[Senate Hearing 110-1227]
[From the U.S. Government Publishing Office]
S. Hrg. 110-1227
SUPPLY CHAIN SECURITY: SECURE FREIGHT
INITIATIVE AND THE IMPLEMENTATION OF
100 PERCENT SCANNING
=======================================================================
HEARING
before the
SUBCOMMITTEE ON SURFACE TRANSPORTATION
AND MERCHANT MARINE INFRASTRUCTURE,
SAFETY, AND SECURITY
OF THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
JUNE 12, 2008
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West TED STEVENS, Alaska, Vice Chairman
Virginia JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California GORDON H. SMITH, Oregon
BILL NELSON, Florida JOHN ENSIGN, Nevada
MARIA CANTWELL, Washington JOHN E. SUNUNU, New Hampshire
FRANK R. LAUTENBERG, New Jersey JIM DeMINT, South Carolina
MARK PRYOR, Arkansas DAVID VITTER, Louisiana
THOMAS R. CARPER, Delaware JOHN THUNE, South Dakota
CLAIRE McCASKILL, Missouri ROGER F. WICKER, Mississippi
AMY KLOBUCHAR, Minnesota
Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
Christine D. Kurth, Republican Staff Director and General Counsel
Paul Nagle, Republican Chief Counsel
------
SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE
INFRASTRUCTURE, SAFETY, AND SECURITY
FRANK R. LAUTENBERG, New Jersey, GORDON H. SMITH, Oregon, Ranking
Chairman JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West KAY BAILEY HUTCHISON, Texas
Virginia OLYMPIA J. SNOWE, Maine
JOHN F. KERRY, Massachusetts JIM DeMINT, South Carolina
BYRON L. DORGAN, North Dakota DAVID VITTER, Louisiana
MARIA CANTWELL, Washington JOHN THUNE, South Dakota
MARK PRYOR, Arkansas ROGER F. WICKER, Mississippi
THOMAS R. CARPER, Delaware
CLAIRE McCASKILL, Missouri
AMY KLOBUCHAR, Minnesota
C O N T E N T S
----------
Page
Hearing held on June 12, 2008.................................... 1
Statement of Senator Lautenberg.................................. 1
Witnesses
Ahern, Jayson, Deputy Commissioner, U.S. Customs and Border
Protection, U.S. Department of Homeland Security............... 2
Prepared statement........................................... 5
Caldwell, Stephen L., Director, Homeland Security and Justice
Issues, U.S. Government Accountability Office (GAO)............ 16
Prepared statement........................................... 18
Huizenga, David, Assistant Deputy Administrator, Office of
International Material Protection and Cooperation, Defense
Nuclear Nonproliferation, National Nuclear Security
Administration, U.S. Department of Energy...................... 9
Prepared statement........................................... 11
Appendix
American Association of Exporters and Importers, prepared
statement...................................................... 41
Response to written questions submitted by Hon. Maria Cantwell
to:
Stephen L. Caldwell.......................................... 55
Response to written questions submitted by Hon. Frank. R.
Lautenberg to:
Jayson Ahern................................................. 48
David Huizenga............................................... 52
Robinson, Catherine, Associate Director, High Technology Trade
Policy on behalf of the National Association of Manufacturers
(NAM), prepared statement...................................... 46
Stein, Renee, Chair, and Richard M. Belanger, Counsel, Business
Alliance for Customs Modernization, prepared statement......... 45
SUPPLY CHAIN SECURITY: SECURE FREIGHT
INITIATIVE AND THE IMPLEMENTATION OF
100 PERCENT SCANNING
----------
THURSDAY, JUNE 12, 2008
U.S. Senate,
Subcommittee on Surface Transportation and
Merchant Marine Infrastructure, Safety, and Security,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:05 a.m., in
room SR-253, Russell Senate Office Building, Hon. Frank R.
Lautenberg, Chairman of the Subcommittee, presiding.
OPENING STATEMENT OF HON. FRANK R. LAUTENBERG,
U.S. SENATOR FROM NEW JERSEY
Senator Lautenberg. Good morning. I call the Surface
Transportation and Merchant Marine Infrastructure, Safety, and
Security Subcommittee to order.
Welcome. We thank the witnesses for being here and all of
you for your attention to this very serious problem. I want to
welcome everyone to today's hearing as we continue America's
work to protect our families, protect our communities, protect
our economy by securing our ports and those containers that
arrive there.
Now, my home state of New Jersey knows about the importance
of ports. The Port of New York and New Jersey is the largest
port on the east coast and the second busiest container port in
the country. It supports some 250,000 jobs and is responsible
for generating $20 billion in economic activity.
The 40-foot metal shipping containers, which have become
standard for industry, were first used in the United States at
Port Newark, New Jersey, and today these containers have
transformed global commerce. They save manufacturers and
shippers time by moving goods more efficiently and with less
expense.
But after 9/11, we were forced to see these containers in a
different light, as a way for terrorists to smuggle weapons or
themselves into our country. An attack on a U.S. port or even a
foreign port would affect our economy, not to mention the
safety of surrounding communities. To prevent that from
happening and to keep our country safe, we need to know what is
in these containers.
The Bush Administration has long believed that a layered
approach is adequate for securing our ports. I would consider
it a modular approach, but in practice, this layered approach
has been more like a piecemeal one, leaving our country and our
economy still vulnerable.
After the 9/11 attacks, the Federal Government installed
equipment to scan 100 percent of passengers and baggage
boarding a plane. It should not take another attack on our
country for the Federal Government to secure our ports.
To that end, Congress passed a law last year requiring that
by year 2012, all shipping containers coming into our ports
should be scanned for nuclear weapons and radiation before they
reach our shores. It is my understanding that today's
administration witnesses are about to tell us that July 2012,
the deadline, will not be met.
The GAO has already told Congress twice this year that the
Bush Administration's cargo security programs are riddled with
loopholes. For example, we still do not have minimum standards
for container security. The Department of Homeland Security
still has not established a standard lock for metal shipping
containers, and I am deeply concerned that more than 6 years
after 9/11, the Bush Administration is back once again to
report on more problems. The administration's approach to
securing our ports is unacceptable, and while they get the
technology in place for 100 percent scanning, we also need to
find additional ways to increase security at our ports.
To that end, I will soon introduce legislation which will
make real improvements to our port security programs and keep
our economy and families safe.
I look forward to hearing from our witnesses on these
critical issues. I thank you for being here. I would ask that
Jayson Ahern, who is the Deputy Commissioner for U.S. Customs
and Border Protection, be the first to speak. Mr. Ahern has
spent 32 years in public service, and I want to thank you for
your commitment to the country.
We will, after that, hear from David Huizenga, Assistant
Deputy Administrator at the U.S. Department of Energy. At the
Department, Mr. Huizenga is responsible for the Second Line of
Defense Program, which includes maritime security and the
Megaports initiative.
Stephen Caldwell is the Director of Maritime Security
Issues at the U.S. Government Accountability Office, and he has
written GAO reports on maritime legislation such as the SAFE
Port Act and the issues of port security and container
security.
So, once again, I thank each of you for joining us today,
for sharing your expertise with us. Mr. Ahern, if you will,
please. It is a 5-minute rule, as you know. Please give us your
testimony.
STATEMENT OF JAYSON AHERN, DEPUTY COMMISSIONER, U.S. CUSTOMS
AND BORDER PROTECTION, U.S. DEPARTMENT OF HOMELAND SECURITY
Mr. Ahern. Good morning Chairman Lautenberg, and thank you
very much for this opportunity to discuss the Secure Freight
Initiative, or SFI, and the recently released report on the
pilot ports.
First of all, I want to apologize to you and the rest of
the Committee and the staff for providing this report so late
in the process and after the April deadline, but we wanted to
make sure the information we provided was as complete and as
thorough as possible and we wanted to include the reviews of
our trade and our international partners as well.
I also want to thank the Members of this Committee for your
strong support of Customs and Border Protection as we work to
continue to provide the protection our nation is so necessarily
in need of. This Committee has been instrumental in the success
of CBP's cargo security strategy, as well as the passage of the
SAFE Port Act, which in itself represents an impressive
collaboration between the Congress and the Administration to
protect our nation.
In addition to requiring the SFI ports, the SAFE Port Act
codified a number of CBP supply chain security programs,
specifically our advance information requirements and automated
targeting systems, the Customs-Trade Partnership Against
Terrorism, the Container Security Initiative, and the use of
nonintrusive inspection technology to scan high-risk shipments.
These provisions reflect strong support for our current layered
risk-based approach to maritime and cargo security.
We continually point out that the layers of the strategy
are interdependent, different layers focus on securing
different parts of the supply chain. This ensures that cargo is
regularly assessed and that security does not rely on one
single point that could be easily compromised. Over the last
several years, we have dedicated significant resources to our
cargo and port security programs and this has resulted in a
strong risk management approach.
I am concerned, however, that while we continue to increase
resources for an initiative like SFI, we may be neglecting
other areas that could potentially pose a greater risk to the
country. While increased resources for programs such as SFI
have enhanced our ability to address maritime container
security vulnerabilities, it is important to recognize that 100
percent scanning does not equal 100 percent security. Risk
management and security must be driven by our informed judgment
and totality of the risks.
As directed by the Congress, last October we began testing
the feasibility of scanning 100 percent of U.S.-bound
containers in three SFI ports, in Honduras, Pakistan, and the
United Kingdom. From October to May of this year, we scanned
over 170,000 containers passing through these ports to the
United States.
Under SFI, an integrated scanning system, consisting of
radiation portal monitors provided by the Department of Energy
and nonintrusive inspection imaging systems provided by Customs
and Border Protection, scans containers as they move through
the foreign ports. The data from the SFI systems provide
additional data points that are used in conjunction with the
advance manifest information such as the 24-hour rule, C-TPAT,
and our automated targeting system so we can assess the
totality of the risk in each container coming to the United
States.
CBP and the Department of Energy are true partners, and my
counterpart, Mr. Huizenga, as a trusted colleague in the
Megaports program, has brought invaluable resources and
institutional knowledge to our effort.
As our report will show, we learned important lessons, both
positive and negative, from the pilots.
On the positive side, we benefited from considerable host
nation cooperation, low transshipment rates, as well as
technology and infrastructure, paid for primarily by the U.S.
Government, but we also recognize that such accommodations and
supportive conditions do not and will not exist in all ports
shipping to the United States.
The pilots also demonstrated that integrated imaging and
radiation detection equipment can produce useful data. The
additional data elements gathered at the foreign ports assist
Customs and Border Protection officers in mitigating risk and
resolving radiation alarms at a domestic seaport. This results
in enhanced data collection and more effective trade
facilitation.
But on the negative side or the side that presents the
greatest challenges, even with favorable conditions, we found
that deploying container scanning equipment at each of the SFI
ports has presented certain operational, technical, logistical,
financial, and diplomatic challenges, including reconfiguring
port layouts to accommodate the equipment without affecting
port efficiency, identifying who will incur the cost for
operating and maintaining the scanning equipment, concluding
agreements with partnering nations and terminal operators, and
staffing implications for the foreign customs service and
terminal operators.
But I would submit the most important and challenging issue
facing SFI is finding an effective and meaningful way to scan
transshipped containers. The initial pilots demonstrated that
technological and operational solutions are not yet available
to capture transshipped cargo efficiently. New equipment and
software must be developed to overcome the considerable
challenge of scanning containers that often transit through
ports quickly and without necessarily being placed on trucks or
passing through the front gates. So while additional data can
be useful, challenges and expenses are significant even in
these limited environments.
As a result of what we have learned so far, Customs and
Border Protection will focus future scanning deployments on
high-risk trade corridors since they pose the greatest threats
to the United States, prioritizing these deployments in a way
which will maximize the security benefit, and ensure that we
have the capacity to integrate the additional scan data into
our risk-based strategy. Considering the approximate 11.5
million containers in a maritime environment that enter the
United States annually, it is imperative that resources remain
focused on securing global commerce without interrupting the
flow of legitimate goods. To ensure these twin goals of trade
facilitation and security, CBP will continue to employ a
layered risk-based approach to security. Our judgments will be
based on the totality of risk we face from potentially
dangerous goods and people entering our nation.
Over the last several years, we have devoted much
discussion and effort to container security, but with our
layered defense strategy in place, we believe we must devote
equal energy and resources to other potential threats to U.S.
ports and other areas along our borders in the supply chain.
Thank you very much for the opportunity and I look forward
to dialogue on this issue with you today.
[The prepared statement of Mr. Ahern follows:]
Prepared Statement of Jayson Ahern, Deputy Commissioner, U.S. Customs
and Border Protection, U.S. Department of Homeland Security
Introduction
Chairman Lautenberg, Ranking Member Smith, and distinguished
Members of the Subcommittee:
Good morning and thank you for this opportunity to discuss the
Secure Freight Initiative (SFI) and the recently released report on the
initial pilot ports. I want to take this opportunity to apologize for
submitting the report past the April deadline. We wanted to ensure that
the report was as robust as possible and have worked hard to provide a
comprehensive assessment of the progress made at each of the seven
locations, detail the challenges and successes, and outline the future
strategy for the deployment of integrated scanning technology abroad.
I want to thank the Committee for its strong support of CBP. This
Committee played a central role in the passage of the Security and
Accountability for Every Port (SAFE) Act of 2006, legislation that
directed the Department of Homeland Security (DHS) to explore, on a
pilot basis, the feasibility and potential benefits of an international
scanning program at three foreign ports. I look forward to reporting
back to you on our experiences during these pilots and on some of the
lessons we have learned.
I would also like to take the opportunity to thank the foreign
governments and customs officials that have partnered with us
throughout this process, as well as the port and terminal operators and
other stakeholders whose support and collaboration was indispensible.
The SFI pilots have benefited from host nation officials and port
operators willing to expend, to varying degrees, the resources
associated with additional staffing, alarm response protocols,
construction and other infrastructure upgrades. Importantly, this
report also includes input from these industry and foreign government
partners.
Before discussing the SFI program, I must note that the success of
CBP's cargo security strategy stems from a risk-based, layered
enforcement approach. It includes advance information, sophisticated
technology, and partnerships with the trade community and other
countries. In addition to requiring the SFI pilots, the SAFE Port Act
supported the current layered, risk-based approach to maritime and
cargo security by codifying a number of supply chain security programs
that DHS established following the September 11, 2001 terrorist attacks
and which continue today. Specifically, the SAFE Port Act codified DHS'
advanced information requirements and automated analysis, the Customs-
Trade Partnership Against Terrorism (C-TPAT), the Container Security
Initiative (CSI), and the use of non-intrusive inspection (NII)
technology to scan high-risk shipments.
These programs form the backbone of CBP's risk-management, layered
enforcement strategy. To most effectively manage multiple threats to
our country, we must direct resources to areas of greatest risk. We are
constantly working to refine this layered process by strengthening our
tools and capabilities, working to maintain an appropriate balance
between the wide range of threats we face and allocating our limited
resources accordingly. It is important to reiterate that the layers of
this strategy are interdependent and that different layers secure
different parts of the supply chain. This approach ensures that cargo
is regularly assessed and that security does not rely on any single
point that could be compromised.
Although there has been much discussion about maritime container
security in recent years, we have also been--and must remain--focused
on other threats to our borders and to other components of the supply
chain. We must remain vigilant in securing all conveyances and in
screening passengers at our land borders, airports, railways, and small
vessel terminals. In fact, although we frequently refer to the 11.5
million containers arriving by sea, there are an equal number of truck
containers arriving across our land borders with Canada and Mexico.
While increased resources for programs such as SFI have enhanced
our ability to address maritime container security vulnerabilities, it
is important also to recognize that 100 percent scanning DOES NOT equal
100 percent security and that no single layer or tool in our risk-based
approach should be overemphasized at the expense of the others. The
strength of the strategy is that it ensures continuous security at
multiple nodes in the supply chain, distributing resources so that
focus on one threat does not overshadow other vulnerable areas that
could also be exploited.
The Secure Freight Initiative (SFI)
Now I'd like to turn my attention to the international integrated
scanning program under the Secure Freight Initiative (SFI).
Under SFI, an integrated scanning system, consisting of radiation
portal monitors (RPM) provided by DOE/National Nuclear Security
Administration and non-intrusive inspection (NII) imaging systems
provided by CBP, is used to scan containers as they move through the
pilot locations in the foreign ports. Through optical character
recognition (OCR) technology, data from these systems is integrated and
provided to CBP officers who can use it, along with customary data
sources, to determine if the container should be referred to the host
nation for secondary examination prior to being loaded onto a vessel
destined for the United States. SFI provides additional data points
used by CBP officers in conjunction with advanced manifest data, such
as 24-hour rule information, Customs-Trade Partnership Against
Terrorism (C-TPAT) information, and the Automated Targeting System
(ATS) to identify high risk containers that warrant additional scrutiny
prior to continuing on through the global supply chain.
Meeting the legislative requirements of the SAFE Port Act, the
first three SFI ports (Puerto Cortes, Honduras; Port Qasim, Pakistan;
and Southampton, United Kingdom) became fully operational on October
12, 2007. Under SFI, DHS and DOE work to scan all U.S.-bound maritime
containers; the total U.S.-bound container volume at these three ports
from October 12, 2007 to May 25, 2008 was 170,564 containers.
Furthermore, CBP and DOE are working to pilot scanning equipment in
additional complex environments, such as high-volume and transshipment
ports. These additional locations include certain terminals in Hong
Kong (which is now fully operational); Salalah, Oman and Port Busan,
South Korea.
With the three initial SFI pilot ports in Honduras, the United
Kingdom, and Pakistan, CBP has focused its efforts on exploring methods
by which efficient operation (defined as maximizing the security
benefit, minimizing disruptions to port operations, and containing
costs) could be achieved within the deadline prescribed by law (the
SAFE Port Act and the 9/11 Act). The SFI deployments in Honduras, the
United Kingdom, and Pakistan indicate that scanning U.S.-bound maritime
containers is possible on a limited scale.
However, SFI operations in these initial locations benefited from
considerable host nation cooperation, low transshipment rates, and
technology and infrastructure costs covered primarily by the United
States Government--accommodating and supportive conditions that do not
exist in all ports shipping to the United States.
As will be discussed in more detail, the data obtained by the
scanning technology does have the potential to enhance targeting by
providing two additional data points (RPM spectra and NII images) to
the information and tools already available to CBP officers. CBP is
committed to a realistic and responsible approach that will incorporate
these scan data points into our risk-based methodology in places where
the additional information would be of the most benefit to our
targeters.
SFI Challenges
The pilots have demonstrated that not just scanning equipment, but
a combination of technology, processes, and collaboration is necessary
to a successful scanning system; additional necessary factors include
innovative solutions to operational hurdles, useful data that is
collected, analyzed and primed to enhance targeting, a collaborative
approach with the international community and port operators, and
perhaps most importantly, responsible and practical policies informed
by the totality of the threats to which the U.S. remains vulnerable.
The continuation of operations in some of the current SFI pilot
locations will afford CBP the opportunity to further test possible
solutions to the complex challenges posed by transshipment and high-
volume ports. . While we continue to learn important lessons in these
initial pilot locations, CBP will focus future scanning deployments on
high-risk trade corridors that represent the greatest threats to the
United States. Prioritizing deployments in this way will maximize the
security benefit that can be achieved with limited departmental funds
and ensure that CBP has the capacity to compile, assess, and integrate
the additional scan data into its effective, functioning risk-based
strategy.
Thus far, the deployment of container scanning equipment at each of
the SFI ports has presented certain operational, technical, logistical,
financial, and diplomatic challenges that will likely continue to be
encountered, to varying degrees, as SFI deploys to additional
locations. These challenges include:
Sustainability of the scanning equipment in extreme weather
conditions and certain port environments;
Varying costs of transferring the data back to the United
States (National Targeting Center) in real-time, etc.;
Re-configuring port layouts to accommodate the equipment
without affecting port efficiency;
Developing local response protocols for adjudicating alarms;
Addressing health and safety concerns of host governments
and respective trucking and labor unions;
Identifying who will incur the costs for operating and
maintaining the scanning equipment;
Acquiring necessary trade data prior to processing
containers through the SFI system;
Addressing data privacy concerns in regards to the scanning
data;
Concluding agreements with partnering nations and terminal
operators to document roles and responsibilities regarding
issues such as: ownership, operation, and maintenance of the
equipment; sharing of information; and import duty and tax
considerations;
Staffing implications for both the foreign customs service
and terminal operator;
Licensing requirements for the scanning technology;
Reaching agreement with foreign and industry partners to
continue scanning 100 percent of U.S.-bound containers after
the pilot ends; and
Discussing the potential requirements for reciprocal
scanning of U.S. exports.
While these challenges are consistent at our pilot ports, the
remedies must be specifically tailored to the unique characteristics of
each port. One example of a challenge requiring different fixes in each
location was the different level of automation, with paper-based rather
than computerized systems, in some of the initial SFI ports. In many
situations, containers can arrive at the port up to several days before
they are loaded on vessels. If containers arrive more than one day
before lading, then CBP will not yet have the container's corresponding
trade information, received under the 24-hour rule. Without information
about what is in the container or whether it is U.S.-bound, resolving
an RPM alarm or image anomaly is more difficult. CBP addressed this
challenge in a variety of ways, including agreements with customs
partners, terminal operators, and carriers for access to certain
information (such as destination and commodity descriptions to identify
U.S.-bound containers) that assisted with the risk assessment process
and adjudication of radiation alarms. Those ports that lack an
automated system will provide additional challenges for providing
manifest and destination information to CBP.
One challenge has proven particularly difficult to overcome:
operating these systems in a transshipment port. The initial SFI pilots
have demonstrated that technical and operation solutions are not yet
available to capture transshipped cargo efficiently. New equipment and
software must be developed to address the considerable challenge of
scanning containers that often transit through ports quickly and
without necessarily being placed on trucks or passing through port
gates. To date, SFI has progressed on a limited scale in ports that
take advantage of the natural chokepoints of entry and exit gates to
scan containers. This approach typically prevents significant impact on
port operations, but is not applicable in heavy transshipment ports
where containers arrive on one ship and depart on another without
entering or exiting through the port gates. Because of shorter dwell
times for containers, space constraints, lack of immediate availability
of shipping data, and the difficulty of identifying chokepoints within
busy container terminals, capturing transshipped cargo without
seriously impacting port operations remains a significant challenge.
Solutions to this challenge will depend upon the specific
infrastructure conditions at any given port, technology interface
issues, and the development of operational procedures in concert with
host nation and port officials. Advances in technology that require a
smaller physical footprint are also essential to any future large-scale
implementation of SFI.
The initial deployments under SFI also demonstrate the significant
costs associated with procuring and deploying scanning technology and
the supporting information technology (IT) infrastructure. With the
announcement of SFI in 2006, DHS and DOE each committed approximately
$30 million toward the implementation of SFI at the initial three ports
and the installation of equipment at three additional ports where
integrated scanning is to be demonstrated on a limited scale.
Costs to industry and foreign partners were minimized during the
initial SFI pilot by the use of primarily U.S.-owned systems in SFI
ports, as well as U.S.-funded upgrades to terminal operating systems
(TOS) and enhancing the local IT infrastructure. In addition to costs
incurred by the U.S. Government associated with SFI scanning, the
terminal operators are also absorbing costs in the form of fuel for the
trucks, time to run containers through the systems, and utilities. With
the exception of Puerto Cortes, terminal operators do not presently
assess a fee to recoup their costs; however, they may begin to do this
after the pilot phase. Additionally, our foreign Customs partners are
absorbing costs associated with increased staffing levels including
overtime, training, and personnel assigned to full-time operations.
Although DHS and DOE funded the initial phase of SFI deployments,
the equipment, IT, and personnel costs associated with expanding the
program to cover all U.S. bound traffic from the more than 700
different ports that ship to the United States--some significantly
larger and more complex than any of the first three pilots--means that
the benefit of immediate widespread deployments must be weighed against
the Department's funding needs to address other homeland security
priorities.
While RPM spectra and NII images can be useful additional data
points for evaluating the risk of U.S.-bound containers, the lack of
universal solutions to make scanning cost-effective and efficient in
every port underlies the Department's strategy to focus future SFI
deployments on trade corridors that present the highest risk. Gathering
scan data from these high risk corridors will provide additional
information, consistent with the Department's successful layered
strategy, for CBP targeters, enhancing risk assessments in the most
vulnerable areas without overwhelming the Department's budget,
personnel resources, and ability to defeat other serious threats to the
homeland.
SFI Benefits
While highlighting many challenges, the SFI pilots have also
produced valuable and positive feedback. SFI, in the initial three
ports, has demonstrated the operational feasibility of integrating
various scanning technologies and transmitting large amounts of data in
near-real time for review and analysis. SFI has also demonstrated that
scanning data associated with maritime containers at a port of lading
can be integrated into CBP's ATS and reviewed alongside the targeting
system's risk assessment rule sets. This information can be
successfully integrated by electronically linking specific container
identification data to that container's scanning data. To date, CBP has
successfully integrated, transmitted, and received thousands of data
files from the three operational ports.
Additionally, a preliminary analysis of the potential trade
facilitation benefits of SFI has been positive. Containers arriving in
the United States accompanied by SFI data do not experience the same
rate of examination at U.S. ports as containers that originate from
non-SFI locations. As well, the additional data elements gathered at
the foreign port assist CBP officers in more quickly and efficiently
mitigating risk and adjudicating radiation alarms occurring at a
domestic seaport.
SFI Potential Operation in Additional Ports
As noted earlier, the implementation of SFI in Pakistan, Honduras,
and the United Kingdom, and the limited testing in the four other SFI
locations, illustrates that the scanning of all U.S.-bound maritime
containers in a foreign port is possible on a relatively contained
scale. As DHS, in conjunction with the DOE and the DOS, develops a
specific policy forward, we will prioritize our resources and efforts
by focusing on specific higher risk trade corridors where the most
security benefit can be realized. Based on preliminary results from the
three pilot locations, and in light of the considerable costs and
challenges associated with the deployment of SFI/ICS systems, this high
risk trade corridor approach accords with the current risk-based
strategy, best addresses the greatest threats to the United States, and
represents the most worthwhile investment of limited available
resources for the scanning of cargo containers at foreign ports.
The issue of container security has precipitated much discussion
and effort over the last several years, but the Department has also
been, and must remain, attuned to other threats to U.S. ports and other
potentially vulnerable components of the supply chain. DHS and Congress
have dedicated significant resources and efforts to our cargo and port
security programs which have been instrumental in the development of
the robust layered and risk-management approach currently in place. We
are always eager to enhance these layers and even further refine our
targeting to ensure that we focus on those goods and people that
represent a threat to our nation. I'm concerned, however, that while we
continue to increase resources specifically for container security
initiatives, like SFI, we could be neglecting other areas of concern
that potentially pose greater risk and vulnerability to the country.
Again, a risk management approach to security has to be driven by our
informed judgment about the totality of potential risks to the country,
not just risks to a single vector.
Furthermore, traffic congestion brought upon by the movement of
shipping containers is a threat to the global economy. The United
States is especially vulnerable since over 90 percent of its imports
and exports move via sea container. As a nation, and as a global
trading partner, we must prioritize our security efforts to embrace the
principle ``to facilitate the movement of commerce'', and align
security programs with those efforts that enhance cargo flow through
the supply chain in a transparent and accountable process. In this way,
transportation providers may be more effective and efficient in
protecting our prosperity and those of other trading partners.
Thank you again for this opportunity to testify. I look forward to
having a dialogue with this Subcommittee on the merits and future of
container scanning.
Senator Lautenberg. Thank you very much, Mr. Ahern.
Now, do you pronounce your name Huizenga or Huizenga?
Mr. Huizenga. The former, Mr. Chairman. Huizenga.
Senator Lautenberg. Yes, the hockey team owner and that
kind of thing?
Mr. Huizenga. Yes. I am not sure if I am a distant relative
of Uncle Wayne. It is not clear.
Senator Lautenberg. It is worth the search.
[Laughter.]
Mr. Huizenga. We could start a rumor I guess.
[Laughter.]
Senator Lautenberg. Welcome and we invite you to give your
testimony.
STATEMENT OF DAVID HUIZENGA, ASSISTANT DEPUTY
ADMINISTRATOR, OFFICE OF INTERNATIONAL MATERIAL
PROTECTION AND COOPERATION, DEFENSE NUCLEAR
NONPROLIFERATION, NATIONAL NUCLEAR SECURITY
ADMINISTRATION, U.S. DEPARTMENT OF ENERGY
Mr. Huizenga. Thank you, Chairman Lautenberg, for the
opportunity to be here today, along with Deputy Commissioner
Ahern and the General Accounting Office to address this
important issue.
I am here to discuss the Department of Energy's role in the
Secure Freight Initiative, which is a partnership with the
Department of Homeland Security's Customs and Border Protection
and the State Department. I will highlight recent progress in
our efforts to thwart nuclear terrorism, as well as discuss key
challenges to accelerating and expanding radiation scanning of
U.S.-bound containers at foreign seaports, as required by the
SAFE Port and
9/11 Acts.
For the last 15 years, my office has focused on securing
nuclear materials and weapons at well over 100 facilities in
Russia and other states of the former Soviet Union. This is the
first line of defense in a strategy to deny terrorists access
to fissile materials, or the essentials elements of a nuclear
weapon. We are scheduled to complete the vast majority of the
security upgrades at these facilities by the end of 2008.
As a natural complement to these efforts, in 1998 we
established the Second Line of Defense Program, or the SLD
program. As part of the defense-in-depth strategy to protect
the U.S. homeland from attack by a nuclear or radiological
device, the SLD program provides equipment and training to
foreign authorities to help them detect, deter, and interdict
illicit trafficking in nuclear and other radioactive materials.
To date, we have installed over 1,000 radiation portal monitors
at over 160 sites, including vehicle, rail and pedestrian
border crossings, airports and seaports.
The Second Line of Defense's Megaports Initiative was
launched in 2003 to address the possibility of nuclear
trafficking in the global maritime shipping system. Megaports
is focused on radiation scanning of containerized cargo,
including imports, exports, and transshipments, regardless of
the destination of the cargo. Based on research and modeling
that takes into account both shipping volume and regional
threat, Megaports has identified approximately 75 ports of
interest to be equipped by 2013, which would constitute over 50
percent of the global shipping traffic. We have made strong
progress toward this goal. We are operational in 12 ports and
in various phases of implementation and engagement in 27
others.
For several years, the Megaports program has partnered with
CBP on its Container Security Initiative, which led naturally
to working together on the Secure Freight Initiative. In
support of the SFI, we provided radiation detection equipment,
optical character recognition technology, integrated software
and communications systems, as well as training and maintenance
to support the host and U.S. Government officials at the SFI
ports.
So what have we learned from the SFI work and where do we
go from here?
I believe that the SFI pilots have demonstrated that 100
percent scanning of U.S.-bound containers is possible, albeit
on a limited scale. For example, we have been able to integrate
the radiation scanning equipment with the nonintrusive imaging
equipment provided by CBP, thus providing a more powerful tool
for detecting shielded nuclear materials by allowing us to look
for anomalies in the container, as well as for a radiation
alarm. We have been able to transmit large amounts of data on
U.S.-bound containers to the local CSI representatives and to
CBP in the U.S. for analysis and have provided this and other
data to the host governments. We also used the pilot effort in
Southampton in the U.K. to demonstrate the usefulness of an
advanced spectroscopic portal as a secondary inspection tool.
All of this has been accomplished without seriously impacting
port operations.
Nonetheless, certain key challenges have been identified
through the pilot port effort. From a technology and
operational perspective, the most fundamental challenge is to
find a way to capture transshipped cargo without seriously
impacting port operations. Since transshipped containers do not
pass through any entry or exit gate, there is no clear choke
point at which the radiation portal monitors and the imaging
equipment can be deployed. The operators of large transshipment
ports have been consistent in pointing out the operational
difficulty of scanning such cargo.
In an attempt to overcome this hurdle, we have been working
on several innovative approaches to scan transshipped cargo
through the use of straddle carriers as mobile radiation
detection devices, and working with CBP and DNDO, on an
investigation of crane-mounted detectors. While we are not
there yet and the testing continues, some of these technologies
appear to hold promise. I would point out, though, that while a
solution to transshipped containers may be in the works for
radiation detection, it is unclear if such solutions are
applicable for the imaging component of SFI in the near term.
The second obvious challenge is cost. Even if the
technology is developed to effectively scan 100 percent of the
U.S.-bound containers with both imaging and detection systems,
it may not necessarily be a cost-effective risk management
strategy to equip the 700-plus ports that ship directly to the
United States. To maximize our efforts to successfully combat
nuclear terrorism, we believe we must strive for an effective
layered strategy that addresses multiple threats and risks. We
cannot neglect our other priority areas of concern, for
example, the First Line of Defense, by putting all of our
resources into the latter, into the Second Line of Defense.
In an attempt to address this issue, we have developed
cost-sharing arrangements with several SLD and Megaports host
partner nations. We also are discussing various models with
private industry and encouraging them to integrate scanning
into their future port operations. We intend to work closely
with CBP and the State Department to promote a risk-based
approach to guide implementation priorities.
Another challenge identified through the pilot port effort
concerns data sharing. One of our lessons learned has been the
difficulty of overcoming laws that prohibit such sharing of
information or, alternatively, the lack of a legal framework
that will allow us to negotiate such data sharing. These issues
must be addressed on a case-by-case basis as they are a point
of sensitivity with our partners.
This leads, of course, to the final challenge and that is
the need to ensure host nation and terminal operator buy-in.
None of these programs overseas will be successful without
their direct support.
In summary, the concept of scanning 100 percent of U.S.-
bound----
Senator Lautenberg. Please conclude as----
Mr. Huizenga.--containers overseas has proven to be viable
in some ports, and we believe that in light of the lessons
learned, a balanced risk-based approach to the deployment of
the systems is the best use of available resources.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Huizenga follows:]
Prepared Statement of David Huizenga, Assistant Deputy Administrator,
Office of International Material Protection and Cooperation, Defense
Nuclear Nonproliferation, National Nuclear Security Administration,
U.S. Department of Energy
Introduction
Thank you Chairman Lautenberg, Ranking Member Smith, and other
distinguished Members of the Subcommittee. I am the Assistant Deputy
Administrator for the Department of Energy--(DOE) National Nuclear
Security Administration's (NNSA) Office of International Material
Protection and Cooperation (IMPC). My office is one of six program
offices within the Office of Defense Nuclear Nonproliferation (DNN).
The collective mission of DNN is to detect, prevent, and reverse the
proliferation of weapons of mass destruction. Our programs are
structured in support of multiple layers of defense against nuclear
terrorism and state-sponsored nuclear proliferation. This multi-layered
approach is intended to identify and address potential vulnerabilities
within the international nonproliferation regime, to limit terrorists'
access to deadly weapons and material, and to prevent the illicit
trafficking of dangerous materials that could be used in a nuclear or
radiological weapon.
Today, I will be discussing NNSA's Megaports Initiative and our
role in the Secure Freight Initiative (SFI). I would like to highlight
recent progress made under SFI and Megaports. I will also address some
of the positive lessons learned from the SFI Pilot deployments and key
hurdles that we will have to overcome in order to accelerate and expand
the radiation scanning of U.S.-bound containers at foreign seaports as
required by the Safe Port and 9/11 Implementation Acts. In short,
building on decades of experience securing nuclear materials in DOE's
nuclear weapons complex, NNSA is supplying radiation detection
equipment and relevant training to the SFI ports to scan containers for
the presence of nuclear and other radioactive materials that could be
used by terrorists to fabricate a nuclear or radiological dispersal
device.
In summary, we have learned a lot from SFI pilot implementation.
The SFI deployments in Honduras, the United Kingdom, and Pakistan
indicate that scanning U.S.-bound maritime containers is possible on a
limited scale. We have proven that we can effectively integrate data
from radiation detection equipment and non-intrusive imaging equipment
to improve our overall detection capability, and that we can take this
large amount of data and transmit it near real-time to the United
States for analysis. While we have been successful at these three
locations, transshipment continues to present the greatest challenge to
fully implementing the 100 percent scanning requirements. It is clear
that obtaining buy-in from the foreign governments and key stakeholders
at the port is critical to success. Overall, the concept of scanning
U.S.-bound containers overseas has proven to be viable in some cases,
but we continue to believe that a risk-based approach to deployment of
these systems is the best use of available resources.
We know that the threat of nuclear terrorism is real. It is common
knowledge that AlQa'ida's desire to develop weapons of mass destruction
goes back at least 10 years. But we also know that ongoing nuclear
detection efforts have successfully resulted in seizures of nuclear and
radiological materials--underscoring the importance of the nuclear
detection mission. For example, in 2003, Georgian border guards, using
U.S.-provided portal monitoring equipment at the Sadakhlo border
crossing with Armenia, detected and seized approximately 173 grams of
highly enriched uranium (HEU) carried by an Armenian national. Also, in
late 2005, a Megaports radiation portal monitor (RPM) picked up a
neutron signal from a scrap metal container leaving Sri Lanka bound for
India. The source of the signal turned out to be an extremely small
commercial neutron source, which was found by the Indian authorities.
More recently, in November 2007, several Cesium-137 sources were
detected in a container of scrap metal leaving Honduras bound for a
smelting facility in the Far East. An NNSA team assisted the Honduran
Government with the recovery of the industrial sources, preventing
those sources from reaching, and possibly contaminating, the facility.
These examples provide clear evidence that detection systems are
effective in alerting us to the presence of very small quantities of
radioactive material and therefore play an important role in our
efforts to combat the threat of nuclear terrorism.
Overview of the Material Protection Effort
For the last 15 years, the IMPC office has focused on securing
nuclear materials and weapons at well over 100 research, storage and
manufacturing facilities in Russia and other states of the Former
Soviet Union. Our longstanding nonproliferation programs in
international safeguards and export controls have existed for more than
30 years, but the dramatic increase in our efforts to secure nuclear
material took place in the years following the demise of the Soviet
Union. All of our efforts are centered on the premise that confronting
the threat of nuclear terrorism as close to the source as possible, far
from our borders, is the most effective means to reduce the risk of an
attack. This focus on securing nuclear weapons and materials in-place
is the first line of defense in our strategy to deny terrorists access
to the essential element of a nuclear weapon--fissile material. We are
scheduled to complete the vast majority of the nuclear security
upgrades at these facilities by the end of 2008 as part of the
Bratislava Agreement between President George W. Bush and then-Russian
President Vladimir Putin.
Second Line of Defense (SLD) Program
The Second Line of Defense (SLD) Program--the other mission area of
my office--is a natural complement to these activities and supports the
multi-layered defense system to protect the U.S. homeland from attack
by a nuclear or radiological dispersal device. The mission of the SLD
program is to strengthen the capability of foreign governments to
deter, detect, and interdict illicit trafficking in nuclear and other
radioactive materials across international borders and through the
global maritime shipping system. Under this program, NNSA works
collaboratively with foreign partners to equip border crossings,
airports and seaports with radiation detection equipment. SLD provides
training in the use of the systems for appropriate law enforcement
officials and initial system sustainability support while the host
government assumes long-term responsibility for the system's operations
and maintenance. To date, under the SLD Program, NNSA has installed
over 1,000 radiation portal monitors (RPMs) at over 160 sites. The SLD
Program has recently awarded contracts to three teams at a value of up
to $700 million for the equipment, design, integration, and
construction expertise to support the deployment of systems in
additional locations. The SLD program is divided into two areas: the
Core Program and the Megaports Initiative.
Under our Core Program, NNSA focuses primarily on partnerships in
Russia, former Soviet states, and Eastern Europe to install radiation
detection systems at land borders, international airports, and
strategic feeder ports. The SLD Core Program started in 1998 in Russia.
Since its inception, the Core Program has worked closely with the
Federal Customs Service of the Russian Federation to deploy radiation
detection systems to international crossing points throughout Russia.
With our Russian colleagues, we have committed to equip all border
crossings in Russia (approximately 350 sites) by 2011. Russian Customs
is a full partner in this effort and is paying to equip approximately
half of these sites themselves. In addition, they will be assuming
responsibility for the maintenance of all equipment deployed under this
program by 2013.
Megaports Initiative
Building on the experience we have gained by equipping 20 seaports
in Russia under the SLD Core Program, in 2003 we expanded the scope of
the program to consider large seaports worldwide with the establishment
of the Megaports Initiative. This effort was developed in response to
the concern that terrorists and states of concern might use the global
maritime shipping network to smuggle nuclear or other radioactive
materials to locations where terrorists could utilize those materials
to fabricate or detonate a nuclear weapon or radiological dispersal
device. The goal of the Megaports Initiative is to scan as much
container traffic at a port as possible (including imports, exports,
and transshipments) regardless of destination.
We began with a focus on the first 20 seaports in the Department of
Homeland Security's Container Security Initiative (CSI), i.e., the
ports shipping the largest volumes of containerized cargo to the United
States. Supported by consultations with the Intelligence Community,
private-sector specialists, and our national laboratories, we later
added a threat component to our prioritization strategy. As a result,
we identified approximately 75 ports of interest (i.e., a little over
10 percent of the total number of container ports shipping directly to
the United States) for the deployment of our systems. We update this
list periodically based on new information.
I am pleased to report that we have made significant progress on
the Megaports Initiative over the last 5 years. We are currently
operational in 12 ports (including the three ports selected as pilots
under the Department of Homeland Security's Secure Freight Initiative
and as mandated by the 2006 SAFE Port Act). We are at various phases of
implementation and testing in 27 additional ports. We expect to
complete eleven of these ports by the end of this Fiscal Year. We are
finalizing agreements with a number of additional countries and
continue to conduct outreach and planning activities with approximately
30 other major international seaports in anticipation of implementation
in the future. Our goal is to equip approximately 75 priority ports by
2013, at which point we estimate that we will be scanning over 50
percent of global shipping traffic.
Support to Secure Freight Initiative
NNSA has been partnering with the Department of Homeland Security's
Customs and Border Protection (CBP) for several years on its container
security initiatives. The synergy between the Megaports Initiative and
the Container Security Initiative (CSI) is an important element in
ensuring the security of U.S.-bound containers--radiation detection
equipment provided by NNSA under the Megaports Initiative provides an
additional tool that enhances risk assessment and targeting activities
at foreign seaports in support of CSI. NNSA has participated with CBP
on joint outreach missions and has signed seven agreements jointly with
CBP and our international partners to implement both Megaports and CSI.
Because of the success of the Megaports Initiative and our ongoing
relationship with CBP, partnering on the Secure Freight Initiative
(SFI) mission was a natural fit.
In support of SFI, NNSA has provided radiation detection equipment,
and associated optical character recognition (OCR) technology,
integrated software and communications systems, as well as training and
maintenance support, to host and U.S. Government officials at SFI
ports. SFI builds upon existing port security measures by utilizing the
OCR technology to integrate data from radiation detection and non-
intrusive imaging equipment, along with data from secondary inspection
equipment, thereby providing more comprehensive information about U.S.-
bound containers that strengthens existing risk assessment efforts.
SFI Pilot Lessons Learned and Challenges to 100% Scanning
Let me start by stating that the SFI pilots have demonstrated that
100 percent scanning of U.S.-bound containers is possible on a limited
scale. Operationally, we have been able to demonstrate three different
approaches to integrated scanning of the U.S.-bound containers at
overseas ports that provide valuable lessons learned as we look to
expand scanning efforts to additional ports. We were able to
demonstrate both the feasibility of transmitting large amounts of data
in near-real time for review and analysis by CBP and the host nation,
and the successful integration of multiple sets of data by
electronically linking container ID number to scanning data through use
of OCR technology. Coupling radiation scans with imaging efforts
increases our chances of detecting shielded HEU, because the image
allows us to look for anomalies within the contents of the shipping
container that might indicate shielding and therefore warrant further
inspection. Under SFI, we have demonstrated that these two technologies
can be integrated effectively without negatively impacting the flow of
commerce, albeit at relatively small ports. We were also able to take
advantage of the SFI pilot project in Southampton England, to
demonstrate the use of an advanced spectroscopic portal (ASP) as a
secondary inspection tool that should dramatically improve the
secondary inspection process in terms of reliability, process time, and
manpower requirements. Based on lessons learned and the results of the
pilot in Southampton, we plan to deploy ASPs to additional Megaports
around the world for use in secondary inspections.
Additionally, our partnership with CBP on SFI implementation has
been successful and the roles and responsibilities have been well
defined. As we have done in our cooperation with CBP for the last
several years, we continue to explore ways to maximize use of NNSA and
CBP resources, in order to streamline SFI implementation and avoid
duplication of efforts.
Nonetheless, in addition to the positive lessons learned from the
SFI pilot ports, there are still several challenges to implementing 100
percent scanning of all U.S.-bound containers at overseas ports. We
believe that scanning U.S.-bound containers overseas is possible at
some locations; however, scanning every U.S.-bound container at a
foreign port before it arrives in the United States presents
significant operational, technical, cost, and diplomatic challenges.
There are a few challenges, in particular, that I would like to focus
on as these have the most direct impact on NNSA and the Megaports
Initiative.
Transshipment
First, while the operational Megaports and the SFI pilot ports have
shown that gate traffic can be easily captured by taking advantage of
existing chokepoints into and out of a port, transshipped cargo
continues to present a significant challenge for both SFI and Megaports
implementation. Because of shorter dwell times for containers, space
constraints, availability of shipping data, and the difficulty of
identifying chokepoints within the container terminals, capturing
transshipments without seriously impacting port operations requires new
and creative solutions.
From a technical standpoint, NNSA has been innovative in its
approach to scanning transshipped containers. The first mobile
detection platform, a straddle carrier, was deployed at the Port of
Freeport in the Bahamas in June 2006 using both plastic Polyvinyl
Toleune (PVT) for primary detection and a spectroscopic detector for
secondary isotopic identification. NNSA, working in conjunction with
the terminal operator, Hutchison Port Holdings, has successfully
scanned over 730,000 containers at Freeport Container Terminal. We will
soon be issuing a request for proposals to provide straddle carriers
equipped with radiation detectors at additional transshipment ports.
NNSA is also evaluating a new mobile platform for scanning
transshipped containers on the quay at the Port of Salalah, Oman. The
mobile system will increase the number of transshipped containers that
can be scanned as well as improve the effectiveness and efficiency of
the scanning process of transshipped containers with the same
efficiency as fixed monitors. Containers will be scanned using the
Mobile Radiation Detection and Identification System (MRDIS)--utilizing
a plastic PVT for primary detection and a second MRDIS unit with
spectroscopic detectors for secondary isotopic identification.
NNSA is currently analyzing crane-based technology, which, if
proven effective for the radiation detection component, would improve
our ability to scan transshipped containers. In this regard, we are
working closely with our colleagues at CBP and at the Domestic Nuclear
Detection Office (DNDO) in evaluating private-sector efforts to develop
a crane-based radiation detection system utilizing existing spreader-
bar technology. We recently conducted a suite of tests on a spreader-
bar in the Port of Oakland, California, and will be participating in
CBP's upcoming evaluation of spreader-bar systems at their test bed at
the Port of Tacoma, WA. We anticipate conducting additional testing and
analysis on the effectiveness of these systems at one of our national
laboratories later this summer.
While we are hopeful that these technologies will help address the
transshipment issue for radiation scanning, it is currently unclear if
it would be possible to pursue similar technological solutions to
conduct the complementary non-intrusive imaging (NII) scan. In the near
term, coupling radiation scans with NII operations at transshipment
ports is likely to continue to pose significant technological and
operational challenges.
Cost
Moving beyond operational and technical challenges, there is also a
significant cost to scanning all U.S.-bound containers before they
reach the homeland. Even if technology is developed to effectively scan
100 percent of U.S.-bound containers with both the detection and
imaging systems without impacting port operations, it may not
necessarily be a cost-effective risk management strategy to equip the
700+ ports that ship directly to the United States. As I mentioned
earlier, Megaports and SFI are two programs that support a multi-
layered approach to increasing our security against nuclear and
radiological threats and defending the homeland from terrorist attacks.
We need to ensure that we continue to expand nuclear detection and
container security efforts overseas without neglecting other areas of
concern that potentially pose greater risk and vulnerability to the
country. For example, NNSA also has a responsibility to apply resources
and efforts to broader nonproliferation programs including our
international material protection program--securing materials at the
source--and the SLD Core Program. We must strive for an effective
layered strategy that addresses multiple threats and risks in order to
reduce the likelihood that dangerous materials will fall into the hands
of terrorists. NNSA will continue to promote the use of a risk-based
approach to guide implementation priorities to scanning U.S.-bound
containers. We will work closely with our interagency partners to
prioritize countries and ports as we move ahead with the Megaports
Initiative and implementation of SFI, as this approach allows us to
utilize our resources and funding in the most effective way.
One obvious way to address the cost of overseas scanning is to
encourage cost-sharing with host governments and with private industry.
Indeed under the Megaports program, we are finding ways to do this
where we provide equipment and training and the host government is
responsible for design, construction and installation costs. We are
also discussing various models with industry and encouraging them to
integrate scanning into their fundamental port operations. Beyond
purchasing and installing radiation detection equipment, an integrated
scanning system requires effective staffing levels to assess and
respond to radiation alarms and image anomalies. Our host nation
partners (both government and private sector) will also have to absorb
costs associated with increased staffing levels including overtime,
training, and personnel assigned to full-time operations.
Data Sharing
Our partnership with the host government also relies on the
exchange of information, including scan and image data. One of the
lessons learned during the SFI pilot phase is that for some countries,
the data sharing requirement presents a significant challenge, either
because there are specific laws that prohibit or limit the provision of
this type of information or because there is no existing legal
framework to allow it to happen. These concerns, along with the issue
of reciprocal provision of information on cargo leaving the U.S., will
need to be addressed if we continue to expand SFI.
Information exchange is also an important element of the Megaports
Initiative. Under Megaports, we have been able to address this issue by
limiting the information we receive to data on detections and seizures
and by developing specific data-sharing formats; however, it is
important to note that data under Megaports is not received in real-
time. It is provided to CSI if in-country and to the Embassy.
Stakeholder Partnerships
Which brings me to the last point . . . a critical aspect to
implementation of scanning initiatives is host nation and terminal
operator buy-in. I cannot underscore enough that SFI or Megaports
Initiative implementation cannot be successful without the partnership
of the host nation, port authority, terminal operators, and other key
stakeholders at the port. We have been very successful where we have
strong partnership with our host nation partners. Alternatively, we
have had considerable implementation challenges where we have not. For
that reason, we will continue to partner with CBP to conduct joint
outreach missions in attempt to garner both host government and
private-sector support for these critical initiatives. We believe that
integrating security measures into the design and business practices of
the supply chain will improve security with the least amount of
disruption to legitimate trade and could ultimately reduce costs
through increased efficiencies. NNSA will continue to work closely with
DHS, host nations, and the major marine terminal operators to develop
and implement strategies for increasing container security without
impacting port operations.
All in all, the lessons learned during Phase I of SFI
implementation have provided us with useful information on how to move
ahead with our nuclear detection efforts in the future. However, there
are many hurdles and significant costs associated with 100 percent
scanning of U.S.-bound containers that need to be carefully considered
as we move forward with the SFI program.
Conclusion
In summary, NNSA is committed to continue to expand our Megaports
program to scan overseas containers independent of destination and
partner with CBP in the SFI efforts to scan U.S.-bound containers. As
we consider the expansion of SFI, I believe that NNSA and CBP should
continue to work together to identify the ports at which we would like
to work by applying the principles of risk-based prioritization, which
include both volume and regional threat. We have both utilized such
approaches successfully in the past.
We will also continue to work with DHS and the private sector to
explore new concepts of operation that will enable us to scan more
containers and to investigate new technologies to scan transshipped
containers without impacting port operations. We will continue to
advocate with the major marine terminal operators that partnering with
NNSA and DHS on these container security initiatives makes good
business sense.
Finally, while NNSA will continue to support SFI implementation,
the Megaports mission has proven to be an important element of our
multi-layered defense strategy both from a nonproliferation and
counter-terrorism perspective. Indeed, the program is already
operational in 12 ports around the world and several more ports should
go operational this year. NNSA will continue to push forward with the
Megaports Initiative to meet our goal of 75 Megaports by 2013.
I want to thank Congress for their continued support of our
program. I hope that the information that I have provided will be
useful to the Subcommittee as it considers the SFI pilot project and
the future of SFI implementation.
Thank you. I would be happy to answer any questions you may have.
Senator Lautenberg. Thank you very much.
Mr. Caldwell?
STATEMENT OF STEPHEN L. CALDWELL, DIRECTOR,
HOMELAND SECURITY AND JUSTICE ISSUES,
U.S. GOVERNMENT ACCOUNTABILITY OFFICE (GAO)
Mr. Caldwell. Thank you very much, Chairman Lautenberg, for
inviting me here to testify on our supply chain security work.
My statement is based on about 5 years' worth of work that
GAO has done on supply chain security. Through that time, we
have noted that DHS has made progress in a number of ways in
developing these programs as part of its layered security
strategy to prevent WMD from entering the United States through
containers.
As part of this layered strategy, CBP's risk-based approach
included two facets, one using shipment information to detect
anomalies that might indicate that a container is a high-risk
container and only then applying the additional scrutiny of
scanning such high-risk containers. This risk-based approach
was an attempt to balance the need to improve security while
also facilitating the free flow of trade.
CBP's strategy also pushed out the borders through various
partnerships. These partnerships were bilateral in the sense
that we work with other countries through CSI. They are
multilateral in the fact that we work through multilateral
organizations such as the World Customs Organization, and there
are also private sector partnerships such as the C-TPAT
program. I think we all recognize that the private sector
actually runs most of the port infrastructure.
And we have reported positively on many of the outcomes of
these partnerships. There is good working relationships in many
of the CSI ports between the U.S. and the host nation. There is
a movement toward, if not the achievement yet, of an
international standardized approach to supply chain security
through the World Customs Organization's SAFE framework. And
finally, there is the industry adoption of improved security
standards.
Now, to make these partnerships work, an important part of
that was the shared resource burden. It was shared in terms of
CSI which was a program where we actually had U.S. staff out at
these locations at these ports, but the host nation supplied
their own equipment, as well as their own staff to help assist
us in targeting and inspecting containers.
The current approach to SFI that CBP has taken, shares some
of the characteristics that I have already talked about. In
terms of risk management, part of the SFI program is the 10
plus 2 secure filing, and this has been developed as part of
the risk-based strategy to plug some of the holes in
information that currently exist in the 24-hour rule.
In terms of partnerships, the 10 plus 2 program has also
been developed in partnership with industry and international
organizations, and similarly the SFI pilot program has been
developed with partnerships in the sense that CBP found
volunteer ports in countries that were willing to participate.
In terms of resources, again there was some sharing of the
resource burden. The U.S. Government supplied the equipment
generally, whether it was DOE or CBP. The U.S. Government
supplied some of our own staff, over there. But those countries
and the port operators, we have to recognize, also supplied a
substantial amount of resources as well.
But the ultimate purpose of the SFI pilot was not to
continue this layered strategy as much as to test the options
of going in a different direction, 100 percent scanning. And
now CBP awkwardly finds itself at a crossroad trying to
maintain its existing risk-based strategy at the same time
Congress is asking it, in some ways, to go in the opposite
direction.
Most of the observers believe that the 100 percent scanning
approach is contrary to risk management in that it applies the
same assumption of risk to all containers before any analysis
is done of risk levels.
In addition, the 100 percent scanning requirement is also
contrary to the partnership approach that has been used so far,
and there have been quite a lot of complaints about this from
our partners, whether they be international organizations,
other countries, or the private sector.
Moreover, unlike some of the resource sharing that has
occurred so far, there seems to be an expectation that foreign
governments and foreign ports will be picking up all or most of
the additional costs associated with this. So not surprisingly,
foreign governments are responding that the flow of trade is
going to be harmed. They are talking about a reciprocal
requirement which would require that the U.S. scan all of its
outbound containers. Most observers within CBP and our own port
operators have raised concerns at least to us in terms of the
difficulties that would be involved in that.
Similarly, some of the officials in either foreign
governments or the private sector question the value of some of
the existing U.S. programs like CSI and C-TPAT. If everything
is going to be scanned, they ask what is the point of the risk-
based system?
Given that the 100 percent requirement is in our view a
marked departure from the existing strategy, we advise to
proceed with caution here. CBP needs to continue thoroughly
evaluating the SFI program, laying out all the potential
challenges and potential ways to overcome those challenges.
And now that the CBP report to Congress is out, we at GAO
will start working with your staff, as well as other
Committees, to review that program in detail and provide
additional information on the way ahead.
Thank you. I would be pleased to answer any questions.
[The prepared statement of Mr. Caldwell follows:]
Prepared Statement of Stephen L. Caldwell, Director, Homeland Security
and Justice Issues, U.S. Government Accountability Office (GAO)
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss challenges to 100 percent
scanning of U.S.-bound cargo containers. More than 700 foreign seaports
ship cargo containers to the United States and over 11 million
oceangoing cargo containers arrived at U.S. seaports last year. The
terrorist attacks of 2001 heightened concerns about the potential
vulnerability of U.S.-bound cargo containers to terrorist exploitation,
and the prevention of such activity became a goal for the Federal
Government.
Within the Department of Homeland Security (DHS), U.S. Customs and
Border Protection (CBP) is responsible for preventing terrorists and
weapons of mass destruction (WMD) from entering the United States,
including the potential WMD threat posed by the movement of oceangoing
cargo containers. As it performs this mission, CBP maintains two
overarching and sometimes conflicting goals--increasing security while
facilitating legitimate trade. To address these goals, CBP has
developed a layered security strategy that includes the Container
Security Initiative (CSI) and the Customs-Trade Partnership Against
Terrorism (C-TPAT). The CSI program, begun in 2002, aims to deter and
detect the smuggling of WMD via cargo containers before they reach U.S.
seaports. At the 58 seaports participating in the CSI program as of
January 2008, foreign governments allow CBP personnel to be stationed
at the seaports and use intelligence and automated risk assessment
information to determine whether U.S.-bound shipments are at risk of
containing WMD or other terrorist contraband--a process referred to as
targeting. CBP personnel can then request that host government customs
officials scan the identified high-risk cargo.\1\ CBP also operates C-
TPAT, a voluntary partnership with the trade community, in which member
companies commit to improving the security of their supply chains and
develop security profiles that outline the companies' security
measures. Because of their cooperation, and after verification by CBP
that such stronger measures are in place, C-TPAT members generally are
subjected to reduced levels of CBP scrutiny of their shipments.
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\1\ Examining cargo containers involves using radiation detection
equipment or nonintrusive imaging equipment, which may include X-ray or
gamma ray technology, or both, to determine if a cargo container poses
a WMD risk.
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To further address container security concerns, Congress passed,
and the President signed, the Security and Accountability for Every
(SAFE) Port Act in October 2006, which includes provisions that
codified CSI and C-TPAT, both of which had been CBP initiatives but not
previously required by law.\2\ In addition, the act calls for the
establishment of a pilot program to test the feasibility of scanning
100 percent of U.S.-bound cargo containers and directs CBP to require
transmission of additional data from importers and cargo carriers for
improved targeting of U.S.-bound cargo containers. CBP is implementing
these requirements as part of its Secure Freight Initiative (SFI)
program. The SAFE Port Act also requires that 100 percent of U.S.-bound
cargo containers be scanned using nonintrusive imaging equipment and
radiation detection equipment at foreign seaports as soon as feasible.
The SFI pilot program tests the feasibility of using this equipment and
implementing 100 percent scanning at seven foreign seaports. In August
2007, the Implementing Recommendations of the 9/11 Commission Act (9/11
Act) was enacted, which revised the SAFE Port Act provision on 100
percent scanning to require implementation by 2012, with possible
exceptions for seaports for which DHS certifies that specified
conditions exist.\3\
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\2\ Pub. L. No. 109-347, 120 Stat. 1884.
\3\ Pub. L. No. 110-53, 1701(a), 121, Stat. 266, 489-90 (amending
6 U.S.C. 982(b)).
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We have issued several reports over the past few years relating to
cargo container security that include challenges that are also
applicable to 100 percent scanning because of the similarities in the
operations of the programs reviewed and their overall purpose to
strengthen cargo security.\4\ This statement discusses these and other
challenges that relate to the continuation of the SFI pilot program and
the longer-term requirement to scan 100 percent of all cargo containers
bound for the United States.
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\4\ See the end of this statement for a list of related GAO
products.
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The information in this testimony is based on GAO reports and
testimonies issued from July 2003 through April 2008 addressing cargo
container security operations and programs, as well as ongoing work
concerning CBP's international efforts for the Senate Committee on
Commerce, Science, and Transportation; the Senate Committee on Homeland
Security and Governmental Affairs and its Permanent Subcommittee on
Investigations; and the House Committee on Energy and Commerce, to be
published later this year. For this ongoing work, we reviewed CBP
documents, such as the report on the SFI program required by the 2006
DHS Appropriations Act.\5\ We also reviewed documentation from the
World Customs Organization (WCO) related to international initiatives
for enhancing supply chain security.\6\ We also analyzed documents from
some of CBP's international partners, which include European Commission
comments on the SFI Pilot Seaport at Southampton, United Kingdom (UK);
a position paper from the Association of German Port Operators; and
reports on 100 percent scanning issued by the World Shipping Council
and the WCO. In addition, we reviewed available documentation, such as
reports and international agreements, related to CBP's work in the
international trade community. We also met in Washington, D.C., with
CBP officials who have program responsibilities for international
affairs and trade, as well as with representatives from the European
Commission, the WCO, and industry representative groups to discuss
multilateral and bilateral efforts to promote security of the supply
chain--the flow of goods from manufacturer to retailer. We also visited
six CSI seaports located overseas to meet with local customs officials,
selecting the locations based on geographic and strategic significance,
container volume to the United States, the dates when the seaports
began conducting CSI operations. Although the perspectives of the
officials we spoke with cannot be generalized across the wider
population of countries that participate in the CSI or C-TPAT programs
or that ship container cargo to the United States, they provided us
with an overall understanding of how CSI operations were conducted, as
well as views on scanning 100 percent of U.S.-bound cargo containers.
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\5\ In addition to this report, the SAFE Port Act also required
that CBP produce a report on lessons learned from the SFI pilot
program; however, this report was not available as of the time we
prepared this statement.
\6\ The WCO is an independent international organization whose
mission is to enhance the efficiency and effectiveness of customs
administrations.
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We conducted our work from May 2006 to June 2008 in accordance with
generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings based on our
audit objectives.
Summary
In our previous and ongoing work on maritime container security
issues, we have identified numerous challenges related to the
continuation of the SFI pilot and the longer-term requirement to scan
100 percent of all cargo containers bound for the United States. These
challenges are in the following nine areas:
Workforce planning: Given the additional scanning equipment
used--as well as the additional cargo containers to be
scanned--the SFI pilot, as well as 100 percent scanning,
program could generate an increased quantity of scan data.
Therefore, CBP could face even greater staffing challenges
because more CBP officers will be required to review and
analyze these data for participating seaports. Furthermore, our
past work on maritime container security found weaknesses in
CBP's workforce planning.
Host nation examination practices: While the SAFE Port and
9/11 Acts require DHS to develop operational and equipment
standards for the scanning systems used for 100 percent
scanning, CBP does not systematically collect information on
the efficacy of host government examination systems.
Measuring performance: While the intention of the SFI pilot
program and 100 percent scanning is to increase security for
the United States, CBP has had ongoing difficulties in defining
performance measures for its maritime container security
programs to indicate whether security is increased.
Resource responsibilities: It is unclear who will pay for
additional resources--including increased staff, equipment, and
infrastructure--and who will be responsible for operating and
maintaining the equipment used for the statutory requirement to
scan 100 percent of U.S.-bound cargo containers at foreign
seaports. Neither the SAFE Port Act nor the 9/11 Act specifies
whether the Federal Government will bear the cost of scanning
100 percent of U.S.-bound cargo containers.
Logistics: Scanning equipment is sometimes placed miles from
where cargo containers are stored, which could add to the time
and cost requirements for scanning these containers, and
transshipment cargo containers--containers moved from one
vessel to another--are only available for scanning for a
comparatively short period of time and may be difficult to
access.
Technology and infrastructure: Issues, such as environmental
conditions that damage equipment and cause delay, limited
bandwidth capacity of local infrastructure, and compatibility
with older equipment have presented difficulties in the SFI
pilot program.
Use and ownership of data: While the SAFE Port Act specifies
that scan data produced in the SFI pilot program should be
available for review by U.S. officials, legal restrictions in
foreign countries may make it difficult to share this
information with CBP. In some cases, transferring such
information to U.S. officials could require new international
agreements.
Consistency with risk management: International partners
state that 100 percent scanning is inconsistent with widely
accepted risk management principles, and some CBP international
partners have stated that the requirement could potentially
reduce the security of the supply chain by diverting scarce
resources away from other essential security measures.
Reciprocity and trade concerns: Foreign governments could
call for reciprocity of 100 percent scanning, requiring the
United States to scan container exports to those countries.
This will be a challenge, as CBP officials have stated that the
agency does not have the resources to scan other countries'
exports leaving the United States. Further, some view this
scanning requirement as a barrier to trade.
Background
CBP Has Developed a Layered Security Strategy to Help Implement Its
Risk
Management Approach
CBP has developed a layered security strategy that provides
multiple opportunities to mitigate threats and allows CBP to focus its
limited resources on cargo containers that are the most likely to pose
a risk to the United States. Risk management is a strategy called for
by Federal law and Presidential directive and is meant to help
policymakers and program officials most effectively mitigate risk while
allocating limited resources under conditions of uncertainty. This
layered security strategy is composed of different but complementary
initiatives and programs, such as CSI and C-TPAT, which build on each
other and work with other Federal security programs, such as the
Department of Energy's (DOE) Megaports Initiative.\7\ This layered
strategy attempts to address cargo container security comprehensively
while ensuring that security attention is directed toward the highest-
risk containers within the supply chain.
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\7\ Begun in 2003, DOE's Megaports Initiative complements CBP's
layered security strategy by providing foreign nations with radiation
detection equipment, such as radiation portal monitors, to scan cargo
containers moving through their seaports. As of February 2008, the
Megaports Initiative was fully operational at 12 foreign seaports and
in various stages of implementation at 17 others.
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The Container Security Initiative
CBP's CSI program aims to identify and examine U.S.-bound cargo
that pose a high risk of concealing WMD or other terrorist contraband
by reviewing advanced cargo information sent by ocean cargo carriers.
As of January 2008, CBP operated CSI in 58 foreign seaports, which, at
the time, accounted for 86 percent of all U.S.-bound cargo containers.
As part of the CSI program, CBP officers, usually stationed at foreign
seaports, seek to identify high-risk U.S.-bound cargo containers by
using information from cargo carriers as well as reviewing data bases
and interacting with host government officials. When requested by CBP,
host government customs officials examine the high-risk container cargo
by scanning it using various types of nonintrusive inspection (NII)
equipment, such as large-scale X-ray machines, or by physically
searching a container's contents before it is sent to the United
States.\8\
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\8\ There are generally two types of CSI cargo container
examinations--scanning with NII equipment and physical searches. To
scan cargo containers, CSI depends on imaging equipment, which may use
X-rays or gamma rays to create images of the container's contents, and
radiation detection equipment. CBP officials, along with host
government officials, may review the information produced with the
scanning equipment to determine the presence of WMD. Depending on the
results of the scans, physical searches may be conducted.
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Customs-Trade Partnership against Terrorism
Initiated in November 2001, the C-TPAT program aims to secure the
flow of goods bound for the United States by developing a voluntary
antiterrorism partnership with stakeholders from the international
trade community.\9\ To join C-TPAT, a company submits a security
profile, which CBP compares to its minimum security requirements for
the company's trade sector. CBP then reviews the company's compliance
with customs laws and regulations and any violation history that might
preclude the approval of benefits--which includes reduced scrutiny or
expedited processing of the company's shipments. CBP data show that
from 2004 through 2006, C-TPAT members were responsible for importing
about 30 percent of U.S.-bound cargo containers, specifically importing
29.5 percent of the 11.7 million oceangoing cargo containers off-loaded
in the United States in the first 9 months of 2007. As of May 2008,
there were over 8,400 C-TPAT members from the import trade community
that had various roles in the supply chain.
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\9\ Stakeholders of the international trade community include
importers; customs brokers; air, sea, and land carriers; and other
logistics service providers, such as freight consolidators.
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The Importance of International Partnerships
To more effectively implement the components of its layered
security strategy, CBP has worked to promote international partnerships
to enhance security so that high-risk cargo can be identified before it
arrives in the United States. For the CSI program, CBP has negotiated
and entered into nonbinding, reciprocal arrangements with foreign
governments, specifying the placement of CBP officials at foreign
seaports and the exchange of information between CBP and foreign
customs administrations. These arrangements allow participating foreign
governments the opportunity to place their customs officials at U.S.
seaports and request inspection of cargo containers departing from the
United States that are bound for their respective countries. CBP also
works with other customs organizations to enhance international supply
chain security. For example, CBP has taken a lead role in working with
foreign customs administrations and the WCO to establish and implement
international risk-based management principles and standards, similar
to those used in the CSI and C-TPAT programs, to improve the ability of
member customs administrations to increase the security of the global
supply chain while facilitating international trade. The member
countries of the WCO, including the United States, adopted such risk-
based principles and standards through the WCO Framework of Standards
to Secure and Facilitate Global Trade (commonly referred to as the SAFE
Framework), in June 2005.
The SAFE Port Act Requires a Pilot Program to Test the Feasibility of
100 Percent Scanning
To improve maritime container security, the SAFE Port Act was
enacted in October 2006 and requires, among other things, that CBP
conduct a pilot program to determine the feasibility of scanning 100
percent of U.S.-bound containers. It also specifies that the pilot
should test integrated scanning systems that combine the use of
radiation portal monitors and NII equipment, building upon CSI and the
Megaports Initiative. To fulfill this and other requirements of the
SAFE Port Act, CBP and DOE jointly announced the formation of SFI in
December 2006. The first phase of SFI is the International Container
Security project--commonly known as the SFI pilot program.\10\ The SFI
pilot program tests the feasibility of 100 percent scanning of U.S.-
bound container cargo at seven overseas seaports and involves the
deployment of advanced cargo scanning equipment and an integrated
examination system. The advanced cargo scanning equipment--NII and
radiation detection equipment--produce data to indicate the presence of
illicit nuclear and radiological material in containers. The integrated
examination system then uses software to make this information
available to CBP for analysis. According to CBP, it will review the
scan data at the foreign seaport or at CBP's National Targeting Center-
Cargo (NTCC) in the United States.\11\ If the scanning equipment
indicates a potential concern, both CSI and host government customs
officials are to simultaneously receive an alert and the specific
container is to be further inspected before it continues on to the
United States.
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\10\ The second phase of SFI is still in development. This phase
involves the advance transmission of cargo information from importers
and cargo carriers.
\11\ According to CBP, the National Targeting Center (NTC) was
established in response to the need for proactive targeting aimed at
preventing acts of terror and to seize, deter, and disrupt terrorists
and implements of terror. NTC originally combined both passenger and
cargo targeting in one facility. It was later divided into NTCC and the
National Targeting Center-Passenger. For purposes of this report, we
use NTCC in our references since its mission is to support CBP cargo-
targeting operations.
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As shown in table 1, under the SFI pilot program, three SFI
seaports are to scan 100 percent of U.S.-bound container cargo that
passes through those seaports, while the other four seaports are to
deploy scanning equipment in a more limited capacity.
----------------------------------------------------------------------------------------------------------------
Table 1.--Information on the Seven Foreign Seaports Participating in the SFI Pilot Program
----------------------------------------------------------------------------------------------------------------
Deployment level Volume of U.S.-
SFI port when pilot Testing date a Operational date b bound containers,
operational Fiscal Year 2006
----------------------------------------------------------------------------------------------------------------
Qasim, Pakistan Full c March 2007 October 12, 2007 2,058
----------------------------------------------------------------------------------------------------------------
Puerto Cortez, Honduras Full c April 2007 October 12, 2007 77,707
----------------------------------------------------------------------------------------------------------------
Southampton, UK Full c August 2007 October 12, 2007 31,780
----------------------------------------------------------------------------------------------------------------
Busan, South Korea Limited d April 2008 To be determined 610,061
(projected)
----------------------------------------------------------------------------------------------------------------
Salalah, Oman Limited d May 2008 To be determined 81,333
(projected)
----------------------------------------------------------------------------------------------------------------
Singapore Limited d June 2008 To be determined 376,846
(projected)
----------------------------------------------------------------------------------------------------------------
Hong Kong Limited d November 2007 January 2008 1,333,812
----------------------------------------------------------------------------------------------------------------
Source: U.S. Customs and Border Protection.
a Testing date is defined as the date when the scanning systems are in place and operational testing begins.
b Operational date is defined as the date when the SFI scanning data are transmitted successfully to the local
central alarm station and to the CBP network in the United States.
c Fully operational seaports are to scan 100 percent of U.S.-bound container cargo under the SFI pilot program.
d Limited operation seaports are to scan less than 100 percent of U.S.-bound container cargo. For these
seaports, CBP plans to conduct SFI operations at a reduced level, typically limited to one terminal in the
port, such as Gamman Terminal in Busan.
As required by the SAFE Port Act, CBP was to issue a report in
April 2008 on the lessons learned from the SFI pilot program and the
need and feasibility of expanding the 100 percent scanning system to
other CSI seaports, among other things.\12\ As we prepared this
statement, CBP had not yet issued this report. Every 6 months after the
issuance of this report, CBP is to report on the status of full-scale
deployment of the integrated scanning systems at foreign seaports to
scan 100 percent of U.S.-bound cargo.
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\12\ 6 U.S.C. 981(d). The DHS Appropriations Act for Fiscal Year
2007, enacted shortly before the SAFE Port Act, also required a pilot
program to test 100 percent scanning at three ports, and established
similar, but not identical, requirements for the program. For example,
the report to Congress on lessons learned is to include a plan and
schedule to expand the scanning system developed under the pilot to
other CSI ports rather than an assessment of the need and feasibility
of such an expansion.
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The SFI Pilot Program and 100 Percent Scanning Face a Number
of Challenges
We identified challenges in nine areas that are related to the
continuation of the SFI pilot program and the longer-term 100 percent
scanning requirement: (1) workforce planning, (2) the lack of
information about host government cargo examination systems, (3)
measuring performance outcomes, (4) undefined resource responsibilities
for the cost and labor for implementation, (5) logistical feasibility
for scanning equipment and processes, (6) technological issues, (7) the
use and ownership of scanning data, (8) a perceived disparity between
100 percent scanning and the risk management approach of CBP's
international partners, and (9) potential requests for reciprocity from
foreign governments.
Workforce Planning Will Be Critical to Success
In our prior work examining the CSI and C-TPAT programs, we
reported that CBP faced challenges identifying an appropriate number of
positions for the programs and finding enough qualified people to fill
these positions.\13\ For example, we reported in 2005 and again in 2008
that CBP's human capital plan did not systematically determine the
optimal number of officers needed at each CSI seaport to carry out
duties that require an overseas presence (such as coordinating with
host government officials or witnessing the examinations they conduct)
as opposed to duties that could be performed remotely in the United
States (such as reviewing data bases).\14\ Determining optimal staffing
levels is particularly important since CBP reports facing ongoing
challenges identifying sufficient numbers of qualified employees to
staff the program. For example, CBP officials reported that 9 qualified
applicants applied for 40 permanent positions at CSI seaports. We also
reported that according to CBP officials, to fill open CSI positions,
officers have in some cases been deployed who have not received all
required training. We recommended in April 2005 that CBP revise the CSI
staffing model to consider: (1) what functions need to be performed at
CSI seaports and what can be performed in the United States, (2) the
optimum levels of staff needed at CSI seaports to maximize the benefits
of targeting and inspection activities in conjunction with host nation
customs officials, and (3) the cost of locating targeters overseas at
CSI seaports instead of in the United States.\15\ CBP agreed with our
recommendation on CSI's staffing model and said that modifications to
the model would allow program objectives to be achieved in a more cost-
effective manner. CBP said that it would evaluate the minimum level of
staff needed at CSI seaports to maintain ongoing dialogue with host
nation officials, as well as assess the staffing levels needed
domestically to support CSI activities. However, as of January 2008,
CBP's human capital plan did not systematically make these
determinations.
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\13\ For our prior recommendations and observations on C-TPAT's
workforce challenges, see GAO, Container Security: Expansion of Key
Customs Programs Will Require Greater Attention to Critical Success
Factors, GAO 03 770 (Washington, D.C.: July 25, 2003). Also, see GAO,
Cargo Security: Partnership Program Grants Importers Reduced Scrutiny
with Limited Assurance of Improved Security, GAO-05-404 (Washington,
D.C.: Mar. 11, 2005).
\14\ GAO, Container Security: A Flexible Staffing Model and Minimum
Equipment Requirements Would Improve Overseas Targeting and Inspection
Efforts, GAO 05 557 (Washington, D.C.: Apr. 26, 2005) and GAO, Supply
Chain Security: Examinations of High-Risk Cargo at Foreign Seaports
Have Increased, but Improved Data Collection and Performance Measures
Are Needed, GAO 08 187 (Washington, D.C.: Jan. 25, 2008).
\15\ GAO-05-557.
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The ability of the SFI pilot program--and by extension the 100
percent scanning requirement of the SAFE Port and 9/11 Acts--to operate
effectively and enhance maritime container security depends, in part,
on the success of CBP's ability to manage and deploy staff in a way
that ensures that critical security functions are performed. Under the
CSI program, CBP operated and conducted cargo container scanning at 58
foreign seaports as of January 2008; however, given that additional
scanning equipment will be used in the SFI pilot program, and
fulfilling the 100 percent scanning requirement will naturally increase
the number of containers to be scanned at the more than 700 seaports
that ship cargo to the United States, the SFI pilot program and 100
percent scanning requirement will generate an increased quantity of
scan data. According to European customs officials, for there to be
value added in these additional scans, the scan data must be reviewed.
Therefore, in implementing the 100 percent scanning requirement, CBP
will face staffing challenges because more CBP officers will be
required to review and analyze these data for participating seaports.
CBP Generally Lacks Key Information on Host Government Examination
Systems Because of Sovereignty Constraints
As we reported in January 2008, CBP does not systematically collect
information on CSI host governments' examination equipment or
processes.\16\ We noted that CBP must respect the sovereignty of
countries participating in CSI and, therefore, cannot require that a
country use specific scanning equipment or follow a set of prescribed
examination practices. Thus, while CBP has set minimum technical
criteria to evaluate the quality and performance of equipment being
considered for use at domestic seaports, it has no comparable standards
for scanning equipment used at foreign seaports. In addition, CBP
officials stated that there are no plans to evaluate examination
equipment at foreign seaports against the domestic criteria. CBP
officials added, however, that the capabilities of scanning equipment
are only one element for determining the effectiveness of examinations
that take place at CSI seaports. It is better, in their view, to make
assessments of the processes, personnel, and equipment that
collectively constitute the host governments' entire examination
systems. However, in January 2008, we reported that CBP does not gather
this type of information and recommended that CBP, in collaboration
with host government officials, improve the information gathered at
each CSI port by: (1) establishing general guidelines and technical
criteria regarding the minimal capability and operating procedures for
an examination system that can provide a basis for determining the
reliability of examinations and related CSI activities; (2)
systematically collecting data for that purpose; and (3) analyzing the
data against the guidelines and technical criteria to determine what,
if any, mitigating actions or incentives CBP should take to help ensure
the desired level of security. CBP partially concurred with this
recommendation in terms of improving the information gathered about
host governments' examination systems. In particular, CBP agreed on the
importance of an accepted examination process and noted that it
continues to improve the information it gathers. CBP did not indicate
that it would systematically pursue information on these host
government examination systems. It did state that it was working
through the WCO to address uniform technical standards for equipment.
We reported that while CBP engaged with international trade groups to
develop supply chain security requirements, these requirements do not
specify particular equipment capabilities or examination practices.
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\16\ GAO-08-187.
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Both the SAFE Port and 9/11 Acts require DHS to develop technical
and operational standards for scanning systems; therefore, the
challenges that CSI has faced in obtaining information about host
governments' examination systems are relevant to the SFI pilot program
and the 100 percent scanning requirement.\17\ However, as noted earlier
in this statement, the United States cannot compel foreign governments
to use specific equipment for the SFI pilot program or the 100 percent
scanning requirement, thus challenging CBP's ability to set and enforce
standards. In addition, because CBP does not systematically collect
information on the efficacy of host governments' examinations systems,
it lacks reasonable assurance that these examinations could reliably
detect and identify WMD unless it implements our January 2008
recommendation to determine actions to take to ensure the desired level
of security. This is particularly important since currently, under CSI,
most high-risk cargo containers examined at international seaports are
not re-examined upon arrival at domestic seaports.
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\17\ The SAFE Port Act directs DHS to: (1) establish technical
criteria and standard operating procedures for the use of NII equipment
at CSI seaports and (2) require CSI seaports to operate the equipment
in accordance with the criteria and operating procedures established by
DHS. The act states that the technical criteria and operating
procedures should not be designed to conflict with the sovereignty of
host countries, but it did not address host government s' sovereignty
related to requirements for CSI seaports to operate the equipment in
accordance with the criteria and procedures. The 9/11 Act directs DHS
to establish technological and operational standards for systems to
conduct 100 percent scanning of containers and to ensure that this and
other actions taken to implement 100 percent scanning are consistent
with the United States' international obligations.
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Measuring Performance, Particularly Outcomes, Will Be Difficult
In our reviews of the CSI and C-TPAT programs, we identified
challenges with CBP's ability to measure program performance because
of, among other things, the difficulty in determining whether these
programs were achieving their desired result of increasing security for
the United States.\18\ In the past, we and the Office of Management and
Budget (OMB) have acknowledged the difficulty in developing outcome-
based performance measures for programs that aim to deter or prevent
specific behaviors.\19\ In the case of C-TPAT, we noted in our March
2005 \20\ and April 2008 reports that CBP had not developed a
comprehensive set of performance measures and indicators for the
programs, such as outcome-based measures, to monitor the status of
program goals. A senior CBP official stated that developing these
measures for C-TPAT, as well as other CBP programs, has been difficult
because CBP lacks the data necessary to determine whether a program has
prevented or deterred terrorist activity. We recommended that CBP
complete the development of performance measures, to include outcome-
based measures and performance targets, to track the program's status
in meeting its strategic goals. CBP agreed with our recommendation on
developing performance measures, and had developed initial measures
relating to membership, inspection percentages, and validation
effectiveness. However, as we reported in April 2008, CBP had yet to
develop measures that assess C-TPAT's progress toward achieving its
strategic goal to ensure that its members improve the security of their
supply chains pursuant to C-TPAT security criteria.
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\18\ For more information on the difficulty that CSI has had in
developing outcome-based performance measures and in measuring the
deterrence effect of the program, see GAO-08-187.
\19\ According to OMB, outcome measures describe the intended
result of carrying out a program or activity. For example, for a
tornado warning system, a measure of outcome could be the number of
lives saved and amount of property damage averted.
\20\ GAO-05-404 and GAO, Supply Chain Security: U.S. Customs and
Border Protection Has Enhanced Its Partnership with Import Trade
Sectors, but Challenges Remain in Verifying Security Practices, GAO-08-
240 (Washington, D.C.: Apr. 25, 2008).
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Given that, as with CSI and C-TPAT, the purpose of the SFI pilot
program and the 100 percent scanning provision is to increase security
for the United States, the same challenges related to defining and
measuring performance could also apply to the SFI pilot program and the
100 percent scanning provision. Without outcome-based performance
measures, it will be difficult for CBP and DHS managers and Congress to
effectively provide program oversight and determine whether 100 percent
scanning achieves the desired result--namely increased security for the
United States.
Resource Responsibilities for Implementing 100 Percent Scanning Have
Not Been
Determined
While CBP and DOE have purchased security equipment for foreign
seaports participating in the SFI pilot program, it is unclear who will
pay for additional resources--including increased staff, equipment, and
infrastructure--and who will be responsible for operating and
maintaining the equipment used for the statutory requirement to scan
100 percent of U.S.-bound cargo containers at foreign seaports.
According to CBP, the average cost of initiating operations at CSI
seaports was about $395,000 in 2004 and $227,000 in 2005.\21\ By
comparison, CBP reported that it and DOE have spent approximately $60
million, collectively, to implement 100 percent scanning at the three
foreign seaports fully participating in the SFI pilot program.\22\ The
SAFE Port and 9/11 Acts did not require nor prohibit the Federal
Government from bearing the cost of scanning 100 percent of U.S.-bound
cargo containers.\23\ According to customs officials in the U.K. who
participated in the SFI pilot program at the Port of Southampton,
resource issues will inhibit their ability to implement permanently the
100 percent scanning requirement. For example, these customs officials
commented that to accommodate the SFI pilot program at the Port of
Southampton, existing customs staff had to be reallocated from other
functions. The U.K. customs officials further stated that this
reallocation was feasible for the 6-month pilot program, but it would
not be feasible on a permanent basis. Similarly, a customs official
from another country with whom we met told us that while his country
does not scan 100 percent of exports, its customs service has increased
its focus on examining more exported container cargo, and this shift
has led to a 50 percent increase in personnel.
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\21\ CBP had used the average cost per CSI port to achieve
operational status as a performance measure. However, agency officials
told us that they stopped using the measure in 2006 because at that
point, the majority of CSI seaports had already become operational and
because there were too many variables beyond CBP's control in the
calculation.
\22\ Under the SFI pilot program, three seaports will scan 100
percent of U.S.-bound container cargo while the remaining four will
scan less than 100 percent of U.S.-bound container cargo. CBP will
conduct a reduced level of SFI operations at these four seaports,
typically limited to one terminal in the port, such as Gamman Terminal
in Busan or the Brani Terminal in Singapore.
\23\ However, the Congressional Budget Office assumed in its
analysis of estimates for implementing this requirement that the cost
of acquiring, installing, and maintaining systems necessary to comply
with the 100 percent scanning requirement would be borne by foreign
seaports so that they could maintain trade with the United States.
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European government officials expressed concerns regarding the cost
of equipment to meet the 100 percent scanning requirement, as well as
the cost of additional personnel necessary to operate the new scanning
equipment, view and transmit the images to the United States, and
resolve false alarms. Though CBP and DOE have provided the bulk of
equipment and other infrastructure necessary to implement the SFI pilot
program, they have also benefited from host nation officials and port
operators willing to provide, to varying degrees, the resources
associated with additional staffing, alarm response protocols,
construction, and other infrastructure upgrades. However, according to
CBP, there is no assurance that this kind of mutual support is either
sustainable in the long term or exists in all countries or at all
seaports that export goods to the United States.
Logistical Feasibility Could Vary by Seaport
Logistical issues, such as crowded terminal facilities and the
variety of transportation modes at terminals, could present challenges
to the SFI pilot program and implementation of 100 percent scanning.
Seaports may lack the space necessary to install additional scanning
equipment needed to comply with the 100 percent scanning requirement.
For example, we observed that scanning equipment at some seaports is
located several miles away from where cargo containers are stored,
which could add to the time and cost requirements for scanning these
containers. Similarly, while some seaports have natural bottlenecks
that allow for container scanning equipment to be placed such that all
outgoing containers would have to pass through the equipment, not all
seaports are so configured, and the potential exists for containers to
be shipped to the United States without being scanned. Another
potential logistical vulnerability is related to the transportation
modes by which cargo containers arrive and pass through seaports. For
example, cargo containers that arrive at a seaport by truck or rail are
generally easier to isolate, whereas transshipment cargo containers--
those moved from one vessel to another--are only available for scanning
for a comparatively short time and may be more difficult to access.\24\
For example, U.K. customs officials stated that it was not possible to
route transshipment containers that arrived by sea through the SFI
equipment. As a consequence, according to CBP officials, the scanning
of transshipment containers has not begun at the Port of Southampton.
CBP and European customs officials evaluating the SFI pilot program
stated that while the pilot has been comparatively successful at
relatively lower-volume seaports, such as Southampton, implementing 100
percent scanning would be significantly more challenging at seaports
with a higher volume of cargo container traffic or greater percentages
of transshipment cargo containers.
---------------------------------------------------------------------------
\24\ Similarly, it may be difficult to scan cargo containers that
remain on board a vessel as it passes through a foreign seaport.
---------------------------------------------------------------------------
Technology and Compatibility Issues Could Present Challenges
The SFI pilot program currently faces technology challenges, such
as mechanical breakdowns of scanning equipment because of environmental
factors, inadequate infrastructure for the transmission of electronic
information, and difficulties in integrating different generations of
scanning equipment. Environmental conditions at some sites can
compromise the effectiveness of radiation detection equipment used in
the SFI pilot program. For example, two of the three seaports fully
participating in the SFI pilot program experienced weather-related
mechanical breakdowns of scanning equipment. Specifically, at the Port
of Southampton, a piece of radiation scanning equipment failed because
of rainy conditions and had to be replaced, resulting in 2 weeks of
diminished scanning capabilities. Additionally, Port Qasim in Pakistan
has experienced difficulties with scanning equipment because of the
extreme heat. Because of the range of climates at the more than 700
other international seaports that ship cargo to the United States,
these types of technological challenges could be experienced elsewhere.
The limited infrastructure at some foreign seaports poses a
challenge to the installation and operation of radiation detection
equipment, as well as to the electronic transmission of scan data to
CBP officers in the United States. Many seaports are located in remote
areas that often do not have access to reliable supplies of electricity
or infrastructure needed to operate radiation portal monitors and
associated communication systems. For example, at Port Salalah in Oman,
a key challenge has been the cost of data transmission, because of low
bandwidth communications infrastructure, to send data to the CBP
officers who review the scans. Prior to SFI, the CSI office in Port
Salalah already used transmission technology that cost annually about
10 times that of other SFI seaports. To participate in SFI, CBP
originally planned to procure additional technology costing
approximately $1.5 million each year to transmit the SFI data from Port
Salalah. However, CBP was able to devise a lower-cost option that
involved sharing communications infrastructure with existing CSI
operations at the port because U.S.-bound container volume is
relatively low in Oman. While CBP reported that this solution could
keep data transmission costs down at other low-volume seaports, it is
unclear whether this could be accomplished at higher-volume seaports.
In addition to compatibility with existing infrastructure, SFI seaports
have experienced compatibility issues with equipment from different
generations. According to CBP, there are various manufacturers of
equipment used at CSI seaports, and although the integration of
equipment and technology at SFI pilot program seaports has generally
been successful, it has not been without challenges. For example, at
Port Salalah integration of a large number of new pieces of equipment
by new vendors caused operational delays.
Use and Ownership of Data Have Not Been Determined
The legislation that mandated the SFI pilot program and 100 percent
scanning does not specify who will have the authority or responsibility
to collect, maintain, disseminate, view, or analyze scan data collected
on cargo containers bound for the United States. While the SAFE Port
Act specifies that SFI pilot program scan data should be available for
review by U.S. Government officials, neither it nor the 9/11 Act
establishes who is to be responsible for managing the data collected at
foreign seaports. Other unresolved questions include ownership of data,
how proprietary information is to be treated, and how privacy concerns
are to be addressed. For example, officials from U.K. Customs stated
that U.K. privacy legislation barred sharing information on cargo
containers with CBP unless a specific risk was associated with the
containers. To comply with U.K. laws, while still allowing CBP to
obtain scan data on container cargo, U.K. Customs and CBP negotiated
working practices to allow CBP to use its own handheld radiation
scanning devices to determine whether cargo containers emitted
radiation, but this was only for purposes of the SFI pilot program.
According to the European Commission, for 100 percent scanning to go
forward, the transfer of sensitive information would have to take place
systematically, which would only be possible if a new international
agreement between the United States and the European Union (EU) was
enacted. In the absence of agreements with the host governments at the
more than 700 seaports that ship cargo to the United States, access to
data on the results of container scans could be difficult to ensure.
CBP International Partners Have Stated That 100 Percent Scanning Is
Inconsistent with Widely Accepted Risk Management Practices
Some of CBP's international partners, including foreign customs
services, port operators, trade groups, and international
organizations, have stated that the 100 percent scanning requirement is
inconsistent with widely accepted risk management principles, and some
governments have expressed to DHS and Congress that 100 percent
scanning is not consistent with these principles as contained in the
SAFE Framework.\25\ Similarly, some European customs officials have
told us that the 100 percent scanning requirement is in contrast to the
risk-based strategy behind CSI and C-TPAT, and the WCO has stated that
implementation of 100 percent scanning would be ``tantamount to
abandonment of risk management.'' In addition, some of CBP's
international partners have stated that the requirement could
potentially reduce security. For example, the European Commission noted
that there has been no demonstration that 100 percent scanning is a
better means for enhancing security than current risk-based methods.
Further, CBP officials have told us that the 100 percent scanning
requirement may be a disincentive for foreign countries or companies to
adopt risk-based security initiatives, such as CSI, C-TPAT, or the SAFE
Framework. Similarly, in April 2008, the Association of German Seaport
Operators released a position paper that stated that implementing the
100 percent scanning requirement would undermine mutual, already
achieved security successes and hinder maritime security by depriving
resources from areas that present a more significant threat and warrant
closer scrutiny.
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\25\ Currently, the CSI program employs a risk management approach
to identify cargo containers at high risk of containing WMD for
scanning with nonintrusive imaging equipment and possible physical
inspection before being placed on vessels bound for the United States.
In contrast, the 100 percent scanning approach subjects to all U.S.-
bound cargo containers to scanning with nonintrusive imaging equipment
regardless of risk.
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100 Percent Scanning Could Lead to Calls for Reciprocity and Be Viewed
as a
Barrier to Trade
Implementation of the 100 percent scanning requirement could result
in calls for reciprocity of scanning activities from foreign officials
and be viewed as a barrier to trade. European customs officials, as
well as officials from the WCO, have objected to the unilateral nature
of the 100 percent scanning requirement, noting that this requirement
contrasts with prior multilateral efforts CBP has implemented.
Similarly, the Association of German Port Operators published a
position paper stating that the legislative requirement inherently
ignores the international character of global maritime trade and is a
classic example of an issue that should have been discussed with and
passed by the legislative body of an international organization, such
as the WCO. In its report on the SFI pilot program, the European
Commission expressed concern that it would be difficult for EU customs
administrations to implement a measure designed to protect the United
States that would divert resources away from strengthening EU security.
Customs officials from Europe, as well as members of the World Shipping
Council and the Federation of European Private Port Operators,
indicated that should implementation of the 100 percent scanning
requirement be pursued, foreign governments could establish similar
requirements for the United States, forcing U.S. export cargo
containers to undergo scanning before being loaded at U.S. seaports.
According to CBP officials, the SFI pilot program, as an extension of
CSI, allows foreign officials to ask the United States to reciprocate
and scan 100 percent of cargo containers bound for their respective
countries. CBP officials told us that CBP does not have the personnel,
equipment, or space to scan 100 percent of cargo containers being
exported to other countries, should it be requested to do so.
In addition to the issue of reciprocity, European and Asian
government officials, as well as officials from the WCO, have stated
that 100 percent scanning could constitute a barrier to trade. For
example, the Association of German Seaport Operators stated that the
100 percent mandate would amount to an unfair nontariff trade barrier
between the United States and foreign seaports. Similarly, senior
officials from the European Commission expressed concern that a 100
percent scanning requirement placed on foreign seaports could disrupt
the international trading system.\26\ Further, the WCO passed a
unanimous resolution in December 2007, expressing concern that
implementation of 100 percent scanning would be detrimental to world
trade and could result in unreasonable delays, port congestion, and
international trading difficulties.\27\
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\26\ The European Commission is the EU's policy-making and
executive engine. The commission is composed of 27 commissioners, one
from each member state. Among its many powers, the commission proposes
legislation for approval by the EU Council and European Parliament in
matters relating to economic integration, ensures that EU laws are
applied and upheld throughout the EU, implements the budget, and
represents the European community in international trade negotiations.
\27\ The United States abstained from the vote.
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Mr. Chairman and Members of the Subcommittee, this concludes my
prepared statement. We look forward to working with CBP and the
Congress to track progress of the SFI pilot and to identify the way
forward for supply chain security. I would be happy to respond to any
questions you may have.
Related GAO Products
Supply Chain Security: U.S. Customs and Border Protection Has
Enhanced Its Partnership with Import Trade Sectors, but Challenges
Remain in Verifying Security Practices. GAO-08-240. Washington, D.C.:
April 25, 2008.
Supply Chain Security: Examinations of High-Risk Cargo at Foreign
Seaports Have Increased, but Improved Data Collection and Performance
Measures Are Needed. GAO-08-187. Washington, D.C.: January 25, 2008.
Maritime Security: The SAFE Port Act: Status and Implementation One
Year Later. GAO-08-126T. Washington, D.C.: October 30, 2007.
Maritime Security: One Year Later: A Progress Report on the SAFE
Port Act. GAO-08-171T. Washington, D.C.: October 16, 2007.
Maritime Security: The SAFE Port Act and Efforts to Secure Our
Nation's Seaports. GAO-08-86T. Washington, D.C.: October 4, 2007.
Combating Nuclear Smuggling: Additional Actions Needed to Ensure
Adequate Testing of Next Generation Radiation Detection Equipment. GAO-
07-1247T. Washington, D.C.: September 18, 2007.
Maritime Security: Observations on Selected Aspects of the SAFE
Port Act. GAO-07-754T. Washington, D.C.: April 26, 2007.
Customs Revenue: Customs and Border Protection Needs to Improve
Workforce Planning and Accountability. GAO-07-529. Washington, D.C.:
April 12, 2007.
Cargo Container Inspections: Preliminary Observations on the Status
of Efforts to Improve the Automated Targeting System. GAO-06-591T.
Washington, D.C.: March 30, 2006.
Combating Nuclear Smuggling: Efforts to Deploy Radiation Detection
Equipment in the United States and in Other Countries. GAO-05-840T.
Washington, D.C.: June 21, 2005.
Homeland Security: Key Cargo Security Programs Can Be Improved.
GAO-05-466T. Washington, D.C.: May 26, 2005.
Maritime Security: Enhancements Made, but Implementation and
Sustainability Remain Key Challenges. GAO-05-448T. Washington, D.C.:
May 17, 2005.
Container Security: A Flexible Staffing Model and Minimum Equipment
Requirements Would Improve Overseas Targeting and Inspection Efforts.
GAO-05-557. Washington, D.C.: April 26, 2005.
Preventing Nuclear Smuggling: DOE Has Made Limited Progress in
Installing Radiation Detection Equipment at Highest Priority Foreign
Seaports. GAO-05-375. Washington, D.C.: March 31, 2005.
Cargo Security: Partnership Program Grants Importers Reduced
Scrutiny with Limited Assurance of Improved Security. GAO-05-404.
Washington, D.C.: March 11, 2005.
Homeland Security: Process for Reporting Lessons Learned from
Seaport Exercises Needs Further Attention. GAO-05-170. Washington,
D.C.: January 14, 2005.
Port Security: Better Planning Needed to Develop and Operate
Maritime Worker Identification Card Program. GAO-05-106. Washington,
D.C.: December 10, 2004.
Maritime Security: Substantial Work Remains to Translate New
Planning Requirements into Effective Port Security. GAO-04-838.
Washington, D.C.: June 30, 2004.
Homeland Security: Summary of Challenges Faced in Targeting
Oceangoing Cargo Containers for Inspection. GAO-04-557T. Washington,
D.C.: March 31, 2004.
Container Security: Expansion of Key Customs Programs Will Require
Greater Attention to Critical Success Factors. GAO-03-770. Washington,
D.C.: July 25, 2003.
Senator Lautenberg. Thank you very much.
I would like a definition, Mr. Caldwell. How would you
describe a layered approach to things? Is it basically modular?
Mr. Caldwell. Well, the layered approach is several
different programs trying to get at different parts of vectors
that terrorists may use to get a weapon of mass destruction or
other kind of contraband into this country. Part of that layer
is Megaports that the Department of Energy operates to look for
containers that would contain radioactive WMD. CBP's layers
include, first, advance information to try to get information
which could reveal potential----
Senator Lautenberg. But tell me, does that not really
describe the whole picture? I think when we modify the design
of the program with a layered approach--I do not think that is
any different than the approach to get to the end of the game,
regardless of route. I mean, you have to do these things. What
concerns me is that layered comes in there as an opportunity,
Mr. Ahern, for the inability to meet a target that we have for
the 100 percent scanning. So we use different words to describe
it. ``Layered'' is one of them.
And I talked to several of the staff as well.
I mean, to me it is which of the routes is most important.
Well, you have to consider that totally when you are looking
for the security that we would like to see.
Mr. Ahern, the Congress last year passed a law requiring
all shipping containers coming into our ports to be scanned for
nuclear weapons and radiation before they reach our shores.
Now, according to the testimony this morning, the July 2012
deadline will not be met. What will you say is a reasonable
expectation now to have a 100 percent scanning system in place
for all maritime cargo coming into the United States?
Mr. Ahern. Well, as stated, the 2012 deadline that was
actually expressed in the 9/11 Act had six caveats where there
could be extensions if certain conditions were not met. Those
are very specific in the law: making sure there was sufficient
equipment available for purchase and installation; sufficient
low false alarm rates; the capability to physically deploy the
logistical challenges, some of which I described in some
minimal detail, which is much more described in the report,
some of the physical lay-down challenges we have seen in two
very small ports that we have tested it in; the integration
with the existing systems. I mean, Mr. Huizenga spoke about the
fact that integrating the systems. Yes, there is a
complementary package of technology that is out there, but one
of the other conditions is about the software anomaly
recognition system.
Senator Lautenberg. Yes. Listen, we have got lots of
brilliant people who are helping to devise the program into
place. Why are all of these things anomalous? To me it seems
that is part of what you do in order to make an estimate.
Otherwise, it is kind of hip shooting and picking out a date.
From day one almost, it says that we are never going to meet
this date.
Mr. Ahern. Let me try to simplify it as best I can. The
anomaly recognition, to be able to look at each one of the X-
rays that comes through the gates for the containers--if we
were to apply that against a universal 11.5 million containers,
continuing to grow each year by 10 to 12 percent, it is not a
matter of just running the containers through the X-ray
systems. At this point in time, someone--that means a human, a
trained officer, we believe a Government officer--needs to be
able to go ahead and look and review those images. That takes--
--
Senator Lautenberg. You mean that was not thought of?
Mr. Ahern. No. That has absolutely been thought of. We have
made this very clear for a number of years----
Senator Lautenberg. So why do we not get past the problems
that exist and answer the question, well, why in the planning
were these things not reviewed? Why were these situations not
expected? If it was a NASA flight, it would be terrible if the
planning had been this far off the mark.
Mr. Ahern. Well, very respectfully, sir, there is
conflicting direction from the Congress. The SAFE Port Act
actually was going to give us the opportunity to go ahead and
provide the opportunity to study through piloting three
locations, which we are underway, in the process of doing,
which is the report that was just submitted late.
The 9/11 Act that came along later then just trumped that
legislation and basically called for 100 percent scanning of
all containers coming into the United States. So there was not
the opportunity to continue to work through the pilot in an
appropriate fashion to discover all the concerns that are out
there with the development and maturity of technology, the
integrating of the images, the software anomaly recognition
capabilities, the challenges to sovereignty that we have out
there as well, and also deal with some of the diplomatic
challenges.
One of the things I would like to present to you--and I
would really offer it into the record for your consideration
for the full committee here--is that we have had 27 countries
that have written to us and expressed their concerns. We have
had nine international trade associations and two international
associations.
[The information referred to follows:]
List of Countries and Trade Organizations Expressing Concerns
on 100 Percent Scanning
Provided by U.S. Customs and Border Protection
Countries:
Australia
Belgium
Bulgaria
Cameroon
Canada
China
Finland
Germany
Honduras
Hong Kong
Indonesia
Italy
Japan
Latvia
Mauritania
Netherlands
New Zealand
Oman
Philippines
Poland
Port-au-Prince
Singapore
South Korea
Taiwan
Thailand
Ukraine
United Kingdom
International Organizations:
European Union
World Customs Organization
Industry Organizations:
American Association of Exporters and Importers
Business Alliance for Customs Modernization
Joint Industry Group
National Industrial Transportation League
National Customs Brokers & Forwarders Association of America
Retail Industry Leaders Association
U.S. Chamber of Commerce
WCO Private Sector Consultative Group
World Shipping Council
There was also a study that was just recently released this
week that I would also provide for the record* to
make sure that has an opportunity to be reviewed as well
talking about the economic impact that this would have to the
global supply chain as well. I think these are important things
that we would have had the opportunity to continue to learn had
we followed the track of the SAFE Port Act.
---------------------------------------------------------------------------
\*\ This study, Global Logistic Chain Security--Economic Impacts of
the U.S. 100% Container Scanner Law is maintained in Committee files.
---------------------------------------------------------------------------
Senator Lautenberg. There were opportunities for testimony
to be given, and I listened with respect. But I will tell you
that if this was a brain operation and the doctor said, well, I
did not know that I had to have a particular type of tool, I
did not know that we used a particular type of anesthesia,
fundamental to planning.
I had the opportunity run a pretty big corporation before I
came here, and we made mistakes. But what happened is we
learned that you cannot enter these things, offer a deadline
based on the conditions you are describing now. It is
absolutely impossible.
When will we have 100 percent scanning?
Mr. Ahern. Well, I would submit to you that is not a wise
investment for the taxpayers' dollars. I do not believe 100
percent scanning would equal 100 percent security. I think when
you actually take a look at the risk to the global supply
chain, the risk for security concerns is relatively low based
on intelligence assessments. Given the fact that 90 percent of
the global economy moves through the maritime environment, the
consequences are high. But I would submit that we have very
productive layered defenses in place through the advance
information that we are doing a better job of----
Senator Lautenberg. Well, OK. We are looking here at a
commitment that was made, a very important commitment. We knew
that we had to do studies along the way. We knew we had to do
tests along the way. It has been 7 years since 9/11. The 9/11
Commission found that the greatest failure in their review was
one of imagination.
And when I hear your response to picking a date that has
some degree of reliability without a broad explanation of why
it cannot be done--can you offer a date with any sense of
satisfaction it will be met?
Mr. Ahern. Not with the current technology, not with the
economics involved with this, not with the fact that----
Senator Lautenberg. OK. What you are saying realistically
is that they are going to continue to have to take these risks.
There is no other way to assure ourselves that these materials
are not included in a container. So you are telling the world
here that we cannot do that. This country is not capable of it.
Mr. Ahern. What I am suggesting is that the layered defense
approach, beginning with advance information, running it
through an automated targeting system, interfacing with
intelligence, having the ability to have our Customs-Trade
Partnership Against Terrorism be able to do supply chain
verification at the point of stuffing, having over 200 officers
identified and assigned at the top locations, 58 locations----
Senator Lautenberg. I hear you, Mr. Ahern. And I thank you.
I think what you are doing is presenting questions now that
should have been in the origination of a date and a program.
Mr. Ahern. Well, very respectfully, I would ask that the
record be reviewed since the beginning of this process. We have
talked about some of the challenges with 100 percent scanning
before the law was passed last year.
We thought the SAFE Port Act was a very thoughtful approach
and a way to go forward with dealing in a pilot location so
that we could learn all the different challenges that are out
there.
Senator Lautenberg. When does it get done?
I am going to go on to Mr. Caldwell. Four of the world's
largest marine terminal operators have indicated on their own
that they are going to begin to scan all cargo through their
facilities. They are waiting for the administration to set
performance standards for the scanning equipment as Congress
required in the 2006 SAFE Port Act. When will these technology
performance standards be put in place?
Mr. Caldwell. Sir, I do not know when those standards will
be in place. It is very important to have those standards, and
it is important that they be developed through a standard-
setting organization such as ISO. Once you actually have those
standards, whether it is for NII equipment or RPM equipment,
only then can you really independently assess and compare
equipment. Then you can compare equipment in another port
versus our port? Then you can determine if its capability is
less than ours, or if it meets a minimum standard?
I am not sure how the Government or CBP gets that process
started within ISO. There is an ISO standard which some port
terminal operators have used to certify the general security
management in their ports. But there still is not a standard
for the actual equipment performance.
Senator Lautenberg. So with these terminal operators on
their own--what is their target? Does each one make the
assessment that they are going to meet the qualities we want in
our protection? Or do we keep on waiting for a performance
standard that is universal that everyone has to meet?
Mr. Caldwell. I think these are competitive decisions by
these terminal operators. Maybe they see the writing on the
wall. They are pushing toward 100 percent scanning, which
clearly is in U.S. law at this point, and it would certainly
give them a competitive edge if they are able to set up such a
system. I do not think any of these terminal operators are
claiming they can do this for transshipped items.
Obviously, this equipment is out there. It is being used--
advancing the state-of-the-art and hopefully increasing those
performance capabilities.
But again, I do not know if there is an active process at
ISO to actually set such performance standards.
Senator Lautenberg. Mr. Huizenga, do you want to make a
comment?
Mr. Huizenga. Yes. If you do not mind, Mr. Chairman, I will
try to address your concern.
We have been working pretty closely with the industry
representatives for some time now. Although we could formalize
this--and I think it is useful and we are in the process of
doing so, industry representatives are familiar with--the
targets that we are trying to hit. The information is out there
and we will work with Mr. Ahern's people and the DNDO people at
the Department of Homeland Security to formalize this process.
But the more important point is that the technology
actually does not exist, despite our best efforts right now. If
you want to try to capture an X-ray image or a radiation scan
for a transshipped container that comes into Singapore and gets
off one ship, gets put on the dock for a very short period of
time and then put on another one, there is no space in the
terminal to put the equipment. So if you had to take that
container and drive it off the port and back through the entry
and exit gate, where it is easy to capture the containers, it
would completely disrupt the operations of the port. Despite
our best efforts, there are some things that cannot be done and
keep the port operating.
Senator Lautenberg. But even if the manifest or bill of
lading would have been established for each container and some
certification that this container is filled with safe cargo,
now if the transfer is made without breaking the seal--and I am
not intimately familiar with this--does that not take care of
it?
Mr. Huizenga. It is a simple logistics issue really. The
container comes into the port and gets taken off the ship and
put down on the dock, and then put on another ship, and it
really does not go through a convenient choke point where it
can be driven through a scanning device. Now, we are looking
for ways to overcome this, but right now we do not have a
technology that can solve the problem.
Senator Lautenberg. But it would have been driven through a
device, to use your expression, before it left the port of
embarkation.
Mr. Huizenga. It was through a feeder port, perhaps. But
that port might not necessarily have been shipping anything
directly to the United States. It just adds another layer of
complexity to the number of ports you need to try to work at.
Senator Lautenberg. Mr. Ahern, any idea what the cost might
be to the country to install the necessary equipment to be able
to allow our Government to receive the scanning data we need
for shipments from overseas?
Mr. Ahern. If we were to look at it globally for 100
percent application, we have over 700 ports around the world
that ship to the United States. Obviously, those are pretty
large and go down to very, very small feeder ports. We have not
actually done a footprint of each one of those 700 ports for
the number of terminals and the number of gates that would
actually be in each one of these environments. But a rough
order of magnitude, we are looking at about $8 million per
lane. A place like Hong Kong, just one terminal has 10 lanes.
That does also not address the issue that Mr. Huizenga
spoke about which is transshipment cargo that does not come
through the gates. Those are basically on-dock transfers when
you have a vessel that comes alongside and takes some
containers off to then put on another vessel destined to the
United States. There is that complicating factor as well.
Certainly for this initial pilot, the cost of DOE and
Customs and Border Protection was about $30 million each, for a
total of $60 million just to run the pilots in these three very
small locations. That was a combination of DOE's resources and
capabilities for some of the hardware, the radiation portal
monitors, ours for the X-ray, and in one case, Honduras
actually capitalized the investment for the X-ray system. So it
is a very expensive proposition.
Senator Lautenberg. Without being too specific, are the
ports that send material to our country rated on some kind of a
risk basis? Do we believe that there are ports that are far
riskier than others for whatever the reason?
Mr. Ahern. Yes, we do, and there are a couple of additional
factors. Certainly the Coast Guard through their HSBIS reviews
do ratings. Certainly there is intelligence community
assessments as well, and also we have our own track record now
of a number of years of collecting information and doing risk
assessment on individual shipments coming from a location where
our automated targeting system has rated them above the
threshold that requires an examination. We have that data as
well. That goes into the compilation of how we would begin to
look at a more risk-based approach for particular trade lanes.
Senator Lautenberg. I recognize the work that you and your
CBP staff have done to set up the scanning pilot program, and
there will be some valuable lessons, as you indicated, learned
for going forward.
Industry representatives have tried to claim that some
security measures like mandatory container scanning are bad for
business because they will slow commerce. But I understand that
in some ports, including Southampton which you mentioned, after
scanning operations were in place, the port actually moved more
containers overall. Can you elaborate on that?
Mr. Ahern. Could you repeat that last line again? I am
sorry.
Senator Lautenberg. Yes. That the port actually moved more
containers overall out of Southampton, for instance. Can you
tell us whether or not the concerns of the industry are valid,
that they will slow commerce to a halt? I think our experience
in Southampton said that they see things moving more containers
as a result of their inspection.
Mr. Ahern. I would need to look precisely at the numbers or
the analysis that led to that conclusion. But I would submit
that with a place like Southampton--it is a very small universe
of containers coming to the United States. It is an
intermittent flow at best. I was just there about 6 weeks ago
to look at it again, and it is an 8-acre footprint, which goes
to one of the issues. We don't have the environment in most of
these ports to be able to put the lay-down of technology so
that it could stop at intermittent locations, usually three, to
be able to be scanned by the X-ray, the radiation portal
monitor, the optical character recognition, and then for the
officer in the alarm station to be able to do the review.
There has been some resulting benefit--and this is what I
touched on briefly in my oral statement--that if we can reduce
that risk overseas, that certainly is one of the exams we do
not need to do upon arrival in the United States if there is an
alarm that occurs. We then have the ability through the
information we have collected to transmit that whole electronic
file with the radiation spectra, the X-ray image, as well as
the automated targeting systems in one electronic file to our
domestic location, Newark, for example, to be able to say we
did have an alarm. We did resolve it before it came. That is a
very, very small manageable universe.
Senator Lautenberg. Right.
Mr. Ahern. That is one of the challenges to try to put
the----
Senator Lautenberg. Did that slow the pace? The work done
there--does that slow the pace of movement?
Mr. Ahern. I would submit there was no pace to disrupt in a
place like Southampton. It was such a small, intermittent type
traffic that shows up at the gate. It is such a small universe.
In a place like Hong Kong, for example, 1.2 million
containers roughly a year to the United States. Through each
one of those gates, you are running 300 containers an hour
through those gates. To be able to review the image, to be able
to read the spectra, to be able to go ahead and do any
resolution would add exponentially to the traffic and
throughput through those gates. That is where we see the
problems. It is not so much----
Senator Lautenberg. So 300 containers an hour move through
there.
Mr. Ahern. In a place like Hong Kong, that is where----
Senator Lautenberg. Yes, but electronic readings, however
they get them, for each container--inspection is done
electronically, technologically. Right?
Mr. Ahern. In Southampton, yes. And in Hong Kong, just one
lane of one terminal. And the normal throughput through all the
lanes is about 300 per hour.
Senator Lautenberg. Oh, all the lanes. OK, I am sorry.
Mr. Ahern. Per lane over all of the lanes. So it would be
300 times the 10 per hour coming through those facilities.
Senator Lautenberg. OK.
Mr. Ahern. But what the problem is--and we saw this even
when we went back to the Hong Kong demonstration project called
ISIS about 3 or 4 years ago, when there were claims and
representation that it was providing 100 percent scanning, I
also had an opportunity to see that personally as well. They
were scanning. They were just running containers through X-ray
and radiation portal monitors with no regard for the quality of
the image or any resolution of the image that was occurring
through this demonstration project through industry.
Each one of these technological systems has to be manned at
this point in time for somebody to look for the anomaly.
Otherwise, the complementary package of an X-ray with a
radiation spectra to see if there is any shielding of a harmful
isotope is going to be negated. So it has to have the human
intervention, a trained officer to look at the image to see if
there is an anomaly that could be there hiding an isotope of
concern.
Right now what does not exist--and this is one of the
challenges we see very significantly that is in the report--is
an anomaly recognition software so you do not have to spend 3
to 5 minutes per image to see if there are anomalies that are
out there.
Senator Lautenberg. It sounds fairly basic in terms of--if
it needs human intervention, obviously it is going to be
different. I am assuming that some kind of an alarm system that
picks out the particular thing that has got to be called
attention to would be operated also through the system that
does the analysis.
Mr. Ahern. There is a system for an alarm if an isotope is
identified. Those alarms are actually identified through the
radiation spectra capabilities. What is not existent is the
complementary package for the nonintrusive inspection
capability, the large-scale X-ray. There is no alarm capability
there that identifies that there is an anomaly in this
particular box without getting into too much detail. That is
what is going to be a critical piece to make this integration
of these technological packages a success, that each one have a
software capability to be able to alarm someone, whether it be
our presence overseas, which we would advocate----
Senator Lautenberg. That being the case, do the concerns of
industry register a problem that is real, that it would bring a
halt to commerce?
Mr. Ahern. In my estimation and in my experience and my
observation of the three pilot locations and also looking at
Hong Kong, if we were to apply this in a universe of 100
percent environment and each one of the alarms needed to be
resolved and each one of the X-rays needed to be determined by
a trained officer, it would bring commerce to a halt.
Senator Lautenberg. Well, Mr. Huizenga?
Mr. Huizenga. And I just want to add, if I could, one
clarification. In Southampton, I think it is fair to say, that
the gate traffic, the containers coming into and exiting the
terminal--it really did not impact the operation.
But the transshipped containers in Southampton were really
not inspected according to the requirements of the SFI. It was
not possible in the end. We ended up having to do some
workarounds. So it is another example of, although the gate
traffic is pretty easy to get, the transshipped containers were
still difficult to----
Senator Lautenberg. Yes. Well, but I am not sure about the
message we are sending out of here. We obviously need the
commerce. We need the activity of shipped materials. Enormous
traffic.
Is it suggested that we cannot be as safe as we should be
and still have the movement of material?
Mr. Ahern. Mr. Chairman, I would submit a few factors for
consideration.
First, the security systems--the layers we have in place
post-
9/11--have actually been very effective and they continue to
improve. We thank GAO for their continued reviews. Each time
they come, we find additional enhancements. For our 24-hour
rule, where we get advance information, we have a final
rulemaking about to come out that will get additional
information in advance of shipments so that we can run that
through our targeting systems to identify shipments of concern.
I think it is also important, as we look at our partnership
with industry, the security protocols they have put in place,
beginning at the onset of the supply chain, at the point of
stuffing which is the greatest opportunity for the introduction
of a significant piece of material that could be of concern or
a weapon or other contraband of concern--that is continuing to
get better.
I think it is also important to realize that when we began
this, we did have any radiation portal monitors here in the
United States. We had one that was being demonstrated over 4
years ago in Detroit. We now have 98 percent. 98 percent of the
container traffic coming to the United States, before it goes
into the commerce of the United States, actually goes through
radiation portal monitors before it departs the terminals at
the ports within the United States. That is a significant
accomplishment.
As we continue to go ahead and balance the security
responsibility, we also need to balance it against the risk.
The continual threat assessments show that the risk in the
maritime environment is relatively low. Certainly the
consequence is high. And I would submit with the risk reduction
strategy we have in place, I believe it matches what the risk
would be.
Now you weigh that against the consequence, the economic
consequence, of the layering of 100 percent scanning globally,
I think that is a huge consideration, and we need to make sure,
as we are putting security protocols in place, that we are not
going to give the terrorist organizations an opportunity to
claim victory because we responded in such a way that is going
to drive up costs so significantly.
And finally, I think we need to be mindful of the fact of
the consequences that really are out there looming large. I
again ask this committee to take a look at the report released
by the World Customs Organization and look at the submissions
by the trade industries, the international organizations, and
our international partners. They are calling for reciprocity.
So your port in New Jersey, sir, would be one that they would
say if you want us to do 100 percent scanning destined to your
country, we want the same reciprocal requirement from you. You
talk about logistics and movement to the trade community here
in the United States that exports, the impact that will have on
the trucking industry, the rail industry, the maritime
industry, the footprint to be required here in the United
States. It is a huge issue that has not even been studied from
an economic standpoint as we look at 100 percent scanning
overseas. Our foreign partners are saying we are just as
concerned with things coming from the United States. And that
really should be considered as well, sir.
Senator Lautenberg. Well, but there were things said a few
years ago about our ability to get the 100 percent scanning,
implying there that that would be 100 percent safe, 100 percent
secure.
Now, when you talk about the money being spent, look at
what we spend on baggage screening for airplanes. There is an
entire industry now that is related to having to provide that
kind of security and safety.
But as I hear you now, Mr. Ahern, I am concerned that the
message is, well, we cannot do it. If that is the case, then I
am going to ask for a comprehensive report from your Department
that tells us what can--I want the public to hear from the
people who have the authority, have the responsibility, have
the resources to do it to tell us exactly what the score is
here.
I want to just ask a question here. I understand that CBP
is receiving container scans now but that an individual person
has to look at each one of them to see if they present a
security risk, the thing we have just been talking about. So
what does the Department do now to develop the technology for,
as I suggested earlier, automatic detection? Can that be
achieved?
Mr. Ahern. Right now that has been a real technological
challenge for industry, and we certainly have been--the medical
industry has been challenged by this issue for a number of
years before we had this issue emerge as a homeland security
problem. We do not have the solution to that within Homeland
Security. We really challenge industry to come up with that
software anomaly recognition package. That is going to be the
key to make this go forward.
I also would submit, back to your previous question of
mixed messaging, I hope that is certainly not the case. But
just to clarify again here, I believe, to make sure the country
realizes, the security measures that are in place I believe
provides a layer of security that is appropriate and continue
to enhance each one of the layers.
And as we look forward, I would believe that we need to
take a look--to continue the risk layers in appropriate ways in
a place like we currently have in Pakistan where we have a
protocol in place where we actually screen 100 percent of
containers coming out of just one of the ports in a place like
Qasim, Pakistan. We certainly think it would make sense to take
a look at another location right there out of the same country,
a place like Karachi. We need to make sure that we start to
have a thoughtful approach to 100 percent scanning where it
makes sense in high-risk trade lanes so that we can actually
provide an additional layer, where we do not think the current
five layers of risk reduction are sufficient.
Senator Lautenberg. Yes. Well, it raises a question that is
not going to be resolved this day in this hearing.
Are we saying that there is a limit to the amount of
protection that the public can be afforded? And I am not
talking about afforded in price. I am talking about afforded in
functioning. We have so much of our resources now helping us to
defend against terrorist attack, against malicious targeting
with very high-powered weapons. Do you want to comment? Do you
want to give us an index of how safe we can be?
Mr. Ahern. I will give several points for consideration.
First off, no one should be misled to believe that 100
percent scanning with the current technology that is out there
or anything we see on the horizon is going to provide 100
percent security. No one should be misled by that point.
The other thing is certainly we need to realize there is
risk that needs to be assumed in every environment. The
maritime environment is not excluded or separate alone. I mean,
certainly it is a global impact economically, but certainly
even with the layers, even with 100 percent scanning thrown on
top, you still will not reduce the risk 100 percent. That has
to be an assumption going forward.
My biggest concern, with 32 years of experience, is we are
focusing in the maritime environment to the exclusion of other
areas of higher concern to this country and continue to invest
time, efforts, and resources in the maritime environment where
have other concerns that we need to have the funding, the
resources, and our technological attention directed toward. I
will be meeting with you this afternoon, sir, to talk about
rail security. That is another environment we have other
concerns about. So we need to take a look at the borders and
border security in its totality, not just continue to focus on
one particular aspect of homeland security in one particular
vector.
Senator Lautenberg. Do you want to add something, Mr.
Caldwell?
Mr. Caldwell. Yes, Senator Lautenberg. In my portfolio, I
do have other areas of maritime security beyond the CBP
programs, to include Coast Guard programs. Based on this other
work, I share some of Mr. Ahern's concerns. I would not want to
see 100 percent scanning become the ``Masinot Line'' of
maritime security. You are putting all your resources in a
certain type of attack in a certain vector. Those resources
could also be used to protect maritime areas that are
relatively unprotected now, such as bulk cargos, small vessels,
or attacks in the maritime environment by other means.
Senator Lautenberg. I remind you, before we close this
hearing, that we spend over a quarter of a trillion dollars,
close to a half, on a war that is supposed to protect us
against terrorism. That is what we say. Now, if we were to
place the same emphasis financially on protecting us from an
invasion through the shipping structure, might we solve the
problem? Mr. Ahern, you mentioned money several times. And I
agree. We have got to put it where our interests lie. But I do
not see it happening right now, but I do see us spending the
money in Iraq and Afghanistan and other places around the
world. But we have not had the kind of loss that we had on our
own shores at 9/11, the number of people that lost their lives
in my neighborhood, if you will.
So there is something here that I think would be of
significant public interest, and that is, we are saying--or the
Administration is saying--you are representing their view and
their determination--that we cannot expect the kind of result
that we were led to believe we would get. That was the
assumption. The 100 percent inspection was thought to be, if
not 100 percent safety, that we were very close to that kind of
a protection wall.
So whatever you have got to develop for us, Mr. Ahern, I
ask you to do so and be blunt so that the public understands
what is happening now in this Administration and in our world.
Thank you. This Committee hearing is adjourned.
[Whereupon, at 11:06 a.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of American Association of Exporters and Importers
Chairman Lautenberg, Ranking Member Smith, and Members of the
Subcommittee,
The American Association of Exporters and Importers (AAEI)
appreciates the opportunity to offer its comments on U.S. Customs and
Border Protection's (CBP) Secure Freight Initiative (SFI) and its other
supply chain security efforts.
AAEI has been a national voice for the international trade
community in the United States since 1921. Our unique role in
representing the trade community comes from our broad base of members,
including manufacturers, importers, exporters, wholesalers, retailers
and service providers, including brokers, freight forwarders, trade
advisors, insurers, security providers, transportation interests and
ports. Many of these enterprises are small businesses seeking to export
to foreign markets.
AAEI is truly a member driven organization. In AAEI's committees,
conferences and working groups, the professionals who make up our
membership spend hours sharing their trade facilitation, supply chain
security and other international trade experiences with other
professionals and learning from the experiences of others. Through
those activities, our members are able to coalesce around those
experiences into an in-depth analysis of important international trade
policy issues and provide that insight to policymakers in Washington
and throughout the world.
AAEI is deeply interested and vested in the subject of this
hearing. We have multiple concerns regarding the effectiveness,
efficiency, significant costs, practicality, and real world benefits of
SFI initiatives and other government mandated efforts such as 100
percent scanning. We hope that the practical experience of our members
in compliance, trade facilitation and security will be of assistance.
While AAEI remains very concerned about the implementation of 100
percent scanning on a global basis,\1\ we believe the prototype testing
undertaken in implementing SFI to be a correct approach to the
development and implementation of important supply chain security
programs. The development and implementation of such important and
complex programs requires comprehensive testing to, ensure that the
programs will effectively and efficiently provide the enhanced
operation that we all desire and recognize, as intrinsic to achieving
immediate and long term economic and homeland security benefits.
Implementing 100 percent scanning or any other universal data
submission project without such a prototype may unnecessarily result in
gridlock at the ports, the submission of overwhelming volumes of data
and the expenditure of enormous public and private resources
reengineering solutions to problems that could have been, and frankly
must be, avoided. As export/import enterprises, it has been our
experience that testing proposed security programs using real world
systems and processes is not only necessary for successful
implementation but critical to the determination of what, if any,
increased security can be obtained.
---------------------------------------------------------------------------
\1\ Among our concerns are that each and every one of the statutory
performance and implementation criteria are met. See 9/11 Commission
Act Section 1701(b)(4).
---------------------------------------------------------------------------
In our comments on CBP's January 2, 2008, Notice of Proposed
Rulemaking, we urged CBP to fulfill its obligation under the SAFE Port
Act to test the ``feasibility'' of its proposal by undertaking just
such a prototype before implementing the 10+2 advanced data
requirements. Unfortunately, CBP has steadfastly refused to conduct a
full pilot of its 10+2 proposal, instead running a very limited
prototype.
AAEI believes that a pragmatic ``holistic'' approach to trade
security is paramount. This committee's grasp of commercial and
technological realities is of great value in understanding and dealing
with multiple independently created public and private sector
initiatives each intended to address vital homeland security related
issues. Your jurisdiction both requires and enables exploration at the
increasingly difficult intersection of compliance, facilitation,
safety, and security.
As the Committee knows, there are numerous trade security efforts
that directly impact vital U.S. supply chains. These programs include
supply chain partnerships, data collection, advanced data methods,
related security program elements and 100 percent scanning, among many
others. The depth and extent of these programs can be seen in AAEI's
now familiar American Trader's Guide to Post 9/11 and
Homeland Security Programs. (A copy is attached.) Also available at
http://www.aaei.org/aaei/files/ccLibraryFiles/Filename/000000003019/
TSP%20FINAL%
20%2801-16-08%29.pdf.
Initially released in the Fall of 2007, and recently updated to
include the ``10+2'' information, the Guide is the product of extensive
discussions and review with policymakers, industry observers and trade
professionals. The Guide provides trade professionals with one piece of
paper showing the vast number of the trade security programs that
companies have to deal with. You will notice that the single sheet of
paper is not a standard size sheet. In order to make the list of trade
security programs fit on a single sheet of paper, we had to use a
larger size. In fact, we had to go to two pages!
The Guide provokes one of the fundamental security questions of the
Post-9/11 age: How many layers of security are enough for risk
management to work?
AAEI supports the risk management concept of ``defense in depth.''
We believe that the best security is derived from an approach in which
well integrated security programs are layered together to create a web
of defense against terrorism. To be well integrated, the layers of such
a defense must not unnecessarily overlap, or leave gaps. Layers should
not be added if they provide no demonstrable security gains. In fact,
such layers are likely to undermine security as they take scarce
resources of time and money from the layers that do provide security
gains.
While each program listed in the Guide may have provided valuable
security initiatives when they were implemented or even when viewed in
isolation, the Guide makes clear that, these programs have, with the
best of intentions, been introduced without being integrated into
existing regulatory legislative or private sector designed structures.
In fact, they have emerged from multiple Congressional committees,
Government Agencies and private sector initiatives with limited policy
consultation amongst these diverse ``entities''. Thus, both DHS/CBP and
the trade community face an expanding trade security environment of
unnecessarily burdensome, complex and often overlapping programs. With
the complexity and overlapping nature of the current security
environment, programs that, on their face, may appear to increase
security may actually provide no measurable security gains.
This point can be best illustrated by examining the security
environment of a single supply chain.
Let's look at security layers that are applied by U.S. CBP to a
container exported from Pakistan's Port Qasim to a validated C-TPAT
participant in the U.S. today.
Layer 1: As a validated C-TPAT participant, information about
the participants in the supply chain and their security
practices have been provided to, and validated by, U.S. CBP.
CBP has validated that the C-TPAT participant is utilizing the
supply chain security ``best practices'' that have been
identified by CBP. CBP's validation of this information is done
prior to the container's arrival at the port of export.
Layer 2: Once a specific shipment has been initiated, the
container is prepared and sent to Port Qasim. According to
CBP's Secure Freight Fact Sheet, when the container arrives in
the port, officials of the Pakistan government subject it to
passive radiation detection equipment and non-intrusive
inspection (NII) equipment. The NII uses ``x-rays or gamma rays
to penetrate the container and produce an image of the
contents.'' The output of these scans is integrated with other
data available to the terminal operator, the Pakistani
government (including export declaration data which is also
sent to CBP), and in other governmental systems. The image of
the content and the other integrated data is electronically
provided to CBP's targeting system in real time. CBP personnel
are able to examine that information to determine whether the
contents of the container present any threat.
Layer 3: Twenty 4 hours prior to the loading of the vessel, the
vessel carrier must provide CBP with manifest information
through CBP's Automated Manifest System. That manifest
information includes the names of the parties involved in the
transaction, a description of the goods and other shipment and
transportation data.
Layer 4: Within 24 hours of arrival at the U.S. port, the
validated C-TPAT importer will pre-file its entry summary in
order to get the benefit of CTPAT's lower targeting scores.
Again, the entry summary contains much of the same basic
information that has been provided in the three previous layers
described above (e.g., names of the parties, description of the
goods etc.)
Yes, there are data differences between the various layers, but the
vast majority of the information is the same. Moreover, for repetitive
shipments of the same commodity between the same parties, the redundant
data will be provided over and over again. This is in direct
contradiction to one of the principle goals of ATDI--an account based
approach to homeland security, which would greatly reduce the need for
redundant data to be submitted to the government over and over again.
On January 2, 2008, CBP proposed a 5th data layer--the ``Importer
Security Filing and Additional Carrier Requirements'' proposal (also
known as the 10+2 proposal). This layer would require the U.S. importer
(regardless of CTPAT status) to file a Security Filing (SF) to CBP 24
hours prior to the loading of the container on the vessel. The filing
of the SF is required without any consideration being given to whether:
(1) the importer is validated C-TPAT member; (2) that much of the same
basic information from the same sources has already been provided by or
on behalf of the importer; or (3) whether the shipment is being
exported from a SFI port that provides CBP with a real time image of
the contents of the container before it is loaded on the vessel.
As just one example, AAEI believes it is unnecessarily duplicative
to require the submission of the ``10+2'' line by line targeting data
24 hours prior to vessel loading from low risk importers on shipments
that have already been subject to: (1) C-TPAT validation; (2)
radiological scanning; (3) content image scanning; and (4) the filing
of manifest data. Thus, for C-TPAT shipments from SFI ports, no 10+2
submission should be required.
AAEI urges the members of this subcommittee and other Members of
Congress to require CBP to take a holistic approach to supply chain
security and integrate the plethora of security programs into a
cohesive program that provides quantifiable risk reduction in light of
the true risks posed by terrorists.
We thank you again for allowing us to submit these comments. We
look forward to providing you with further information at your request,
and stand ready to assist in any way possible.
______
Prepared Statement of Renee Stein, Chair, and Richard M. Belanger,
Counsel; Business Alliance for Customs Modernization*
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\*\ American Honda Motor, Archer Daniels Midland, BP America,
Caterpillar, Chrysler, Ford Motor, General Electric, General Mills,
General Motors, Hanesbrands, Hewlett Packard, Home Depot, IBM, J.C.
Penney, Limited Brands, Lowe's, Mattel, Microsoft, Nike, Nissan North
America, Sears, Shell, Sony Electronics, Target Corporation, Toyota,
Wal-Mart
---------------------------------------------------------------------------
The Business Alliance for Customs Modernization (BACM) submits this
statement to the Senate Commerce Subcommittee on Surface Transportation
and Merchant Marine Infrastructure, Safety and Security regarding its
hearing June 12, ``Supply Chain Security: Secure Freight Initiative and
the Implementation of 100 Percent Scanning.''
BACM is a coalition of U.S. companies that import and export
extensively, filing over two million entries valued at more than $130
billion per year. It is dedicated to modernization of U.S. customs
laws, regulations and policies and committed to the facilitation of
trade to the greatest extent possible consistent with customs
compliance and trade security.
BACM members strongly support U.S. Government efforts to make the
global supply chain more secure in the post-9/11 environment. We have
eagerly participated in forums like the TSN and COAC and have
participated in the development of programs such as C-TPAT and the 24-
hour rule. What makes these programs so successful is that they were
developed cooperatively with the trade to target security risks without
creating unnecessary burdens for businesses. While BACM members have
faced increased costs as part of these efforts, we support these
programs because they achieve the critical balance between our national
security and economic interests.
BACM members object, however, to additional security requirements
for shipping when the security benefit is negligible and adds an
unnecessary burden to industry. We are concerned that, in its desire to
protect our borders, the U.S. is enacting layer upon layer of security
programs without consideration of how they reconcile with each other or
whether they create burdensome redundancies. The 100 percent scanning
requirement raises this question. If CBP will be requiring the trade to
perform extensive data reporting under the 10+2 initiative to identify
high risk cargo for further scanning, how does this reconcile with the
100 percent scanning requirement once implemented?
We urge the Committee to give serious consideration to these issues
in order to avoid putting U.S. companies at a competitive disadvantage
through compliance costs that are economically and logistically
burdensome and yield no appreciable additional security benefit.
The Security and Accountability For Every (SAFE) Port Act of 2006
(P.L. 109-347) created the Secure Freight Initiative, a pilot program
for 100-percent screening of inbound containers at three overseas
ports. The program combines non-intrusive inspection imaging with
radiation portal monitors to identify any anomalies in shipments
destined to the United States and to target those containers for
further inspection. The program has now been tested for a limited time
in smaller ports in Honduras, Pakistan and the United Kingdom and has
been found by CBP to have significant technical, operational, resource-
related shortcomings. Of high concern is the fact that the computer
technology and capacity does not exist for quickly and accurately
identifying anomalies in shipments, particularly for transshipped
cargo.
The Implementing Recommendations of the 9/11 Commission Act of 2007
(P.L. 11053), requires 100 percent screening of all imported containers
by non-intrusive imaging equipment and radiation detection equipment by
July 1, 2012. With this hearing, Congress is looking at how to
reconcile the SFI pilot results with the mandates under the 9/11
Commission Act. We hope that the Congress will delay implementation of
the 100 percent scanning requirement until the technology is available
to ensure quick and efficient scanning that does not cause burdensome
congestion in port operations overseas.
The SAFE Port Act of 2006 also instructed CBP to evaluate whether
additional cargo information would be needed to better evaluate
shipment risk. In response to this mandate, CBP has recently proposed
its so-called ``10+2'' data elements proposal, which would impose
extensive new data reporting requirements on shipments to the U.S. 24
hours before lading at foreign ports. The purpose of 10+2 is to prevent
smuggling of weapons of mass destruction into the U.S. and enhance
cargo safety before goods are loaded onto U.S. bound boats. If CBP
identifies an anomaly in the data reported, the cargo is then subject
to scanning to better identify whether there is a threat to U.S.
commerce.
The mandate for the 10+2 proposal was enacted before Congress
passed the 100 percent scanning requirement. It is now clear, however,
that the two programs together overreach. The 10+2 was meant to help
CBP target suspect cargo for scanning. The 100 percent scanning
requirement would render the 10+2 additional data elements redundant or
useless.
BACM has submitted public comment on CBP's 10+2 program, expressing
significant concerns that the program would impose commercial costs and
delays, putting U.S. companies at a competitive disadvantage in the
global economy. Our concerns are many but can be summarized as follows:
1. there has been no demonstration to the trade community as to
how this proposal would measurably improve supply chain
security;
2. the proposal moves away from risk management principles as
the necessary solution to burgeoning trade flows, legitimate
regulatory needs and limited or static resources;
3. the proposal treats all shipments for all sources as the
same, without regard to trusted partner or authorized economic
operator programs such as Customs-Trade Partnership Against
Terrorism (C-TPAT) and more secure trade;
4. for many shipments 10+2 requires reporting combinations of
the same data attributes over and over again, resulting in
redundancies and the overload of repetitive data;
5. in many cases, the newly required data elements are not
known or readily available as early in the supply chain as the
proposal assumes;
6. 10+2 reporting requirements would ignore account-based
processing that is the basis for the Automated Customs
Environment;
7. the proposal seriously underestimates the costs that would
be imposed on business; and
8. it would not address a number of logistical and processing
issues that need clarification before moving forward
9. a true-to-life prototype should be conducted using
representative importers of different sizes and from different
industries in order to learn more about how the proposal will
work when CBP collects the data according to proposed rules and
conducts actual targeting.
We believe that these concerns should be addressed before the
Administration moves ahead with the 10+2 initiative. More broadly, it
is critical that coherence be brought to the entire spectrum of supply
chain security programs.
We agree that it is imperative that the U.S. Government work to
eliminate container vulnerabilities, but it must not be done by piling
on layer after layer of initiatives with little added security benefit.
Congress must work to reconcile all of the security initiatives
currently in place to ensure a more fluid and complementary system that
is not overly burdensome to the trade. Serious consideration must be
given to the cost and benefits of each new security system before the
Congress and Administration impose additional burdens on the industry.
Such concepts as reporting exemptions for low-risk shipment and
account-based filing for repetitive shipments are examples of
provisions that might better reconcile the overlapping security
mandates.
We appreciate the opportunity to submit this statement. Thank you
for your consideration of our views.
______
Prepared Statement of Catherine Robinson, Associate Director, High
Technology Trade Policy on behalf of the National Association of
Manufacturers (NAM)
The National Association of Manufacturers (NAM) is providing the
following written statement for the record of the Committee on
Commerce, Science, and Transportation; Subcommittee on Surface
Transportation and Merchant Marine Infrastructure, Safety, and Security
Hearing ``Supply Chain Security: Secure Freight Initiative and the
Implementation of 100 Percent Scanning'' held on June 12, 2008. The NAM
represents a broad spectrum of U.S. manufacturers, with members in
every industrial sector and every state. Its membership includes both
large multinational corporations with operations in many foreign
countries and small and medium manufacturers that are engaged in
international trade on a more limited scale. Our members depend heavily
on imported parts, components and finished products to compete not only
in the U.S. marketplace but in foreign markets as well.
NAM members recognize the important role Customs and Border
Protection (CBP) plays not only in protecting the United States but
also in facilitating legitimate trade. Our members are committed to
working with CBP and other U.S. law enforcement agencies to keep
America secure and safe from terrorist threats and other security
challenges. Many NAM members gladly participate in the numerous CBP
initiatives that make the United States more secure.
This hearing is timely as CBP is currently working on a number of
new initiatives. While the NAM supports the efforts of CBP, we want to
ensure that new customs requirements achieve the dual CBP goals to
``enhance national security while protecting the economic vitality of
the United States.'' The NAM recognizes the difficulty of striking the
right balance between the two. We believe, however, that protecting
national security and facilitating international trade need not be
mutually exclusive.
Striking the right balance between enhancing national security and
facilitating trade is critical. Manufactured goods accounted for 76
percent of all imports into the United States in 2007, or $1.9
trillion. U.S. manufacturers have global supply chains, source inputs
from around the world, and import parts and components on a daily
basis. Many have developed ``just-in-time'' supply chains to stay
competitive in today's global economy. Therefore, any new programs
developed by CBP must be mindful of the way U.S. manufacturers operate
their supply chains and their important role in the U.S. economy. New
programs should be real world tested to guarantee that they are both
fully effective from a security perspective and do not place U.S.
manufacturers at a competitive disadvantage vis-a-vis their competitors
around the globe.
In order to strike the right balance, CBP must implement new
programs based on sound risk management principals. Low-risk cargo from
trusted, fully-vetted shippers should be treated differently than high
risk cargo. CBP should not implement programs that treat the two
identically. Doing so wastes limited resources on containers and
companies that have been validated by CBP, and leaves insufficient
resources to focus on the higher risk shipments.
The NAM welcomes this Committee's and others' interest on customs
programs. There are a myriad of customs issues that merit attention
including resources for CBP, technical issues such as duty drawback,
interagency cooperation, international recognition, intellectual
property rights and supply chain management programs such as C-TPAT.
While those issues are deserving of increased attention, the NAM would
like to focus our statement on the issue at hand--100 percent scanning
and how it relates to current CBP initiatives such as the so-called
Customs 10+2 proposed rule.
While 100 percent scanning remains a controversial and problematic
issue, the NAM believes in the Congress' approach to testing 100
percent scanning through a serious pilot program around the world
before requiring U.S. manufacturers to change business models globally.
Real-world testing is critical for new programs of this magnitude. The
100 percent scanning pilot program has already proven useful as it has
shown the government where the problems lie, what needs to be improved
or changed, and, most importantly, that the government lacks the
capacity to process the breath of information provided by 100 percent
scanning. Specifically, CBP stated in May 2008 that the 100 percent
scanning pilot program has already shown that the initiative is cost
prohibitive for three reasons: (1) the cost of the necessary technology
is extreme; (2) the bandwidth requirements for the scanned images are
too great; and (3) the cost of the personnel to review the images and
run the program is exorbitant.
We believe the 100 percent scanning pilot program provides an
excellent precedent for current CBP initiatives and strongly believe a
real pilot program is needed for the proposed 10+2 rule. The proposed
10+2 rule will also drastically change the way U.S. manufacturers
operate, even more so than the 100 percent scanning mandate--entire
supply chains and just-in-time delivery systems will be undone by the
proposed rule. Yet, CBP has indicated it will not conduct a pilot
program before a final rule is implemented. We are aware of no test,
including the Advance Trade Data Initiative (ATDI), that is being run
that tests from end to end the many requirements of the proposed rule.
Failure to conduct a pilot program will have severe negative
consequences to the U.S. economy and our national security.
The NAM is not opposed to the intent of the proposed 10+2 rule.
However, as currently drafted the rule not only fails to enhance
national security, it also fails to facilitate trade by greatly
increasing the cost of doing business for U.S. manufactures--achieving
neither of CBP's dual goals. The NAM has offered to CBP several
specific ideas to improve the rule including testing it through a pilot
program and providing benefits to C-TPAT members. Our recommendations
have thus far not been heeded.
As this hearing has shown, pilot programs are critically important.
NAM members stand ready to comply with 10+2 and to invest hundreds of
billions of dollars to change their operations. However, before NAM
members invest the money, they would like to know that the program will
not be changed 6 months after implementation to correct some of the
deficiencies in the program. A pilot program would prevent
manufacturers and the government from having to make multiple changes
to their operations. Additionally, it would allow the government to
address the security risks that will arise from implementation of the
proposed rule (i.e., containers sitting in foreign ports for several
days waiting to be loaded on vessels).
In the Safe Port Act of 2006, Congress instructed CBP to develop a
way to collect more data in advance of lading for which CBP proposed
the 10+2 rule. Then in 2007, Congress mandated that every container
coming into the U.S. should be scanned to provide CBP advanced data
before lading by 2012. Implementing both programs is not only
unnecessary but also an inefficient use of limited government
resources. The NAM believes now is the time to evaluate rigorously all
customs programs and to take a holistic approach to national security.
Redundant programs should not be implemented.
The NAM supports the 100 percent scanning pilot program and
believes it sets the correct precedent for real-world testing on other
major CBP initiatives. The NAM asks that the proposed 10+2 rule also be
real-world tested before final implementation. Phased-in enforcement is
no substitute for a pilot program.
NAM members are committed to working with CBP to keep America
secure from terrorist threats. However, new programs and initiatives
must be based on risk management principles in order to enhance
national security and facilitate trade. National security and economic
vitality are not mutually exclusive and the NAM firmly believes the
right balance can be struck to achieve the dual goals.
______
Response to Written Questions Submitted by Hon. Frank. R. Lautenberg to
Jayson Ahern
Question 1. In your April report to the Appropriations Committee on
the SFI pilot, you stated that over 13,000 data filed from the three
operational ports had been successfully integrated, transmitted and
received. This is no small feat in technologically and you should be
lauded for your progress in this area. What is that total number to
date?
Answer. Since October 2007, SFI has scanned 237,054 containers in
Southampton, U.K., Port Qasim, Pakistan, and Porto Cortez, Honduras.
The scanned images and associated data captured by SFI's integrated
scanning system at the foreign ports have been transmitted back to the
National Data Center and fused with trade data required by the 24 hour
rule and made available to all Customs and Border Protection (CBP)
Officers with access to Automated Targeting Systems ATS. CBP Officers
stationed at SFI or CSI ports, the NTC-C, or at domestic ports (ATU's)
are able to access the additional data when determining the potential
risk of U.S. bound shipments from SFI locations.
Question 2. In all of the pilot locations, you experienced
significant concerns with labor over the safety of scanning equipment
and concerns about potential radiation exposure. While you mention the
DHS has conducted extensive studies on the occupational safety of this
equipment, is your research and findings supported by the National
Academy of Sciences or the National Institutes of Health? You mention
in your report that several studies have been conducted on this issue,
can you please provide for the Committee what specific studies you are
referring to?
Answer. There have been several independent studies of health and
safety issues related to the SAIC P-7500. CBP and the U.S. Department
of Defense have concluded that the drive-through P-7500 does not pose a
threat of radiation exposure to drivers, operators or by-standers. SAIC
has also conducted tests to ensure that its equipment is within the
radiation dose limits set by the International Council of Radiation
Protection. Results of these tests have been published and presented to
foreign governments.
One of the hurdles in operating scanning equipment overseas has
been the regulations pertaining to radiation exposure in foreign
countries. Upon placing imaging equipment in Southampton, U.K., CBP was
informed that the P-7500 must comply with the United Kingdom Health and
Safety Ionizing Radiation Regulations (IRR) of 1999. To comply with the
regulations, a Radiation Protection Advisor was contracted to train and
certify four CBP officers to become on-site radiation security
officers. Additionally, an independent study conducted by NUKEM (the
designated U.K. radiation compliance company for Her Majesty's Revenue
and Customs and the Southampton Container Terminal), evaluated and
tested the P-7500. Their conclusions mirrored the same positive
conclusions as other independent studies stated below. Her Majesty's
Revenue and Customs also posted a letter on a trade webpage describing
the safety features of the P-7500, along with the radiation safety
testing performed by NUKEM. This letter certified that the P-7500 does
not pose any radiation hazard to truck drivers, operators, or
bystanders when operated and maintained properly.
Another hurdle in using scanning equipment overseas has been the
safety concerns of the personnel operating the equipment. In
Southampton, U.K., and Busan, Korea, truck drivers and their unions
were concerned about possible exposure to radiation while driving
through the non-intrusive inspection (NII) equipment. Therefore, CBP
published fact sheets describing the safe operation of the P-7500 and
the numerous tests conducted and the outcomes. These fact sheets were
distributed to the terminal operators' employees, truck drivers and
their unions. To further prove that there is no radiation risk
associated with the P-7500, CBP health physicists were commissioned to
supply dosimeters to the CBP officers in Southampton. These dosimeters
are rotated through Southampton and are evaluated in Indianapolis on a
quarterly basis.
To date, the National Academy of Sciences and the National
Institute of Health have not conducted any studies that would challenge
the findings of our tests.
Question 3. In your testimony you stated that in both 2005 and in
2008 GAO reported that CBP's human capital plan did not appropriately
determine the optimal number of CBP officers needed at each CSI seaport
to effectively carry out its duties. Do you know if the human capital
plan has yet been modified since you released your report on the CSI
program in January?
Answer. CBP completed a study that determined the optimum number of
Targeters for each CSI port based on the volume of shipments and risk
considerations. The total number of CBP personnel who can be stationed
at the overseas CSI locations is limited by a host of factors. i.e.,
the U.S. Department of State (DOS) determines the number of U.S.
personnel that can be stationed abroad. DOS takes into consideration
the number of U.S. personnel that are already stationed abroad and how
the increase in the numbers would benefit the U.S. They also consider
whether the host nation will request an equal number of their own
government personnel to be stationed in the U.S. receiving the same
Privileges and Immunities granted to U.S. personnel. The staffing
allocation model has been adjusted by stationing Targeters at the
National Targeting Center to support CSI operations by pre-screening
and targeting shipments that cannot be handled due to the reduced
number of Targeters actually stationed abroad. The Targeters at the
NTC-C would be screening Bills of Lading that are below a certain
threshold, in order allow the CSI Targeters to concentrate on shipments
that have a higher score on the ATS. This allows the CSI Targeter more
time in developing additional information to substantiate or negate the
risk of the targeted shipment. The GAO was presented with this Staffing
Allocation Model on October 2007. This information is For Official Use
Only (FOUO).
Question 4. What is the national policy of Canada and Mexico with
respect to scanning of inbound cargo containers? Does Canada and Mexico
have a scanning requirement to prevent weapons of mass destruction from
entering their ports of entry in cargo containers? If either nation
does have such a requirement, is it stronger or weaker than the U.S.
requirements for the scanning of inboard container cargo?
Answer. Canada: Canada uses risk-management systems and processes
to screen, scan and release goods rapidly while ensuring safety and
security. Targeting is an approach for identifying potentially high-
risk goods for examination. The Canada Border Services Agency's (CBSA)
targeting activities are multi-faceted, multi-dimensional and embedded
in virtually every area of the organization. Goods can be targeted
before they come to Canada, upon arrival, and in some cases, post-
arrival. For example, under the Advanced Commercial Information (ACI)
system, marine and air carriers must transmit conveyance and cargo
reports for all vessels and aircraft loaded with commercial goods
destined for Canada. Targeters use this data to search for health,
safety and security threats before the vessel or aircraft arrive in
Canada. Targeters also review the risk scores and cross-reference
suspicious cargo against a number of data bases to determine whether an
examination should follow. If a container is selected for examination,
Canada may elect to use a mobile Vehicle and Cargo Inspection System
(VACIS) to detect irregularities in the shipment. The mobile VACIS is a
truck-mounted, gamma-ray scanning system that captures an image of a
marine container, rail car or truck contents. Other detection equipment
that the CBSA employs may be in the form of imaging equipment,
explosive detectors and radiation detection technologies.
Mexico: Through bi-national agreements allowing for the sharing of
best practices with CBP, Mexico has developed a national policy very
similar to that of the United States in that it utilizes data analyses
to target high risk shipments. Under this strategy, Mexico Customs
presently runs 69 cargo non-intrusive inspection (NII) equipment sites
nationwide. At present time, 100 percent of rail shipments and 90
percent of all empty inbound conveyances are scanned at Mexico's four
principal seaports. The ports of Veracruz and Altamira are located
along the Gulf of Mexico and Lazaro Cardenas and Manzanillo are located
on the Pacific coast. Trade at the two Pacific coast ports is growing
at an annual rate of approximately 12 percent, partially because U.S.
west coast ports are at capacity. Altogether, these four ports account
for 92 percent of Mexican maritime trade. Mexico's four major Seaports
scan 100 percent of all inbound shipments with VACIS imaging systems.
Mexico has implemented a 24-Hour Manifest Rule based upon the U.S.
version. The Government of Mexico has the capacity to conduct 100
percent imaging on inbound shipments. Additionally, at the port of
Veracruz, the Mexican government installed an integrated scanning lane
(a VACIS system integrated with a radiation portal monitor) to scan all
exports. Under the Megaports Initiative, Mexico will cost-share with
the Department of Energy to install radiation detection equipment to
scan all vehicle import and export traffic at each of the four major
ports: Veracruz, Altamira, Manzanillo and Lazaro Cardenas.
Canada: Both Canada and the U.S. have signed a Mutual Recognition
Arrangement called the Customs-Trade Partnership Against Terrorism (C-
TPAT) and Partners in Protection (PIP) agreement, with the goal of
securing the entry of goods into the U.S. and Canada by preventing
terrorists and their weapons from penetrating the global supply chain.
In addition, the Canada Border Services Agency (CBSA) uses the
latest technology to help prevent contraband and dangerous goods from
entering Canada by marine trade and other modes of transportation. Such
technologies include radiation detection equipment, (VACIS), and Pallet
VACIS. The use of these technologies enables CBSA officers to conduct
effective, non-intrusive inspections and allows them to focus on high-
risk goods.
Mexico: Mexico Customs has deployed 150 handheld? radiation
detection equipment systems at its seaports and major airports, as well
as along the U.S.-Mexico border. Mexico Customs presently runs 69 cargo
non-intrusive inspection (NII) equipment sites nationwide scanning rail
shipments, empty inbound seaport conveyances and inbound seaport
shipments. This equipment includes operational VACIS at the four major
seaports. In 2007 the Mexico Ministry of Finance signed a memorandum of
understanding (MOU) with the U.S. Department of Energy (DOE) for the
implementation of the Megaports Initiative. When fully implemented,
this initiative is intended to allow scanning by radiation detection
equipment of 100 percent of the imports and exports entering/exiting
the port by truck at the four largest Seaports (Veracruz, Manzanillo,
Altamira, and Lazaro Cardenas). These four ports handle 92 percent of
all seaport cargo. The first Mexican Megaport--Veracruz--is anticipated
to be operational in February 2009. Under the MOU, Mexico will share
information on detections or seizures of special nuclear and other
radioactive materials made as a result of the equipment.
------------------------------------------------------------------------
Port Import Export Total
------------------------------------------------------------------------
Manzanillo 494,620 425,302 919,922
Veracruz 165,420 243,552 408,972
Lazaro Cardenas 80,654 81,314 161,968
Altamira 107,518 129,587 237,105
------------------------------------------------------------------------
Totals 848,212 879,755 1,727,967
------------------------------------------------------------------------
United States: U.S. Customs and Border Protection (CBP) has
developed numerous programs and systems to identify and select high-
risk shipments as part of our multi-layered enforcement strategy. While
CBP cannot physically examine all containers, CBP does review virtually
100 percent of all shipments that arrive into the United States. This
is accomplished by an electronic review of all shipments through the
Automated Targeting System (ATS), which then sorts the shipments by
level of risk.
In addition, through the Container Security Initiative, CBP is
pushing our nation's zone of security beyond our physical borders by
working with nations from around the world to target, screen, and
inspect high-risk containers that are bound for the United States.
To further reduce the risk of weapons of mass destruction or
illicit nuclear/radiological materials that could be smuggled into the
United States, CBP launched the Customs-Trade Partnership Against
Terrorism (C-TPAT). As of September 17, 2008, approximately 8,596
certified partners have joined CBP in the war against terrorism. Under
the C-TPAT initiative, CBP works with participating companies--i.e.,
carriers, importers, and other industry sectors--to substantially
increase end-to-end supply chain security.
At our land borders, CBP currently deploys multiple technologies to
support our multi-layered inspection process. These technologies
include large-scale non-intrusive inspection imaging systems, radiation
portal monitors, radiation isotope identifier devices and personal
radiation detection devices.
Risk assessment and targeting have played an important role in the
U.S., Canada and Mexico's commitment to safeguarding North America, as
part of the Security and Prosperity Partnership (SPP). At the SPP
Montebello Summit in August 2007, the U.S., Canada and Mexico agreed to
work together to establish risk-based screening standards for goods and
travelers that rely on technology, information sharing and biometrics;
develop and implement compatible electronic processes for supply chain
security that use advance electronic cargo information to analyze risk
and ensure quick and efficient processing at the border; develop
standards and options for secure documents to facilitate cross-border
travel; and exchange additional law enforcement liaison officers to
assist in criminal and security investigations.
Canada: Canada's requirements for the scanning of inbound container
cargo are similar to U.S. requirements. The U.S. works closely with
Canada under the Container Security Initiative (CSI) to detect and
deter terrorist use of maritime containers while facilitating the
movement of legitimate trade. CBP officers have been assigned to three
major ports of entry in Canada--Halifax, Vancouver and Montreal--to
screen manifest data before a container is shipped to the U.S. by
cross-referencing CBP data bases. Canadian host government officers
will then examine containers which pose a potential risk to the U.S.,
using either radiation detectors or large-scale radiographic imaging
machines to detect potential terrorist weapons. Similarly, Canadian
joint task officers under the SPP agreement are stationed in Newark and
Seattle to perform functions similar to those that CBP CSI officers
perform in Canada, in an effort to increase security for containerized
cargo destined to Canada.
Mexico: Mexico has scanning requirements in place and strives to
mirror those of the U.S., but has less experience in conducting risk
assessment. Mexico Customs is in the process of establishing its own
National Targeting Center (NTC) similar to the one CBP currently has.
CBP will play a key role in assisting Mexico Customs to stand up its
operations and then to develop targeting systems modeled after the CBP
systems.
Question 5. At present, do cargo containers unloaded off ships in
Canadian and Mexican ports get transshipped by rail and truck to final
destinations in the United States?
Currently, what is the level of cooperation and coordination
between U.S. and Canadian authorities and U.S. and Mexican authorities
to ensure that these transshipped U.S.-bound cargo containers do not
present a significant risk for weapons of mass destruction?
Does Customs and Border Protection need additional authority in
this area, for example with respect to international freight rail
crossing at the U.S. border?
Answer. There are many trade lanes available which an importer may
utilize while importing cargo into the United States. Transshipping
cargo by rail/truck from Mexico or Canada is a viable option that is
routinely used. Approximately 98 percent of all containers entering the
United States from Mexico or Canada are scanned by a RPM device upon
entry regardless of their country of origin.
Seaport security programs in place in Mexico and Canada provide an
additional layer of screening and scanning of transshipped cargo. As
was discussed above, 92 percent of Mexican maritime trade arrives at
one of four principal ports. The Government of Mexico already has 100
percent imaging capacity for inbound shipments and, under the Megaports
Initiative, is cost-sharing with the Department of Energy to install
radiation detection equipment to scan all exports and imports arriving/
departing by truck at each of its four major ports. Under a pilot
program, Mexico installed an integrated scanning lane (a VACIS co-
located with a radiation portal monitor) at the Port of Veracruz to
scan all exports.
CBP has the authority to examine all cargo entering the United
States, regardless of mode.
Question 6. As you know, in 2012, there is a 100 percent scanning
requirement for U.S.-board cargo containers. Will the 100 percent
scanning requirement apply to cargo containers destined for Canada and
Mexico ports which are subsequently transshipped by truck and rail to
the United States?
If it doesn't apply, are we creating a loophole that could
potentially be exploited by bad actors? If it does apply, would the
scanning have to be performed in Canadian and Mexican ports?
Answer. Section 1701 of the 9/11 Act (H.R. 1, 110th Congress)
amended the SAFE Port Act and charges DHS with achieving full-scale
implementation of overseas scanning by July 1, 2012, but permits
extensions by certifying to Congress that at least two of the six
conditions outlined in Section 1701(b)(4) apply. The 9/11 Act changed
the dynamic of the ongoing pilot programs from exploring the
feasibility of overseas scanning to developing real, practical
solutions to meet the challenges that arise. These challenges continue
to be significant. The extensions permitted under the law recognize
some of the difficulties that may occur in developing an overseas
scanning strategy, including the impact on trade capacity and the flow
of cargo, whether the systems can be integrated with existing systems,
and the infrastructure restraints of foreign ports. We continue to
refine and develop our expansion approach as we move toward the initial
2012 deadline.
We do not believe any loophole exists with transshipped containers
from Mexico or Canada. Approximately 98 percent of all containers
entering the United States across our land borders are currently
scanned by a RPM device regardless of their original country of origin.
We continue working with our partners in Canada and Mexico to provide
additional layers of security at their seaports as well as at our land
points of entry (POE). In fact, under the Megaports Initiative, DOE is
working with Mexico to equip all four of its major seaports with
radiation detection equipment in order to scan all import and export
traffic arriving/departing Mexico by truck.
Question 7. There has been considerable concern in Congress about
the performance capabilities of Advanced Spectroscopic Portal Monitors
(ASP's) and the FY 2007 DHS Appropriations Act required the Secretary
of DHS to certify a significant increase in operational effectiveness
prior to moving forward with the Administration's proposal for full
scale deployment. Has Secretary Chertoff concluded the additional
testing of the ASP's and provided his certification to Congress? Was
the technology tested in the SFI pilot? If yes, what was the
performance findings of the technology?
Answer. The ASP is currently undergoing integration testing at
Pacific Northwest National Laboratories (PNNL). During this integration
period, the ASP is tested in a mock CBP Port of Entry (POE) to ensure
that the ASP can operate properly with all of CBPs ancillary systems
(i.e., traffic control mechanisms, stop lights, gate arms, etc.). Upon
successful completion of this testing, CBP will conduct a field
validation of the ASP in four high volume POEs; Long Beach, CA, New
York Container Terminal, Detroit, MI, and Laredo, TX. This validation
test will be conducted in the stream of commerce at the Northern land
border, Southern land border and seaport environments to ensure the ASP
is robust enough to operate at CBPs POEs. Upon successful completion of
this test and validation, CBP, jointly with the Domestic Nuclear
Detection Office (DNDO), will recommend certification by the Secretary
of the Department of Homeland Security.
The ASP is currently being tested in the SFI port of Southampton,
U.K. The Department of Energy (DOE) has purchased a limited number of
ASP detection devices and deployed a unit at Southampton as part of an
ongoing effort to gain both operational experience and insight into the
viability of these units as radiation detection/isotope identification
devices in a secondary application. The ASP is undergoing a DOE field
test and is not used for official adjudication of RPM alarms. If a U.S.
bound container generates a radiation alarm at an RPM, it is
subsequently scanned both by the ASP and by a handheld ORTEC (a
radioisotope identification device). The DOE and DNDO are evaluating
the robustness of the ASP, as well as the data transmitted to the
United States.
______
Response to Written Questions Submitted by Hon. Frank. R. Lautenberg to
David Huizenga
Question 1. In your testimony you state that NNSA has installed
over 1,000 RPMs at over 160 sites. Are you procuring and installing
equipment that conforms to the technology performance standards that
the United States has set for domestic scanning equipment?
Answer. DOE and DHS have very similar performance standards for
radiation portal monitors (RPMs). The primary difference is that the
DOE standards are defined in terms of quantities of Special Nuclear
Material (SNM) while DHS standards are defined in terms of surrogate
materials. The advantage of defining standards in terms of surrogate
materials is that these materials are available commercially and RPM
vendors can evaluate their monitors on their own. The disadvantage of
the surrogate materials is there are some slight differences in the
radiation characteristics compared to the SNM they represent. However,
the differences between the standards have been thoroughly evaluated by
DOE and DHS technical staff and are believed to be minor when
evaluating monitor performance.
Question 2. In your testimony you state that the goal of the
Megaports Initiative is to equip approximately 75 priority ports with
scanning technology by 2013, at which point you estimate that you will
be scanning over 50 percent of global shipping traffic. Does this just
cover the radiological detection equipments such as RPM or would this
also include the non-intrusive imaging equipment such as VACIS? What
specific equipment are we talking about here? What do you estimate the
cost to be to the U.S. Government to achieve this goal? What do you
estimate the cost to be to our trading partners? How many international
trade agreements will you have to negotiate to achieve this goal?
Answer. The mission of DOE's Megaports Initiative is to provide
partner nations with passive radiation detection equipment (i.e.,
radiation portal monitors (RPMs and handheld detection equipment),
communications and training and technical support to enhance their
capacity to deter, detect, and interdict illicit trafficking of special
nuclear and other radioactive materials through the global maritime
system. DOE does not provide partner nations with non-intrusive imaging
equipment.
DOE's budget request from FY 09 through FY 13 is $818 million and
supports the installation of radiation detection equipment at a total
of 75 Megaports. The Megaports Initiative is also working with partner
nations to develop cost-sharing agreements. To date, we have agreed to
cost-sharing agreements for ports in Honduras, Israel (two), Colombia,
Panama (multiple), Mexico (multiple), Belgium and Spain (two). Cost-
sharing is a high priority for us and estimates on number of ports that
will cost-share have been and will continue to be incorporated into our
budget planning and requests.
With regard to anticipated costs to our trading partners, one of
the top priorities of the Megaports Initiative is to install our
equipment in a manner that will not interrupt the normal flow of
containers through a port and thus increase costs. When designing an
installation, the Megaports Initiative looks to place monitors at
natural chokepoints, such as entry and exit gates, so that containers
are scanned without deviating from their normal route. For container
traffic that does not move through the gates, such as transshipped
containers, DOE has deployed several new mobile technologies, including
a radiation detection straddle carrier and a Mobile Radiation Detection
and Identification System (MDRIS). DOE is also active in following and
evaluating new technologies closely to determine any areas where
improvements in scanning may be made.
Our partner countries are responsible for staffing the radiation
monitoring systems. In addition, after an initial period when
maintenance costs for the deployment are provided by DOE, the partner
country assumes the cost of maintaining and sustaining the equipment.
These costs vary significantly in terms of the number of monitors
deployed and the labor rates within a country. To date, the average
annual cost of a maintenance contract has been approximately 88K USD
annually and it is assumed the partner country will incur similar costs
when it takes over the maintenance responsibility. The amount of
additional work, and hence the staffing load that a radiation detection
system brings to a port is dependent on several factors. In some cases,
existing staff can easily absorb the amount of additional work. In
other cases, additional personnel are required, perhaps dedicated fully
to operating the SLD-provided equipment. The impact on staffing is
estimated based on operational factors such as number of lanes with
installed radiation detection equipment, amount of traffic, and
expected number of innocent alarms.
DOE has not been involved in any international trade agreements
with regard to the installation of radiation detection equipment.
Typically, DOE signs a Memorandum of Understanding (MOU) or a
Declaration of Principles (DoP) with partner nations to implement the
Megaports Initiative. However, DOE has also pursued other arrangements,
such as letters of exchange or joint press releases, with Pakistan,
Hong Kong, Japan, and the United Kingdom. To date, DOE has signed 24
agreements (MOUs or DoPs) and issued the aforementioned four additional
agreements, representing work commitments at more than 40 seaports
around the world. DOE will continue outreach efforts to negotiate
additional agreements and meet the goal of 75 operational ports by
2013.
Question 3. Is DOE conducting its own testing of the ASP's at the
Nevada Test Site and if so, why? Has DOE purchased or is it planning to
purchase any ASP's and if so where will they be deployed? How many have
been purchased? Why would DOE purchase any before the second round of
testing is complete and the Secretary of DHS has certified to the ASP's
effectiveness?
Answer. DOE has been working closely with DNDO to comprehensively
test the ASP. Specifically, we have participated in Technical Summits
to establish the path forward for the ASP program, conducted a
significant data collection effort at Los Alamos National Laboratory
using special nuclear materials, provided technical experts to perform
data analysis during the current data collection at the Nevada Test
Site, and will continue providing input into future test plans and the
injection studies.
In addition to these activities, DOE has conducted some of its own
testing of the Thermo Fisher ASP at the Los Alamos National Laboratory
(LANL). The scope of this testing is to define the concept of
operations that may be suitable for secondary screening at
international seaports. The scope of the testing is not intended to
duplicate the performance testing being conducted by DNDO but to
supplement DOE's understanding of how best to deploy the equipment.
DOE's Megaports Initiative purchased 12 ASPs from Thermo Fisher
through a DNDO contract in 2006. Due to the potential advantages for
more efficient cargo screening, DOE decided to purchase a limited
number of ASPs to evaluate their performance in operational settings
for secondary inspections. DOE has deployed these units for secondary
inspections both to operational Megaports (Southampton, U.K. and
Antwerp, Belgium) and to the laboratories to gather further data of the
ASPs performance in a variety of settings. Additional units are planned
for installation at Colombo, Sri Lanka, and Manila, Philippines,
Kaohsiung, Taiwan and Port Klang, Malaysia. These systems are currently
operated in tandem with existing secondary screening protocols,
including inspection with handheld radiation isotope identification
devices, until the ASPs have been shown to operate reliably and
effectively in the field.
Overall, DOE has been closely involved in the testing conducted
with DNDO on the ASP and has developed its own test plans to further
evaluate the performance of the ASP. The testing completed by the labs
combined with the data we are receiving from our operational testing
and evaluation of the ASP units we have in the field will provide
valuable technical and operational insight for future deployments. As
we move forward with testing and evaluation, it is our expectation that
we will continue to work closely with our DHS counterparts.
Question 4. I was interested to read about the technology you are
testing for mobile radiological detection platforms on straddle
carriers in the Bahamas. You indicate that over 730,000 containers have
been successfully scanned. Over what time period is that metric based?
Has this technology performed well? And, again, just to clarify, that
is only a radiological scan, not an NII?
Answer. Yes, the radiation detection straddle carrier (RDSC)
deployed in the Bahamas only scans containers for radiation and does
not have a non-intrusive imaging component. The Megaports Initiative
deployed a prototype RDSC to the Bahamas in 2005 for testing. This unit
became officially operational in June 2006. This unit was designed
specifically to address the configuration of the Port of Freeport,
which exclusively uses straddle carriers for moving and stacking cargo
containers, up to three high, around the lay-down yard in rows. To
address this terminal configuration, the Megaports Initiative modified
one standard straddle carrier by stripping it of its lifting mechanisms
and equipping it with both portal monitors, which detect the presence
of radiation, and spectroscopic detectors, which can identify the
source of radiation causing an alarm. The RDSC traverses container
rows, scanning containers stacked in the lay-down yard. The unit is
also equipped with a global positioning system (GPS) and a wireless
communications system to give precise location data and to transmit
information generated from scan to a Central Alarm Station (CAS) where
alarms are assessed and adjudicated by Bahamian Customs Officers.
The unit has performed very well with over 800,000 containers
scanned at the Port of Freeport from June 2006 through August 2008. On
average, the straddle carrier has scanned approximately 85 percent of
containers passing through Freeport. The RDSC has also demonstrated one
solution to the challenge of transshipment containers (i.e., those
containers that move from one ship to another without every passing
through an entry or exit gate) faced by the Megaports Initiative, by
allowing containers to be scanned in the lay-down yard as they await
movement to their next destination. Based on the success of the RSDC,
DOE has recently awarded a commercial contract for the design and
manufacture of additional straddle carrier units, which will be
deployed to other straddle carrier ports in the future. The initial
RDSC produced under the new contract is expected to undergo acceptance
testing in late FY 2009.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Stephen L. Caldwell
Question 1. What are the national policies of Canada and Mexico
with respect to scanning of inbound cargo containers? Does either
Canada or Mexico have scanning requirements to prevent weapons of mass
destruction from entering their ports of entry in cargo containers? If
either nation does have such a requirement, is it stronger or weaker
than the U.S. requirements for the scanning of inbound container cargo?
Answer. While GAO has not performed audit work examining the
national policies of Canada or Mexico with respect to the scanning of
inbound cargo containers, or reviewed whether their requirements are
stronger or weaker than those of the United States, we have some
information on Canada Border Services Agency (CBSA) efforts to prevent
weapons of mass destruction from entering Canada.
Canada employs a risk-management system for identifying high-risk
container cargo bound for Canadian seaports. In particular, CBSA
receives advanced information for all marine vessels destined to arrive
at ports in Canada and uses a system which generates a risk score. This
risk score is then forwarded to Canadian targeters for review. Marine
vessel targeting is divided by risk level, with the National Risk
Assessment Center (which CBSA officials describe as being similar to
the U.S. National Targeting Center) looking for threats for national
security (e.g., weapons of mass destrction and radioactive materials).
Regional targeters focus on contraband, environmental contaminants
(e.g., pine beetles, chemicals, etc.) and other threats. NRAC targeters
review risk scores for each shipment and conduct an in-depth assessment
of the shipments identified as posing a potential national security
threat. If the CBSA officers identify a suspicious shipment, they may
issue a ``do not load'' or ``do not unload'' order and the cargo is
examined either in a foreign port or upon arrival depending on the
nature of the threat.
The Canadian government has also initiated the Partners-in-
Protection (PIP) program to enlist the cooperation of companies
involved in interational commerce in enhancing border security,
combating terrorism, and helping to detect and prevent contraband
smuggling. Participating companies sign a Memorandum of Understanding
with CBSA, which focuses on the security of the trading companies'
cross-border operations (particularly the security of its supply
chain), information exchanges, and joint training activities. This
program is similar to the U.S. Customs-Trade Partnership Against
Terrorism (C-TPAT) program. Additionally, since 2001, the Canadian
government has deployed new inspection equipment, such as Vehicle and
Cargo Inspection System (VACIS) machines and x-ray scan trailers. In a
2005 report, CBSA anticipated that it would have the capacity to
conduct radiation checks on almost all marine containers arriving at
the ports of St. John, Halifax, Montreal and Vancouver which together
receive nearly all container traffic arriving at Canada's marine ports
of entry.
Question 2. At present, do cargo containers unloaded off ships in
Canadian and Mexican ports, get transshipped by rail and truck to final
destinations in the United States? Currently, what is the level of
cooperation and coordination between U.S. and Canadian authorities and
U.S. and Mexican authorities to ensure that these transshipped U.S.-
bound cargo containers do not present a significant risk for weapons of
mass destruction? Do Customs and Border Protection and NMSA need
additional authority in this area, for example with respect to
international freight rail crossing at the U.S. border?
Answer. While GAO has not reviewed cargo container operations at
Mexican seaports, based on prior audit work we know that some container
cargo arriving at Canadian seaports is transported to the United
States. For example, on a visit to the Port of Halifax, Nova Scotia in
2006, CBSA officials told us that a portion of the container cargo
arriving at the port is loaded on to trains for delivery to the United
States. Regarding coordination efforts to ensure that this cargo bound
for the United States does not pose a security risk, U.S. Customs and
Border Protection (CBP) deploys targeters to ports in Vancouver,
Montreal, and Halifax as part of the Container Security Initiative
(CSI). These targeters review automated targeting system (ATS)
information and work with CBSA officials to identify containers that
may pose a security risk. Similarly, Canadian targeters located at the
ports in Newark and Seattle review marine containers arriving at U.S.
ports destined for Canada by rail or by truck. At these U.S. seaports,
CBP officials assess all shipments for national security threats, while
Canadian targeters concentrate on identifying contraband smuggling. If
the Canadian targeters wish to refer a container for examination, they
submit a formal request to U.S. authorities to conduct the examination
at the port of entry.
GAO has not performaed any audit work regarding the issue of
whether CBP and NMSA need additonal authority regarding transshipped
rail cargo bound for the United States. We leave it up to those
respective agencies to comment on whether they believe their current
authority is sufficient.
Question 3. As you know, in 2012 there is 100 percent scanning
requirement for U.S.-bound cargo containers. Will the 100 percent
scanning requirement apply to cargo containers destined for Canada and
Mexico ports which are subsequently transshipped by truck and rail to
the United States? If it doesn't apply, are we creating a loophole that
could potentially be exploited by bad actors? If it does apply, would
the scanning have to he performed in Canadian and Mexican ports?
Answer. The statutory requirement for 100 percent scanning does not
expressly include or exclude cargo containers destined for Canadian or
Mexican ports which are subsequently transshipped by truck or rail to
the United States.\1\ In our audit work to date, we have not obtained
an official position from CBP as to whether it intends to apply the 100
percent scanning requirements to such cargo containers. As our audit
work continues, we will continue to seek an official position from CBP.
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\1\ See Section 1701(a) of the Implementing Recommendations of the
9/11 Commission Act of 2007 (Pub. L. No. 110-53, 1701(a), 121 Stat.
266,489-90).
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This issue is particularly important since Canada has recently
expanded some of its seaports with the intent to then ship containers
into the United States over land borders. These include the expansion
of the seaport in Vancouver and the building of a new container
terminal in Prince Rupert at a cost of approximately one billion U.S.
dollars. However, CBP does receive advanced information for cargo that
arrives in Canada via ship and is then transported to the United States
via rail. Two rail carriers, CN and CP, carry such containers to the
United States and both are C-TPAT approved carriers. Rail carriers
transmit electronic data to CBP 2 hours in advance of the cargo's
arrival at the U.S./Canadian border. CBP officers assess the cargo data
and determine whether a threat exists. If they determine it is a risk
or threat, they will place a ``hold'' on the container for the carrier
with instructions to ``set out'' the container for examination. When
the train arrives at the border, CBP conducts VACIS inspection of all
cars on the train.