________)

7. Phase I: Container Security • Inspection/storage of containers and seals • Employees should immediately report to their supervisors, customs coordinator and plant manager any signs of: • Container (or trailer) damage; • Broken container (or trailer) seals; • Unauthorized personnel in container/trailer storage areas; • Paperwork discrepancies (unaccounted for cargo, missing cargo).

8. Phase I: Physical Security • Employees should immediately report: • Damage to exterior fencing, lighting and the building structure; • Defective locking devices and signs of tampering or forcing locks in the building or along the fence line; • Missing keys and access cards or the use of keys and cards by unauthorized personnel; • Any damage to the alarm systems or video surveillance systems.

9. Phase I: Physical Access Controls • IMPORTANT AREA OF EMPLOYEE PARTICIPATION • Employees should know fellow co-workers and challenge unauthorized personnel to identify themselves when seen on the premises. • Employees should notify the head of security about ANY unauthorized personnel on premises. • (follow reporting chain for each facility)

10. Phase I: Physical Access Controls (cont’d) • Employees must wear badges at all times and should report cases where: • Visitors and delivery personnel are not wearing identifying badges while on the facility premises • Any proposed break in procedure • “I just need to drop something off….” (follow reporting chain for each facility)

11. Phase II: Personnel Security • HR is responsible for verifying previous employment, background checks, termination procedures • Remove access keys, cards, IT passwords • Follow all written procedures • Employees should immediately report if terminated employees try to access the facility premises. • “Most Wanted” wall

12. Phase II: Procedural Security • Shipping employees must: • Inspect trailer before loading for any damage • 7-point test, especially if trailer was in storage • Verify paperwork and seal number • Cargo integrity (correct quantity, weight, description) • Properly affix seal (or seals if multiple stops) • Report any signs of tampering or suspicious activity • Follow written procedures: keep logs updated

13. Phase II: Procedural Security • Receiving employees must: • Verify that cargo specifications match paperwork • Verify seal number • Check for exterior signs of tampering • After unloading, check interior for tampering • Report any signs of tampering or suspicious activity • Make sure container/trailer is properly reloaded or stored • Follow all written procedures: keep all logs updated

14. Phase III: Business Partner Requirements • All business partners (manufacturers, product suppliers, vendors) should meet C-TPAT criteria (or equivalent foreign supply chain security system) for their own business, subject to COMPANY XXXXXXXXXXXX verification. • COMPANY XXXXXXXXXXXX employees must target business partners that are C-TPAT certified. • CBP Status Verification Interface (SVI) • Plant managers should be advised of partners that do not meet C-TPAT criteria, so a change in supplier may be considered.

15. Security Awareness for Guards • First line of defense: the perimeter • Check for damage to facility, unauthorized entry of persons and vehicles • Report breaches IMMEDIATELY • Guards are responsible for verifying incoming and exiting trailers and containers • Paperwork (shipping or receiving) • Seals • Driver IDs • Visitors: ID and appointment checked before allowed to enter • Delivery drivers: ID and delivery approval before entry • Employees: ID required, survey employee parking, watch for terminated employees • Follow all written procedures; log all persons/vehicles

16. Recognizing Internal Conspiracies • Employees not in appropriate work spaces at appropriate time • Example: assembly line personnel in warehouse • Excessive contact with outside personnel • Shoe example • Parking violations • Next to containers/trailers • No employee parking permit displayed • “Can you do me a favor…?”

17. Security Awareness and You • C-TPAT brings the responsibility for supply chain security to each individual. • All COMPANY XXXXXXXXXXXX employees should participate in keeping their part of the supply chain as strong as possible at their facility. • Always be aware of potential security threats • Follow procedures • Report suspicious activity