[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
BALANCING MARITIME SECURITY AND TRADE
FACILITATION: PROTECTING OUR PORTS,
INCREASING COMMERCE AND SECURING THE SUPPLY CHAIN--PART I
=======================================================================
HEARING
before the
SUBCOMMITTEE ON BORDER AND
MARITIME SECURITY
of the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
FEBRUARY 7, 2012
__________
Serial No. 112-65
__________
Printed for the use of the Committee on Homeland Security
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COMMITTEE ON HOMELAND SECURITY
Peter T. King, New York, Chairman
Lamar Smith, Texas Bennie G. Thompson, Mississippi
Daniel E. Lungren, California Loretta Sanchez, California
Mike Rogers, Alabama Sheila Jackson Lee, Texas
Michael T. McCaul, Texas Henry Cuellar, Texas
Gus M. Bilirakis, Florida Yvette D. Clarke, New York
Paul C. Broun, Georgia Laura Richardson, California
Candice S. Miller, Michigan Danny K. Davis, Illinois
Tim Walberg, Michigan Brian Higgins, New York
Chip Cravaack, Minnesota Jackie Speier, California
Joe Walsh, Illinois Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania Hansen Clarke, Michigan
Ben Quayle, Arizona William R. Keating, Massachusetts
Scott Rigell, Virginia Kathleen C. Hochul, New York
Billy Long, Missouri Janice Hahn, California
Jeff Duncan, South Carolina
Tom Marino, Pennsylvania
Blake Farenthold, Texas
Robert L. Turner, New York
Michael J. Russell, Staff Director/Chief Counsel
Kerry Ann Watkins, Senior Policy Director
Michael S. Twinchek, Chief Clerk
I. Lanier Avant, Minority Staff Director
------
SUBCOMMITTEE ON BORDER AND MARITIME SECURITY
Candice S. Miller, Michigan, Chairwoman
Mike Rogers, Alabama Henry Cuellar, Texas
Michael T. McCaul, Texas Loretta Sanchez, California
Paul C. Broun, Georgia Sheila Jackson Lee, Texas
Ben Quayle, Arizona, Vice Chair Brian Higgins, New York
Scott Rigell, Virginia Hansen Clarke, Michigan
Jeff Duncan, South Carolina Bennie G. Thompson, Mississippi
Peter T. King, New York (Ex (Ex Officio)
Officio)
Paul Anstine, Staff Director
Diana Bergwin, Subcommittee Clerk
Alison Northrop, Minority Subcommittee Director
C O N T E N T S
----------
Page
STATEMENTS
The Honorable Candice S. Miller, a Representative in Congress
From the State of Michigan, and Chairwoman, Subcommittee on
Border and Maritime Security:
Oral Statement................................................. 1
Prepared Statement............................................. 4
The Honorable Henry Cuellar, a Representative in Congress From
the State of Texas, and Ranking Member, Subcommittee on Border
and Maritime Security.......................................... 5
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Ranking Member, Committee on
Homeland Security.............................................. 6
The Honorable Laura Richardson, a Representative in Congress From
the State of California:
Prepared Statement............................................. 7
WITNESSES
Panel I
The Honorable Jerrold Nadler, a Representative in Congress From
the State of New York.......................................... 9
Panel II
Mr. David Heyman, Assistant Secretary, Office of Policy, U.S.
Department of Homeland Security:
Oral Statement................................................. 12
Joint Prepared Statement....................................... 14
Mr. Kevin McAleenan, Acting Assistant Commissioner, Office of
Field Operations, U.S. Customs and Border Protection, U.S.
Department of Homeland Security:
Oral Statement................................................. 21
Joint Prepared Statement....................................... 14
Rear Admiral Paul Zukunft, Assistant Commandant for Marine
Safety, Security, and Stewardship, U.S. Coast Guard, U.S.
Department of Homeland Security:
Oral Statement................................................. 23
Joint Prepared Statement....................................... 14
Mr. Stephen L. Caldwell, Director, Maritime and Coast Guard
Issues, Homeland Security and Justice Team, Government
Accountability Office:
Oral Statement................................................. 25
Prepared Statement............................................. 26
APPENDIX
Questions for David Heyman From Chairwoman Candice S. Miller..... 61
Questions for David Heyman From Honorable Mike Rogers............ 62
Questions for Paul F. Zukunft From Honorable Mike Rogers......... 62
Questions for Kevin K. McAleenan From Chairwoman Candice S.
Miller......................................................... 63
Questions for Stephen L. Caldwell From Chairwoman Candice S.
Miller......................................................... 66
Questions for Stephen L. Caldwell From Honorable Mike Rogers..... 70
BALANCING MARITIME SECURITY AND TRADE FACILITATION: PROTECTING OUR
PORTS, INCREASING COMMERCE AND SECURING THE SUPPLY CHAIN--PART I
----------
Tuesday, February 7, 2012
U.S. House of Representatives,
Committee on Homeland Security,
Subcommittee on Border and Maritime Security,
Washington, DC.
The subcommittee met, pursuant to call, at 10:03 a.m., in
Room 311, Cannon House Office Building, Hon. Candice S. Miller
[Chairwoman of the subcommittee] presiding.
Present: Representatives Miller, Broun, Duncan, Cuellar,
Sanchez, Jackson Lee, Clarke of Michigan, and Thompson.
Also present: Representatives Richardson and Hahn.
Mrs. Miller. Good morning, everybody. The Committee on
Homeland Security, the Subcommittee on Border and Maritime
Security will come to order.
The subcommittee is meeting today to hear testimony from
Congressman Jerry Nadler, from assistant secretary David
Heyman, from Department of Homeland Security Office of Policy,
acting assistant commissioner Kevin McAleenan, Office of Field
Operations, Customs and Border Protection, Rear Admiral Paul
Zukunft--I know I am never pronouncing that correctly,
assistant commandant for marine safety, security, and
stewardship with the U.S. Coast Guard, and Mr. Steve Caldwell,
who is the director of Maritime Security from GAO.
Today our very important topic is the global supply chain.
I would recognize myself for an opening statement.
This hearing is really the first of a two-part series. We
are going to have another follow-on hearing as well. We are
going to examine the Nation's maritime and global supply chain
security measures.
Last year, this subcommittee focused on security at the
Southern and the Northern Border, both at and between the ports
of entry. But I think it is important as well to remember that
we really have three borders.
The Nation's maritime border is certainly just as important
as the other two. It is a conduit for much of the country's
trade. Commerce, of course, is the life blood of the Nation.
After September 11, we in the Congress rightly recognized
the importance of securing our Nation's ports and the cargo
that transits from overseas to our stores and our shops here on
a daily basis.
I have actually had the opportunity recently really to
visit some of our Nation's largest ports and see first-hand the
hard work that the men and women of Customs and Border
Protection and the United States Coast Guard do to help secure
our Nation.
However, it is certainly clear that more work needs to be
done. Whether it comes into our ports or travels by truck,
coming through Laredo or El Paso or what have you, or coming
across from a train from Canadian border, we have to always
make sure that we understand the risk posed by cargo shipment
in order to secure the entire global supply chain.
The logistics involved in moving goods across the global
supply chain are incredibly complex. Security solutions we
propose should be cognizant of that reality.
Today's hearing will examine how we balance maritime
security and the safeguarding of our supply chains with the
need to facilitate trade and not place an undue burden on a
flow of goods that is so vital to our way of life.
Delays to shipping can cost billions of dollars to our
economy. Balancing security and facilitating commerce is not an
easy thing. But risk-based systems and trusted trade programs
can help separate companies who play by the rules and make
extra efforts, allowing the Customs and Border Protection to
focus on less-secure shipments.
We need to make sure that we push our borders out by
conducting as much of CBP's cargo inspection and screening work
before potentially dangerous cargo arrives on our shores.
We can and we must do a better job of leveraging the work
of our trusted allies to help screen and, when necessary,
either scan or inspect high-risk cargo. It is no secret that
our Nation faces a difficult financial situation. We are always
going to have limited taxpayer dollars.
That requires that the Government make smart decisions to
use those resources in the most effective and efficient
possible manner. We should be under no illusion that we can
eliminate every single risk, certainly, that terrorists pose to
the Nation, and that all we need to do is just to spend more to
make that risk completely disappear.
A clear-eyed assessment of risk should inform how we
allocate scarce Homeland Security dollars as well.
I think this is especially important to remember when
considering the 9/11 Act, which mandated 100 percent
screening--or excuse me, scanning of cargo prior to it arriving
in America.
Certainly that is a very, very worthwhile goal. That should
be our goal.
However, we have to look at how we implement this law,
whether it is possible, the potential costs, and the benefits
as well.
We currently scan 4 to 5 percent of all containerized cargo
entering the country, based upon the National Targeting
Center's data screening system and the current threat
environment.
It is certainly far from clear that the investment required
to scan the rest of the 95 percent of the cargo is possible, is
wise. Again, we are going to be talking about based on risk; is
it grounded in a proper understanding of the threat posed by
containerized cargo?
The Secretary, herself, of the Department of Homeland
Security has mentioned on numerous occasions, including in
front of this committee, on a number of times that she wants to
work with the Congress to modify this requirement. So I would
say certainly I stand, and I know this committee stands ready
to work with her.
We are waiting for her legislative proposal that will help
move the country into a more risk-based system, as the
Secretary has been saying now for over 2 years.
As part of our discussion today, I am eager to hear the
witnesses' thoughts on the Customs Trade Partnership Against
Terrorism, the C-TPAT Program. The private sector has a role to
play in helping to secure their supply chains.
I think it is important to spend Customs and Border
Protection officers' time on shippers of concern, rather than
on trusted embedded companies, who are willing to make security
enhancements. C-TPAT, you know, I think is a wonderful example,
that program, of how Government and the private sector can
really partner together to help increase security and ensure
the smooth flow of goods.
We want to explore ways to improve and expand this program
to additional companies that are willing to improve the
security of the supply chain.
Then finally, I would like to note that the SAFE Port Act
of 2006 calls for a global supply chain strategy to be
released. This requirement came due in October 2009, but
actually was not released until just a few days ago--excuse me,
a few weeks ago.
I think it is interesting to note that many times this
subcommittee has been having hearings on particular issues, and
then the agency, the Department responds, which I think is a
very good thing. In fact, we held a hearing in July on maritime
cooperation; and then the Department released their Maritime
Coordination Plan, right at that time.
Then we held a hearing on visa security in September; and
the Department released an announcement on visa security on the
day of our subcommittee hearing. So I don't know if it is
serendipity or what, but I think it is great.
The Congress is doing its job on oversight. The agencies
are responding. I think that tells us that this subcommittee is
focused on the right issues, matters of security for our Nation
as well.
However, I will mention that even though we just received
this a couple of weeks ago, the document that was produced by
the White House, it is only 6 pages long. The first page was an
executive summary.
So I am certainly looking forward to hearing the
Department's plans on the implementation details, and their
complete vision on a strategy that will help us better secure
the supply chain.
With that, I would also like to recognize now the Ranking
Member of the subcommittee, gentleman from Texas, Mr. Cuellar,
for his opening remarks.
[The statement of Chairwoman Miller follows:]
Statement of Chairman Candice S. Miller
February 7, 2012
This hearing is the first of a two-part series that will examine
the Nation's maritime and global supply chain security measures.
Last year this subcommittee focused on security at the Southern and
Northern Border, both at and between the ports of entry, but I think it
is important to remember that we have three borders. The Nation's
maritime border is just as important as the other two, and is the
conduit for much of the country's trade. Commerce is the life-blood of
the Nation, and after September 11 we in Congress rightly recognized
the importance of securing our Nation's ports and the cargo that
transits from overseas to our stores on a daily basis.
I recently had the opportunity to visit some of our Nation's
largest ports and saw first-hand the hard work that the men and women
of Customs and Border Protection and the U.S. Coast Guard do to help
secure the Nation--however it is clear that more work needs to be done.
Whether it comes into the ports of Los Angeles and Long Beach,
travels by truck through Laredo or on a train across the Canadian
Border, we must correctly gauge the risk posed by cargo shipments in
order to secure the entire global supply chain. The logistics involved
in moving goods across the global supply chain is incredibly complex--
security solutions we propose should be cognizant of that reality.
Today's hearing will examine how we balance maritime security and
the safeguarding of our supply chains with the need to facilitate trade
and not place an undue burden on the flow of goods that is vital to our
way of life. Delays to shipping can cost billions of dollars to our
economy. Balancing security and facilitating commerce is not an easy
task, but risk-based systems and trusted trade programs can help
separate companies who play by the rules and make extra efforts--
allowing Customs and Border Protection to focus on less secure
shipments.
A disruption or attack at one of our Nation's largest ports could
be catastrophic, and we need to make sure we ``push the borders out''
by conducting as much of CBP's cargo inspection and screening work
before potentially dangerous cargo arrives on U.S. shores. We can and
must do a better job of leveraging the work of our trusted allies to
help screen, and when necessary, scan or inspect high-risk cargo.
It is no secret that the Nation faces a difficult financial
situation--we will always have limited taxpayer dollars and that
requires that the Government make smart decisions to use those
resources in the most effective and efficient manner possible. We
should be under no illusion that we can eliminate every single last
ounce of risk that terrorists pose to the Nation and that all is needed
is to spend more to make that risk completely disappear. A clear-eyed
and sober assessment of risk should inform how we allocate scarce
homeland security dollars--we just don't have the resources to do it
any other way.
I think this is especially important to remember when considering
the 9/11 Act, which mandated 100% scanning of cargo prior to it
arriving in America. Let me be clear--I think this is a worthwhile
goal; however, we must look at the impediments to the implementation of
this law, such as potential costs and benefits. We currently scan 4-5
percent of all containerized cargo entering the country based upon the
National Targeting Center's data screening system and current the
threat environment. It is far from clear that the investment required
to scan the rest of the 95% of cargo is wise, is based on risk, or is
grounded in a proper understanding of the threat posed by containerized
cargo.
The Secretary herself has mentioned on numerous occasions,
including in front of this committee that she wants to work with the
Congress to modify this onerous requirement. Today, I stand ready to
work with her, and I await her legislative proposal that will help move
the country into a more risk-based system, as the Secretary has been
saying for almost 2 years.
As part of our discussion today, I am eager to hear the witnesses'
thoughts on the Customs Trade Partnership Against Terrorism (the C-TPAT
program). The private sector has a role to play in helping to secure
their supply chains, and I think it is important to spend Customs and
Border Protection officer's time on shippers of concern, rather than on
trusted and vetted companies who are willing to make security
enhancements. C-TPAT is an example of how Government and the private
sector can partner together to help increase security and ensure the
smooth flow of goods. I want to explore ways to improve and expand this
program to additional companies that are willing to improve the
security of the supply chain.
Finally, I would like to note that the SAFE Port Act of 2006 called
for a global supply chain strategy to be released. This requirement
came due in October 2009 but was not released until just a few weeks
ago. I am disappointed that this document produced by the White House
provided little more than high-level concepts and did not articulate a
tangible path forward. More than 27 months late and a grand total of 6
pages; it is nothing short of an embarrassment. Is this really the best
we could do? I look forward to hearing DHS' plans on the implementation
details and their complete vision for this strategy can lead to a more
secure supply chain.
Mr. Cuellar. Thank you so much, Madam Chairwoman, for
holding this meeting.
Also I would like to recognize our Ranking Member of the
full committee. Again, thank you for holding this meeting.
Madam Chairwoman, before I move forward with a statement, I
would ask for unanimous consent to allow the gentle lady from
California, Ms. Richardson and Ms. Hahn, both from California,
to sit and question the witnesses in today's hearing.
Mrs. Miller. Without objection.
Mr. Cuellar. Thank you so much.
As you know, this subcommittee has previously examined
cargo security and facilitation issues at our land borders.
Some of our Nation's busiest land ports of entry are located in
my Congressional district, making supply chain security and
facilitation of legitimate commerce a key issue for me and my
constituents.
I know this issue is of great importance to the gentle lady
from Michigan as well, given her district along the Northern
Border. I appreciate all the work that she has done there to
make sure we facilitate finding the balance between security
and, of course, commerce moving as quickly as possible.
Today, we are examining another important part, which is
the maritime cargo security, that have certain parallels.
Indeed, the fundamental issue is the same: How can we
expedite legitimate cargo to its destination, while keeping
possible terrorist instruments or contraband from entering the
United States? Given the volume of cargo crossing and entering
this country every day, this is no easy task for DHS and its
settled partners.
We are hearing testimony today regarding DHS programs and
initiatives to secure maritime cargo, through programs such as
the Container Security Initiative, Secure Freight Initiative,
and the C-TPAT.
I have also had the opportunity to visit a TSI port with
Mr. Thompson. I have also been to the National Targeting
Center, where much of the Customs and Border Protection cargo
security work is done.
While I appreciate the hard work of the men and women of
CBP and their DHS colleagues on this challenging issue, more
remains to be done. Many of the cargo security programs have
grown stagnant in recent years, in part due to lack of adequate
funding.
Many of those programs are carried out by CBP officers who
are in short supply. We have greatly expanded the ranks of the
Border Patrol, the men and women in green, since September 11,
2001. But we have not kept pace with the CBP officers, the men
and women in blue.
We need to do better to make sure that we get the men and
women in blue, because those are the ones that man our
airports, our seaports, and our land ports. Without adequate
personnel, our sea, land, and airport security and facilitation
will both suffer.
Finally, I would like to bring also the issue that Madam
Chairwoman also brought up, which is my dismay at the recently
released, long-overdue National Security and Supply Chain
Security. This was due in 2009. It just got released this last
month, in January.
Again, not that weight counts or number of pages counts,
but 6 pages I think is not sufficient for such a very important
issue that we have here. I am hoping that we will get a little
bit more substance from the administration on the path forward
for supply chain security and facilitation.
I know we can do better than this. It is my hope that the
witnesses today will be able to speak to DHS' vision for its
role in this very important mission.
I thank the witnesses for joining us here today. I look
forward to your testimony.
With that, Madam Chairwoman, I yield back the balance of my
time.
Mrs. Miller. Thank the gentleman.
The Chairwoman now recognizes the Ranking Member of the
full committee, the gentleman from Mississippi, Mr. Thompson.
Mr. Thompson. Thank you very much, Madam Chairwoman. I
appreciate you calling this hearing. I appreciate our witnesses
for their participation also.
Today's hearing comes at a critical juncture in the
Department of Homeland Security's efforts to secure maritime
cargo entering our Nation's ports. Later this year, July 12,
2012, marks the deadline for achieving 100 percent scanning of
maritime cargo before it arrives in the United States, pursuant
to the implementation recommendation of the 9/11 Commission Act
2007.
In other words, the law requires all U.S.-bound cargo be
scanned either through non-intrusive scanning machines, or
receive a physical examination. Today, it is widely
acknowledged that DHS will not meet this deadline.
I am a pragmatic person. I was a proponent of 100 percent
scanning mandate, but understood that fulfilling the
requirements would be no easy task. However, those of us who
supported the provision hoped to spur significant advances in
cargo security by this point, even if the initial 2012 deadline
was not met.
Instead, in the nearly 5 years since the law was enacted,
DHS has failed to make an honest effort to implement the
mandate. We have heard a litany of reasons that 100 percent
scanning cannot or should not be done.
In testimony before this committee, Secretary Napolitano
expressed opposition to the mandate, indicating that the 100
percent requirement is not achievable by 2012, and instead
advocating for a risk-based approach to maritime cargo
security.
Of course, the surest way to fail is not to try at all.
Equally troubling is the fact that in recent years, some of
DHS' existing cargo security programs have become stagnant or
have been scaled back.
For example, the Container Security Initiative, CSI, is
operational in the same 58 ports that were active before the
enactment of the 9/11 Act. Over the past 5 years, CSI has not
been expanded, despite the fact that at least 700 ports ships
goods to the United States. The number of overseas personnel
deployed to the 58 ports has plummeted.
Specifically, in 2009, there were 167 CSI officers at
overseas ports. Today, there are only 79. Similarly, while a
few years go, the Secure Freighter Initiative included six
ports, today, the program has reduced to a single low-volume
port.
Last month, the administration released a long-awaited
``National Strategy for Global Supply Chain Security.'' You
have heard my Ranking Member talk about the size of this 6-page
document. It is hard to see how this document could offer a
comprehensive blueprint for enhancing the security of the
supply chain, especially given the enormity of the task and the
number of stakeholders involved.
Nevertheless, I expect to hear testimony today from DHS
witnesses about how successful the Department has been at
creating programs to ensure that shippers can be trusted,
manifest, or analyzed, and ports are protected. These programs
play an important role in maritime security.
However, they do not take the place of having an active
partnership, where CBP personnel work with their foreign
counterparts in overseas ports to examine high-risk cargo
containers before they arrive in U.S. ports.
After all, what good is identifying a high-risk container
if it doesn't get examined until it has arrived in the Ports of
New York, Houston, Los Angeles, New Orleans or any of the other
hundreds of ports across America?
By then, it very well may be too late.
I hope to hear from our witnesses today not only about the
successes, but also about what remains to be done to secure
maritime cargo, and how we can get there. Meaningful homeland
security will only be achieved when we know who and what is
coming into this country, not only by air and land but also by
sea.
I thank the witnesses for joining us today, Madam
Chairwoman. I look forward to their testimony.
Mrs. Miller. Thank the gentleman.
I would remind all the other committee Members as well that
opening statements that you may have can be submitted for the
record.
[The statement of Hon. Richardson follows:]
Statement of Hon. Laura Richardson
February 7, 2012
I would like to thank Chairwoman Miller and Ranking Member Cuellar
for allowing me to participate in today's subcommittee hearing. I look
forward to hearing from our distinguished panel of witness on how we
can increase commerce through our ports, while protecting our ports
against a terrorist attack. I am particularly interested in hearing how
the Department of Homeland Security will address the law that requires
100 percent of containers be scanned prior to arrival in the United
States by July 12, 2012.
After the terrorist attacks on September 11, 2001, the 9/11
Commission was established to help protect our country against future
attacks. One of the Commission's recommendations was that all cargo
containers be scanned prior to being loaded on a vessel bound for the
United States. The Implementing Recommendations of the 9/11 Commission
was signed into law on August 3, 2007. This law required that the
Secretary of Homeland Security meet the mandate of 100 percent
container scanning by July 12, 2012, unless the Secretary extends the
deadline by certifying that it is currently not feasible.
Unfortunately, DHS has made little effort in meeting this mandate.
I have consistently raised this extremely important National security
issue with the Department of Homeland Security.
At a full Homeland Security Committee hearing on February
25, 2010, I questioned Secretary Napolitano on the Department's
progress towards the 100 percent container screening mandate.
On June 16, 2010, as Chairwoman of the Subcommittee on
Emergency Communications, Preparedness, and Response, I and the
other Homeland Security Committee chairs sent a letter to
Secretary Napolitano regarding the Department's policy and
efforts to meet the 2012 deadline.
At a full Homeland Security Committee hearing on March 3,
2011, I again questioned Secretary Napolitano on the 100
percent container screening law. The Secretary responded that
the 100 percent mandate was constructed at a time before there
was a mature understanding of what the possibilities were in
the maritime cargo security and that the Department was working
on an entire ``global cargo security initiative'' that involves
the International Maritime Organization, the International
Aviation Organization, and the World Customs Organization.
The Department of Homeland Security has given multiple reasons why
the 100 percent container screening requirement will not be met. We
have heard that the technology is not available, the costs of
implementing the requirement is too high, it would cause delays in the
global chain, there is not buy-in from foreign partners, and that the
DHS is moving towards only screening 100 percent of high-risk
containers. However, I am very concerned that DHS has not conducted any
studies on the feasibility of meeting the 100 percent container
screening mandate. DHS has also scaled back its maritime cargo security
programs and reduced the number of personnel at overseas ports. I am
also concerned that DHS has not made any efforts towards improving
container screening, and will continue to extend the 100 percent
container screening deadline without demonstrating a good faith effort
in meeting the law's requirements.
Once cargo reaches our ports, it could be too late to prevent a
catastrophic terrorist attack. The Port of Long Beach and the Port of
Los Angeles are not only important to my district, but are also
important to the U.S. and global economy. A nuclear or radiological
bomb that detonated in the Port of Long Beach or the Port of Los
Angeles would result in thousands of deaths and cripple our economy. We
need to ensure that 100 percent of cargo that enters our ports is
screened before they arrive.
In May 2011, I visited the Port City of Kaohsiung in Taiwan. I
personally observed the screening process at this port. Kaohsiung
screens 100 percent of containers prior to the being shipped to the
United States. Suspicious cargo receives additional screening until it
is cleared or removed for further investigation. We need to work with
other countries to ensure this is happening before cargo is shipped to
our U.S. ports.
A successful terrorist attack on one of our ports, such as the Port
of Los Angeles or the Port of Long Beach would have a devastating
economic impact and severely impact the global supply chain. The cost
of one terrorist attack in our ports would far surpass the costs of
instituting the 100 percent container scanning that is required by law
and was recommended by the 9/11 Commission.
We have been extremely fortunate that an attack has not yet
occurred in our ports. I was disappointed that the administration's
National Strategy for Global Supply Chain Security did not address
container scanning. As a Member of the Homeland Security Committee, I
will continue to fight for the safety of our Nation's ports. Congress
and the 9/11 Commission has made it clear that 100 percent container
scanning is vital to our National security interests.
Again, I thank Chairwoman Candice Miller and Ranking Member Cuellar
for allowing me to attend today's hearing. Port security is a top
homeland security priority for me. I look forward from hearing from our
DHS witnesses on what is being done to protect our ports against a
terrorist attack. I also want to hear what is being done to ensure the
safety of the containers that pass through our Nation's ports.
I yield back the balance of my time.
We are pleased to have two distinguished panels.
But our first panel is Congressman Jerry Nadler, who joins
us today. We appreciate you, sir, coming. He represents the 8th
District of New York, which includes much of the west side of
Manhattan, the financial district, and a number of diverse
neighborhoods in southwestern Brooklyn.
He began his political career in 1976 in the New York State
Assembly, where he served for 16 years. Then in 1992, he was
elected to the U.S. House of Representatives in a special
election, has been here ever since.
With that, the floor is yours, sir. Again, we appreciate
you taking time to give us your testimony and insight on this
issue today.
STATEMENT OF HON. JERROLD NADLER, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW YORK
Mr. Nadler. Thank you very much, Chairwoman Miller, Ranking
Member Cuellar, Ranking Member Thompson, Members of the
subcommittee.
Thank you for inviting me to testify today on the issue of
maritime security and trade facilitation. I speak to you today
not as a maritime cargo security expert, but as a Member of
Congress who has long advocated that we as a Nation must do a
better job of ensuring the security of the cargo arriving on
our shores every day.
As representative from New York's 8th District. I have the
honor of representing portions of Manhattan and Brooklyn. The
World Trade Center site is located in my district, as is much
of the Port of New York and New Jersey, the largest port on the
East Coast.
As such, I believe my district stands as an example of why
we need to secure our Nation, including our ports and
waterways, while also ensuring the flow of legitimate commerce.
As you might recall, I was the principal author of many of
the port provisions of the implementing recommendations of the
9/11 Commission Act of 2007. I worked closely with Chairman
Thompson, then Chairman Oberstar, and Representative Ed Markey
to push for inclusion of the 100 percent scanning provision
into this measure.
We were successful. Section 1701 of that act states that by
July 12, 2012, all cargo containers must be scanned by non-
intrusive imaging equipment and radiation detection technology
before being loaded on a vessel bound for the United States,
unless the Secretary of Homeland Security extends the deadline
by certifying it is not currently feasible.
In short, this provision requires scanning of all maritime
cargo containers before they arrive in this country. We
understood that we must not wait to impose security measures
until containers reach the United States.
Scanning containers in the U.S. port is not sufficient. If
there is a nuclear bomb inside a container and it is detected
by radiation portal monitors in Newark or Miami or Los Angeles,
it may very well be too late.
Reading the cargo manifests is not enough. Trusting certain
shippers is not enough. We must verify the contents of the
containers at the point of origin, before they are loaded on a
ship bound for America.
So the law is designed to do just that.
When I introduced a free-standing bill on this topic, and
later pushed for inclusion of these provisions in the 9/11 Act,
I understood that achieving 100 percent maritime cargo scanning
mandate would be neither easy nor cheap.
But I was also aware of the human and economic toll of a
potential terrorist attack on our soil. The New York
Metropolitan Area is home to approximately 19 million people.
The effects of a weapon of mass destruction or a dirty bomb at
the Port of New York or New Jersey would be catastrophic.
Similarly, several of the Nation's other major ports are
located near populations--in fact, all of them are located near
population centers, and might also make attractive targets for
terrorists. This threat is not exclusive to major metropolitan
areas, however.
There are currently approximately 360 commercial sea and
river ports throughout the United States, making this issue of
concern to communities across the country.
Aside from the potential human costs, the economic costs of
a maritime terrorist attack would be devastating. Maritime
ports are a vital component of the supply chain, moving the
overwhelming majority of cargo into and out of the United
States, 99.4 percent by weight, and 64 percent by value, at a
value of $3.8 billion each day.
In 2010, the dollar value of cargo that moved the Port of
New York and New Jersey alone is more than $175 billion.
Anything that threatens this flow of commerce would not only
affect the ports themselves, but would also disrupt the supply
chain, with widespread effects across the country and around
the world.
I might add here, parenthetically, that when I first
introduced the legislation, someone said to me that demanding
100 percent scanning might slow the flow of commerce. I replied
that one nuclear bomb going off in an American port would
eliminate the flow of commerce for a good long time.
Given the very serious nature of the threat we face, I am
dismayed that the Department of Homeland Security has not made
a realistic effort to implement the 100 percent scanning
mandate. Nor has it offered an alternative proposal to achieve
the same ends.
I am aware that that Department opposed the original
legislation, has never thought that this was a good idea. But
it must make a realistic attempt to implement the will of
Congress.
I urge DHS to aggressively more forward in implementing the
100 percent maritime cargo scanning mandate. It is one thing to
say we cannot achieve this goal this year. It is yet another to
declare that the goal itself is not worth pursuing, which
unfortunately is something I have heard said.
That would be an enormous mistake. We must continue to take
steps toward 100 percent scanning as the ultimate goal. We must
not relent in our pursuit of security.
We must not allow gaping holes in our system to go
unaddressed. Remember what is at stake here. It seems absurd
that we would even entertain the notion that we would perhaps
allow a nuclear weapon to be smuggled into our country on board
a container that has never been scanned, when we know that if
detonated in one of our cities, it would kill millions of
people in a deadly flash.
Now it is obvious that the initial statutory deadline this
year will not be achieved. However, we can and must make
incremental progress that will ultimately get us to the 100
percent standard, while making cargo, our ports and waterways,
the American people, more secure in the interim.
We owe the American people no less.
I thank the subcommittee for inviting me to participate in
today's hearing. I look forward to continuing to work with my
colleagues, the Department of Homeland Security, and other
Federal, State, and local agencies, and private stakeholders,
on this very important issue.
Mrs. Miller. Thank you very much, Congressman. We certainly
appreciate, again, you taking the time.
We are going to dismiss you and ask for the next panel to
come. But I had a chance to talk to you before we started. I
recognize certainly your passion on this issue.
That really is going to be the--that was the impetus and
will be the crux of all of our questions today, as we can
either achieve the mandate of Congress, or if not, as you say,
a realistic way to implement, and where we are going with all
of this as well.
So it is going to be an interesting hearing.
Mr. Nadler. Thank you very much.
Mrs. Miller. Thank you.
Mr. Cuellar. Also, Mr. Nadler, I would say, if Madam
Chair----
Mrs. Miller. Certainly.
Mr. Cuellar. Just I have no questions, but also I know you
worked very hard with Mr. Thompson on this. So I appreciate all
the hard work that you put in on this. I appreciate your good
work. Thank you.
Mr. Nadler. Thank you, too.
Mrs. Miller. Thank you.
We all ask the second panel to come forward.
You are all suited up, ready to go here. I think what I
will do is just for our panel--and we are looking forward to
all your testimony. I will just introduce you all sort of at
once. Then we all start with Mr. Heyman.
But let me read your bios a bit here. We are first
delighted to have David Heyman, excuse me, assistant secretary
for policy at the United States Department of Homeland
Security. Previously, he served as the senior fellow and
director at the CSIS Homeland Security Program, where he led
the research and program activities in homeland security,
focusing on developing the strategies and policies to help
build and transform the United States' Federal, State, local,
and private sector homeland security institutions.
Kevin McAleenan--how do you pronounce it? McAleenan, okay,
got it--is the acting assistant commissioner at the Office of
Field Operations, Customs and Border Protection. Mr. McAleenan
is responsible for overseeing CBP's anti-terrorism,
immigration, anti-smuggling, trade compliance, and agricultural
protection operations at 20 major field offices, 331 ports of
entry, and over 70 locations in over 40 countries
internationally, with a staff of more than 28,000 employees and
an operating budget of over $3.5 billion.
Rear Admiral Paul Zukunft is the assistant commandant for
marine safety, security, and stewardship, and responsible for
developing National marine safety, security, and environmental
protection doctrine, policy, and regulations, as well as
ensuring policy alignment throughout the Federal Government and
with international maritime partners.
He recently served as the Federal on-scene coordinator for
the Deepwater Horizon incident in the Gulf. We appreciate your
service for that horrific incident, and our Nation as well.
While there, he directed Federal, State, and local agencies in
their response efforts as well.
Mr. Steve Caldwell is the director of maritime security and
Coast Guard at the Government Accountability Office, the GAO.
His recent reports and testimony covered issues relating to
protecting critical infrastructure, the implementation of the
Maritime Transportation Security Act and the SAFE Port Act,
port security exercises, maritime threat information sharing,
maritime domain awareness, container security programs, and
risk management for critical maritime infrastructure as well.
The Chairwoman would now recognize Mr. Heyman for his
testimony.
STATEMENT OF DAVID HEYMAN, ASSISTANT SECRETARY, OFFICE OF
POLICY, U.S. DEPARTMENT OF HOMELAND SECURITY
Mr. Heyman. Thank you, Chairwoman Miller, Ranking Member
Cuellar, and other distinguished Members of the subcommittee.
Thank you for the opportunity to appear here today.
I am pleased to highlight the Department's work in the area
of supply chain security and maritime security. This is an
issue of great importance to us.
International trade is this engine that is now the power of
economies all around the world. Billions of dollars worth of
commodities and merchandises move between trading partners
every month by land, sea, and air.
The modern international trading system, or the global
supply chain that undergirds the exchange of goods between
countries, it is a system that has evolved over decades. We
have experienced a dramatic transformation over the past
quarter of a century, with the integration and interconnection
of buyers and sellers, suppliers and manufacturers all over the
world.
Information and communication technologies have enabled
this transformation, creating jobs, wealth, and opportunity.
Today, that supply chain provides food, medicine, energy, and a
myriad of other products that sustain our daily lives.
This is true around the world. It is a model of economic
efficiency, enabling just-in-time delivery. But it also means
that our economies are more and more interdependent. The
expansive nature of the global supply chain system also renders
it vulnerable to disruption. We have seen this in terrorist
acts, the volcano on Iceland, and in the recent tsunami in
Japan.
Disruptions can have a significant impact on our National
economies. As such, governments and businesses around the world
have a vital interest in transforming the old model of
efficiency, and adopting a new model based on ensuring the
integrity and reliability of supply chain.
That is precisely what we seek to achieve with the
administration's new National Strategy for Global Supply Chain
Security; 2 weeks ago, Secretary Napolitano announced the
strategy.
It is a strategy to ensure the security and resilience of
the global supply chain. It recognizes the critical importance
of the system to our economy and security, and lays out an
approach to help us foster a transformation from just-in-time
to just-in-case.
This country's safety and security will always remain a
paramount concern of the Department. The supply chain is an
integral component. We have taken a number of significant
efforts to strengthen the global supply chain, which we can
talk about today.
Specifically on the administration's strategy, it
incorporates and builds upon these prior efforts. There are two
principle goals: Promoting the timely and efficient flow of
legitimate commerce, while protecting and securing the supply
chain from exploitation; and No. 2, fostering a global supply
chain system that is prepared for and can withstand evolving
threats and hazards, and also recover rapidly.
The strategy aligns U.S. and international security and
resilience efforts to foster agile systems, able to resolve
threats early, improve verification and detection, and reduce
vulnerabilities. We do this by galvanating action through a
whole-of-Government, all-of-Nation approach, and through
managing risk by utilizing layered defenses.
We would like to especially thank the Congress for its
foresight, and this committee in particular, in the need for
this work, which formed the basis of a strategy under the SAFE
Port Act in 2006.
Again, safety and security of the American people is of
paramount importance to the Department. The strategy is a
significant step forward in this process and evolution.
Over the next 6 months, significant outreach will be
conducted to foreign and domestic stakeholders as part of our
implementation efforts. This builds on a number of on-going
efforts.
In particular, it is worth noting that as a result of
Secretary Napolitano's Supply Chain Security Initiative last
year, we have already made significant progress implementing
the strategy, through new efforts and in some cases new
partnerships, such as with the World Customs Organization, the
International Maritime Organization, International Civil and
Aviation Organization, and the Universal Postal Union.
We are, in fact, helping lead efforts to improve the
security of operations across the global supply chain, to raise
international standards and foster systems for trade recovery
globally.
The written testimony outlines these efforts in greater
detail. Let me close with a final thought.
The global supply chain system is an interconnected,
multimodal, multi-actor system, highly complex. It encompasses
foreign and domestic ports, transportation systems,
conveyances, and infrastructure.
Its strength is its ability to deliver goods that sustain
our daily lives on a near-real-time basis. That system will
continue to grow in scale and importance. So we must recognize
today that, without a doubt, disruptions to this system will
happen. We must think anew on how to best build in not just
efficiency, but security and resilience as well.
Our new National Strategy for Global Chain Security
presents a blueprint for change, while building on efforts and
infrastructure that have been in place for some time. We
encourage other countries and organizations to adopt similar
efforts.
We thank you again for the opportunity to testify, and look
forward to answering the questions you may have.
[The joint prepared statement of Mr. Heyman, Mr. McAleenan,
and Admiral Zukunft follows:]
Joint Prepared Statement of David Heyman, Paul F. Zukunft, and Kevin K.
Mcaleenan
February 7, 2012
introduction
Chairwoman Miller, Ranking Member Cuellar and other distinguished
Members of the subcommittee, thank you for the opportunity to appear
before the subcommittee to highlight the Department of Homeland
Security's work in the area of supply chain security. This is an issue
of singular importance, and we commend the subcommittee for holding
this hearing.
International trade is the engine that powers economies all around
the world. Billions of dollars worth of commodities and merchandise
move between trading partners every month, by land, by sea, and by air.
The modern international trading system--or global supply chain--that
undergirds the exchange of goods between countries is a system that has
evolved over several decades, built incrementally in an effort to
reduce costs and expand markets.
We have experienced a dramatic transformation over the past quarter
of a century with the extraordinary integration and interconnection of
buyers and suppliers and sellers and manufacturers all over the world.
The internet and linkages provided by information and communication
technologies has helped to enable this transformation. The end result
has been the creation of jobs and wealth and opportunity in areas
across the globe.
Today, the global supply chain system provides food, medicine,
energy, and myriad of other products that support and sustain our daily
lives. This is true around the world. It is a model of economic
efficiency built to sustain ``just-in-time'' delivery, but it also
means that our economies are more and more interdependent, one upon
each other.
However, the expansive nature of the global supply chain system
renders it vulnerable to disruption. Disruptions to the global supply
chain can be triggered by a range of causes--man-made or naturally
occurring--a number of which we have witnessed in recent years. Whether
through terrorist acts like the cargo bomb plot in October 2010 or
market-driven forces like the slowdown and lockout in 2002 of 29 ports
on the West Coast or, most recently, by the volcanic ash clouds of the
2010 eruption of the volcano Eyjafjallajokull in Iceland or the Tsunami
that hit Tohoku, Japan in 2011, we see the impact that disruptions can
have on our national economies.
Given this, governments and businesses around the world have an
interest in transforming the old model of efficiency and adopting a new
model based also on ensuring the integrity and reliability of the
system as well. In other words, we must move from a model principally
focused on ``just-in-time'' to one also predicated on ``just-in-case''.
It is this notion of a need for greater integrity and reliability that
shapes the context for the administration's new--first-ever--strategy
to ensure the security and resilience of the global supply chain. It
has also been a driving force in our work internationally to foster
systems for trade recovery on a global scale.
the administration's new national strategy for global supply chain
security
The United States Government, in collaboration with State, local,
Tribal, international, and private sector stakeholders, has undertaken
a number of efforts to strengthen the global supply chain. These
efforts include implementation of legislative requirements and a number
of strategic efforts with a specific security focus. The
administration's Strategy incorporates and builds upon those prior
efforts.
Initially begun in response to a requirement in the Security and
Accountability for Every Port (SAFE Port) Act of 2006 that DHS develop
a final Strategy to Enhance International Supply Chain Security by July
2010, it was quickly recognized that the multimodal, international
nature of the global supply chain system required a broad, all-of-
government effort that included input from public and private sector,
international, and domestic stakeholders. This effort was led by the
National Security Staff and is intended to inform and guide efforts by
all stakeholders, but especially those of the Federal Government.
The focus of the Strategy is the worldwide network of
transportation, postal, and shipping pathways, assets, and
infrastructure by which goods are moved from the point of manufacture
until they reach an end consumer, as well as supporting communications
infrastructure and systems. Our approach to supply chain security has
two principal goals:
(1) To promote the timely and efficient flow of legitimate
commerce, while protecting and securing the supply chain from
exploitation and reducing its vulnerabilities to disruption;
and
(2) To foster a global supply chain system that is prepared for and
can withstand evolving threats and hazards and can recover
rapidly from disruptions.
At its core, the Strategy is about a layered, risk-based, and
balanced approach in which necessary security measures and resiliency
planning are integrated into supply chains. It is about protecting
supply chains from being targeted or exploited by those seeking to
cause harm. And, it is about maximizing the flow of legitimate
commerce. The Strategy achieves this by establishing and adhering to
two guiding principles:
(1) Galvanize action through a whole-of-Government, all-of-Nation
approach and by collaborating with State and local governments,
the private sector and the international community.
(2) Manage risk by utilizing layered defenses, resolving threats as
early in the process as possible, and adapting our security
posture to changing environments and evolving threats.
Recognizing the good work already accomplished by the United States
and the international community, the Strategy does not seek to supplant
or impede those efforts. Rather, it seeks to align U.S. and
international security and resilience efforts, to foster agile systems
able to resolve threats early, improve verification and detection, and
reduce systemic vulnerabilities.
The Strategy also sets out eight priority actions upon which
immediate implementation efforts will be focused. Through the Strategy,
over the next year and beyond, the President has tasked us with:
(1) Aligning Federal activities across the U.S. Government (USG) to
the goals of the Strategy;
(2) Refining our understanding of the threats and risks associated
with the global supply chain through updated assessments;
(3) Advancing technology research, development, testing, and
evaluation efforts aimed at improving our ability to secure
cargo in air, land, and sea environments;
(4) Identifying infrastructure projects to serve as models for
developing critical infrastructure resiliency best practices;
(5) Seeking opportunities to incorporate global supply chain
resiliency goals and objectives into Federal infrastructure
investment programs and project assessment processes;
(6) Promoting necessary legislation to support Strategy
implementation by Federal departments and agencies;
(7) Developing, in concert with industry and foreign governments,
customized solutions to speed the flow of legitimate commerce
in specific supply chains that meet designated criteria and can
be considered low-risk; and
(8) Aligning trusted trader program requirements across Federal
agencies. We will consider the potential for standardized
application procedures, enhanced information-sharing
agreements, and security audits conducted by joint or cross-
designated Federal teams.
The Strategy also fulfills DHS's SAFE Port Act requirement to
submit a Strategy to Enhance International Supply Chain Security, when
combined with the DHS report Fulfilling the SAFE Port Act Requirements,
which was transmitted to this committee on January 25, 2012. This SAFE
Port Act requirements report addresses those areas of the Act which
Congress directed us to consider, such as impacts to small and medium
enterprises and supply chain linkages with terrorism financing. As
outlined in the report, we considered these issues carefully and they
directly informed the development of the goals and objectives of the
Strategy.
implementation outreach to global supply chain stakeholders
Recognizing the interconnected nature of the global supply chain
system, the Strategy emphasizes that continued collaboration with
global stakeholders is critical.
Over the 6 months following its release, significant outreach will
be conducted by the United States to foreign and domestic stakeholders.
We are soliciting their views on how best to implement the Strategy and
how best to foster a secure, efficient, and resilient global system.
Outreach to our foreign partners will be accomplished through a
collaborative process in which the Department of State and DHS engage
with appropriate government Ministries and organizations. This
engagement will educate our partners on our strategic goals and
objectives and solicit their input of how we can best implement secure,
efficient, and resilient systems that span the globe, from the
beginnings of supply chains to their end.
We will confer with our domestic partners through a Cross Sector
Supply Chain Working Group that DHS has established under the Critical
Infrastructure Partnership Advisory Council. Through this process,
Critical Infrastructure Sectors will be consulted through their Sector
Coordinating Councils (SCC). The general public, or industry segments
that do not directly participate in the SCCs, will be able to
participate in these discussions as subject matter experts, ensuring we
obtain the broadest possible input.
We are specifically interested in receiving views and
recommendations from governments, transportation sector partners, and
other affected stakeholders on, but not limited to, the following
areas:
Specific opportunities to implement the goals of the
Strategy and enhance the security, efficiency, and resilience
of the global supply chain;
Understanding evolving threats (man-made as well as natural)
and vulnerabilities in the global supply chain as a whole and
among different modes of transportation;
Opportunities to develop or advance international best
practices, standards, or guidelines for reducing threats/
vulnerabilities and opportunities to encourage global
implementation of them;
Opportunities for the USG to work in concert with industry
and the international community to further strengthen the
global supply chain, including ways to increase participation
in and improve the cost-effectiveness of private-public
partnership programs;
Assumptions that currently inform supply chain security
policies and programs that may be incorrect, dated, or
obsolete.
The results of the outreach will be combined with other, on-going
work, including threat and risk assessments, to support Federal
department and agency implementation planning.
building on past and on-going initiatives
While the National Strategy for Global Supply Chain Security
speaks to our future focus, we would like to address current
efforts to secure our ports and waterways and collaborate with
our international partners.
Global Initiatives
As discussed previously, we recognized early in the Strategy
development process that supply chains are inherently interconnected,
intermodal--and global. Even as the Strategy was being created, DHS
increased its emphasis on working with the international community to
enhance efficiency, security, and resilience and meet the President's
strategic goals. Our on-going efforts now that the Strategy has been
released will form a basis for our implementation activities.
In January, 2011, Secretary Napolitano identified global supply
chain security as a focal point for our Department.
She specifically emphasized the need for global collaboration--and
met with the Secretary Generals of the International Maritime
Organization (IMO), the International Civil Aviation Organization
(ICAO), and the World Customs Organization (WCO), as well as the
leadership of the Universal Postal Union (UPU).
Her engagement has resulted in seven international objectives,
which we have been actively pursuing:
(1) Identifying and Responding to Evolving Threats/Risks;
(2) Expanding Advance Information Requirements Across All Modes;
(3) Streamlining ``Trusted Trader'' Programs;
(4) Stemming the Flow of Illicit Shipments of Dangerous Materials;
(5) Securing and Facilitating Air Cargo and Global Mail;
(6) Building a Resilient System; and
(7) Exploring and Deploying New Technologies.
There has been significant progress since January 2011, including
not only the practical efforts to improve the security of operations
across the global supply chain, but also advancing the
institutionalization of these efforts on an international level through
new work streams, international bodies committed to our objectives, and
new standard-setting processes. Among other results, our work with our
partners has had the following impacts:
The WCO has developed a Risk Management Compendium, enabling
Customs administrations to operate under common terminology and
criteria to target both high- and low-risk cargo.
The ICAO is currently finalizing its Risk Context Statement,
which will be presented to the Aviation Security Panel of
Experts in March, 2012, creating a common risk definition for
aviation security.
The ICAO established a Transshipment sub-working group to
address air cargo that is transshipped through world airports.
The IMO has completed a user's guide for International Ship
and Port Facility Security (ISPS) Code implementation,
enhancing compliance and understanding of port security
standards.
The WCO has revised its advance data guidelines, modeled
after DHS's Importer Security Filing rule (better known as
``10+2'') and is working on refining air cargo advance data
guidelines in coordination with the Air Cargo Advance Screening
pilots currently being conducted by DHS.
DHS has been actively aligning ``trusted trader'' programs
such as the Customs Trade Partnership Against Terrorism (C-
TPAT) and the ``trusted shipper'' concept, and are working with
the ICAO and WCO toward creating common global standards.
The Immigration and Customs Enforcement (ICE) project Global
Shield has transitioned into the WCO Program Global Shield,
with significantly expanded--and growing--participation across
the globe to detect illegal activity and mitigate the
misdirection of improvised explosive device precursor materials
through seizures and arrests. Under Program Global Shield, more
than 89 participating countries are currently sharing
information with each other to ensure that chemicals entering
their countries are being used in safe and legal ways. As of
December 2011, Program Global Shield has accounted for seizures
of chemical precursors totaling over 45 metric tons and 19
arrests related to the illicit diversion of these chemicals.
The International Atomic Energy Agency (IAEA), in
collaboration with DNDO, is developing technical standards for
detection devices and recommendations on addressing nuclear and
other radioactive materials out of regulatory control. DHS is
also working with the IAEA to establish an Action Plan to
finalize a list of detection technologies that meet
international standards by April 2012. Based on their analysis,
shortfalls in current standards will be identified and targeted
for action.
Work is on-going with the UPU to strengthen advance
information for mail and postal operations and develop a
strategy embracing security and advance data sharing measures
for consideration at the UPU Congress in October 2012. The UPU
has established emergency contacts in all countries to
facilitate the adjudication of potential security alerts and is
establishing an international standard for the handling and
resolution of anomalies detected at international mail transit
hubs.
The Asia-Pacific Economic Cooperation (APEC) adopted
regional information guidelines for government-to-government
and government-to-private sector communications related to
trade recovery in September, 2011. The APEC information
guidelines were subsequently adopted by the WCO, creating
global guidelines, in December, 2011.
Bilateral Agreements and Partnerships
Specific to supply chain security, DHS has entered into Joint
Statements or publicly affirmed our mutual commitment through published
meeting summaries and statements with a number of nations, and is
discussing additional statements with key partners. These statements
reaffirm our commitment and our partners' commitments to cooperate,
identify key areas of mutual emphasis and principles, and encourage
collaboration in our efforts with multilateral forums such as the IMO,
ICAO, and WCO. To date, Joint Statements have been signed with New
Zealand and the European Commission, and supply chain security has been
specifically addressed with the Russian Federation, India, and Canada.
To increase the operational reach of U.S. assets, and to enable
partner nation assets to patrol and respond to threats in their own
sovereign waters, the U.S. Government has entered into 41 bilateral
maritime counter-drug law enforcement agreements. Additionally, the
Coast Guard has developed non-binding operational procedures with
Mexico, Ecuador, and Peru to facilitate communications between
operation centers for the confirmation of registry requests and for
permission to stop, board, and search vessels. Coast Guard law
enforcement and border security capabilities are evident at both the
National and the port level.
The Strategy, and our international agreements and partnerships,
also directly support the President's priorities as outlined in the
``Beyond the Border'' Initiative with Canada and the ``21st Century
Border Management'' Agreement with Mexico. Indeed, many of the specific
activities associated with the efforts were informed by and aligned
with the strategy during their development.
International Port Security
To address threats farthest from our borders, the Coast Guard
establishes and fosters strategic relationships with other nations and
international forums. The ISPS Code was created by the IMO with
significant Coast Guard assistance. The ISPS Code provides an
international regime to ensure ship and port facilities take
appropriate preventive measures to ensure security, similar to our
domestic regime in the Maritime Transportation Security Act. The
International Port Security (IPS) Program sends Coast Guard men and
women to foreign ports that conduct maritime trade with the United
States to assess the effectiveness of their antiterrorism measures and
to verify compliance with ISPS Code. To date, the IPS Program has
assessed more than 900 ports and facilities in more than 150 countries.
In 2011, the IPS program assessed the effectiveness of 211 port
facilities in 76 of our maritime trading partners. Two countries were
found to not have adequate anti-terrorism measures in place in their
ports. As a result, they were added to the Coast Guard's Port Security
Advisory (PSA) and conditions of entry (COE) were imposed on vessels
that have visited one of those ports during their last several port
calls before arriving in the United States.
The Coast Guard also supports the European Commission, the
Organization of American States, the APEC, and the Secretariat of the
Pacific Community to reduce the number of non-compliant foreign ports,
thereby reducing and mitigating risk to U.S. ports. Vessels arriving to
the United States from non-ISPS compliant countries are required to
take additional security precautions, may be boarded by the Coast Guard
before being granted permission to enter, and may be refused entry.
As a result of the enactment of the Coast Guard Authorization Act
of 2010, the Coast Guard received additional authority to conduct
capacity-building activities. The Coast Guard has implemented a Port
Security Engagement Strategy to expand its engagement with countries
beyond minimal ISPS Code implementation to a more robust effort to
improve all aspects of port security including legal regimes, maritime
domain awareness, and port security operations. The Coast Guard has
also developed a Return on Investment Model that identifies countries
where capacity-building activities would be of the most benefit.
Finally, DHS is pursuing a ``Mutual Recognition'' Memorandum of
Understanding (MOU) with the European Commission (EC). The MOU would
call for mutual joint inspections of each other's ports, and the Coast
Guard would recognize a successful EC inspection of its Member State's
ports the same as a successful country visit by the IPS Program. A
similar arrangement is being contemplated with Canada.
Maritime Domain Awareness and Offshore Operations
Maritime Domain Awareness (MDA) is a diverse set of capabilities
that support all levels (strategic, operational, and tactical) of
decision-making. MDA is more than an awareness of ships en route to a
particular port; it also entails knowledge of:
People: Crew, passengers, owners, and operators;
Cargo: All elements of the global supply chain;
Infrastructure: Vital elements of the Nation's maritime
infrastructure, including facilities, services, and systems;
Environment: Weather, environmentally sensitive areas, and
living marine resources; and
Trends: Shipping routes, migration routes, and seasonal
changes.
Effective MDA requires efficient information sharing that demands
coordination among numerous participants at international, Federal,
regional, State, local, territorial, and Tribal levels of government,
as well as with maritime industry and private sector partners.
The Coast Guard's major cutters and deployable forces are critical
to the layered security approach. The Coast Guard's mix of cutters,
aircraft, and boats--all operated by highly proficient personnel--allow
the Coast Guard to maximize its unique authorities to exercise layered
and effective security.
Maritime Intelligence and Targeting
As the lead DHS agency for maritime homeland security, the Coast
Guard screens ships, crews, and passengers for all vessels required to
submit a 96-hour Notice of Arrival (NOA) to a U.S. port. CBP's National
Targeting Center (NTC), supported by Coast Guard staff, vets
passengers, personnel, and cargo destined for the United States.
Further vetting of the NOA is performed by the Intelligence
Coordination Center (ICC), while the two Maritime Intelligence Fusion
Centers (MIFCs) focus on screening the vessel itself. The MIFCs
associate relevant intelligence and law enforcement analysis to
specific vessels, and assess vessel activity. Screening results are
passed to the appropriate Coast Guard Sector Command Center, local
intelligence staffs, and CBP field offices to be used to ascertain the
potential risk posed by a vessel.
At Home In Our Ports
Coast Guard Captains of the Port (COTP) are designated as the
Federal Maritime Security Coordinator for their port. In this role they
lead the Area Maritime Security (AMS) Committees, which often include
representatives from CBP, ICE, and the TSA, and oversee the development
and regular review of the AMS Plans. AMS Committees have developed
strong working relationships with other Federal, State, Tribal,
territorial, and local law enforcement agencies in an environment that
fosters maritime stakeholder participation. Each AMSC reflects the
unique challenges and environment of the local port community.
On a National scale, the establishment of Interagency Operations
Centers (IOCs) for port security is well under way. Coast Guard, CBP,
and other agencies are sharing workspace and coordinating operational
efforts for improved efficiency and effectiveness of maritime assets in
ports including Charleston, Puget Sound, San Diego, Boston, and
Jacksonville.
The Coast Guard is also responsible for inspecting U.S. port
facilities and vessels for safety and security and ensuring compliance
with U.S. laws and regulations. In 2011, 10,209 facility safety and
security inspections were completed and more than 9,500 Port State
Control and Security examinations were conducted on foreign-flag
vessels.
Cargo Security and Supply Chain Integrity
As the lead DHS agency for cargo security, CBP is at the front line
of protecting the Nation from threats, including those posed by
containerized cargo. CBP's security and trade facilitation missions are
mutually supportive: By utilizing risk-based strategies, and applying a
multilayered approach, CBP can focus time and resources on the small
percentage of goods that are high-risk or about which we know the
least, which in turn allows CBP to expedite trade that is low-risk or
about which we already know a great deal. This approach improves supply
chain integrity, promotes economic viability and increases resilience
in the event of a disruption to the global supply chain.
CBP's multilayered security approach involves:
Obtaining information about cargo and those involved in
moving it early in the process;
Using advanced targeting techniques to assess risk and build
a knowledge base about the people and companies involved in the
supply chain;
Fostering partnerships with the private sector and
collaborating with other Federal agencies and departments, such
as the U.S. Coast Guard, Department of Health and Human
Services, the Consumer Product Safety Commission, ICE, and the
Department of Agriculture, and with foreign governments,
including through information sharing;
Expanding enforcement efforts to points earlier in the
supply chain than simply at our borders; and
Maintaining robust inspection regimes, including non-
intrusive inspection equipment and radiation detection
technologies, at our ports of entry.
CBP requires advance electronic cargo information, as mandated in
the Trade Act of 2002 (24-Hour Rule, through regulations), for all in-
bound shipments in all modes of transportation. CBP requires the
electronic transmission of additional data, as mandated by the SAFE
Port Act, through the Importer Security Filing and Additional Carrier
Requirements rule (Security Filing ``10+2''), which became effective as
an Interim Final Rule on January 26, 2009, and went into full effect on
January 26, 2010. Security Filing ``10+2'' joins the 24-hour rule, and
the C-TPAT program and Container Security Initiative (CSI) discussed
below, in collecting advance information to improve CBP's targeting
efforts.
As part of CBP's layered targeting strategy, the National Targeting
Center--Cargo (NTC-C) proactively analyzes advance cargo tactical and
strategic information using the Automated Targeting System (ATS) before
shipments reach the United States. ATS provides uniform review of cargo
shipments for identification of the highest threat shipments, and
presents data in a comprehensive, flexible format to address specific
intelligence threats and trends. Through targeting rules, the ATS
alerts the user to data that meets or exceeds certain predefined
criteria. National targeting rule sets have been implemented in ATS to
provide threshold targeting for National security risks for all modes
of transportation--sea, truck, rail, and air. ATS is a decision support
tool for CBP officers working in the NTC-C and in Advanced Targeting
Units at our ports of entry and CSI ports abroad allowing officers to
focus on the highest threats while facilitating legitimate trade.
NTC-C has established partnerships and liaisons with other
agencies, both domestically and abroad. Partnerships with ICE, the Drug
Enforcement Administration, the Financial Crimes Enforcement Network
(FinCEN), the Department of Commerce, and the Department of Health and
Human Services promote information sharing and the exchange of best
practices, while collaboration with foreign governments results in
seizures and detection of threats at our borders and in foreign ports.
Customs Trade Partnership Against Terrorism (C-TPAT)
CBP works with the trade community through the C-TPAT, a voluntary
public-private partnership program wherein some members of the trade
community adopt tighter security measures throughout their
international supply chain and in return are afforded benefits such as
reduced exams, front-of-line examination privileges to the extent
possible and practical, and an assigned Supply Chain Security
Specialist who helps them maintain compliance. C-TPAT has enabled CBP
to leverage private sector resources to enhance supply chain security
and integrity.
CBP conducts records checks on the company in its law enforcement
and trade databases and ensures the company meets the security criteria
for its particular business sector. Members who pass extensive vetting
are certified into the program. Using a risk-based approach, CBP Supply
Chain Security Specialists conduct on-site visits of foreign and
domestic facilities to confirm that the security practices are in place
and operational.
C-TPAT has been a success--membership in this program has grown
from 7 companies in its first year to 10,221 as of January 12, 2012.
Additionally, CBP is working with foreign partners to establish bi-
national recognition and enforcement of C-TPAT. CBP currently has
signed mutual recognition arrangements with New Zealand, Canada,
Jordan, Japan, and Korea and is continuing to work towards similar
recognition with the European Union, Singapore, Taiwan, and other
countries.
Container Security Initiative (CSI)
Close coordination and joint operations with CBP and ICE in
international programs are also critical. The CSI ensures that U.S.-
bound maritime containers that pose a high risk are identified and
inspected before they are placed on vessels destined for the United
States.
Through CSI, CBP stations multidisciplinary teams of officers to
work with host country counterparts to identify and examine containers
that are determined to pose a high risk for terrorist activity. CSI,
the first program of its kind, was announced in January 2002 and is
currently operational in 58 foreign seaports--covering more than 80
percent of the maritime containerized cargo shipped to the United
States.
CBP officers stationed at CSI ports, with assistance from CSI
targeters at the NTC-C, review 100 percent of the manifests originating
and/or transiting those foreign ports for containers that are destined
for the United States. In this way, CBP identifies and examines high-
risk containerized maritime cargo prior to lading at a foreign port and
before shipment to the United States. In fiscal year 2011, CBP officers
stationed at CSI ports reviewed over 9.5 million bills of lading and
conducted 45,500 exams in conjunction with their host country
counterparts.
CBP is exploring opportunities to utilize emerging technology in
some locations, which will allow the program to become more efficient
and less costly. In January 2009, CBP began to reduce the number of
personnel stationed overseas who perform targeting functions,
increasingly shifting more of the targeting of high-risk containers to
personnel stationed at the NTC-C. This shift in operations reduces
costs without diminishing the effectiveness of the CSI program. CSI
will become a hybrid of different operational protocols designed around
the uniqueness of each foreign port. CBP will remain operational in all
58 locations in fiscal year 2012 with sufficient personnel in country
to conduct the examinations of high-risk shipments with the host
government and to maintain relationships with their host-country
counterparts.
Secure Freight Initiative (SFI)
The SFI partnered with the Department of Energy deploying networks
of radiation detection and imaging equipment at six overseas pilot
ports. All pilot operations, with the exception of Qasim, Pakistan have
ended and those ports have reverted back to the CSI protocols of risk-
based targeting. The pilots encountered a number of serious challenges
to implementing the 100% scanning mandate.
While each port presented a unique set of challenges, most of the
challenges were universal in nature. CBP has documented numerous
challenges associated with implementing 100 percent scanning including
diplomatic challenges, international trade opposition, the need for
port reconfiguration, potential for reciprocal requirements on the
United States and lack of available technology to efficiently scan
transshipped cargo. It is also important to keep in mind that
approximately 80% of the cargo shipped to the United States is sent
from only 58 of more than 700 ports. Installing equipment and placing
personnel at all of these ports--regardless of volume--would strain
Government resources without a guarantee of results.
Non-Intrusive Inspection (NII)/Radiation Detection Technology
The deployment of imaging systems and radiation detection equipment
has made a tremendous contribution to CBP's progress in securing the
supply chains that bring goods into the United States from around the
world against exploitation by terrorist groups. NII technology serves
as a force multiplier that allows officers to detect possible anomalies
between the contents of a container and the manifest. CBP's use of NII
allows us to work smarter and more efficiently in recognizing potential
threats and allows cargo to move more expeditiously from the port of
entry to the final destination.
CBP has aggressively deployed NII and Radiation Portal Monitor
(RPM) technology. Prior to 9/11, only 64 large-scale NII systems, and
not a single RPM, were deployed to our country's borders. Today CBP has
301 NII systems and 1,388 RPMs. To date, CBP has used the deployed NII
systems to conduct over 60 million examinations, resulting in over
11,200 narcotic seizures, with a total weight of over 3.2 million
pounds, and more than $45.9 million in undeclared currency seizures.
CBP uses RPMs to scan 99 percent of all in-coming containerized cargo
arriving in the United States by sea and 100% of all passenger and
cargo vehicles entering the U.S. land ports of entry. Since RPM program
inception in 2002, CBP has scanned over 679 million conveyances for
radiological contraband, resulting in more than 2.8 million alarms.
CBP's Laboratories and Scientific Services 24/7 Teleforensic Center
spectroscopy group at the NTC has responded to nearly 53,000 requests
from the field for technical assistance in resolving alarms. To date,
100 percent of alarms have been successfully adjudicated as legitimate
trade.
conclusion
The global supply chain system is an interconnected multimodal
system, encompassing foreign and domestic ports, transportation
systems, conveyances, and infrastructure. Enhancing its security,
efficiency, and resilience requires a culture of mutual interest and
shared responsibility among stakeholders throughout the world. It
requires a balanced approach and the dedication of resources,
collaboration--and where necessary, compliance verification and
enforcement.
While our efforts to date have been successful, we recognize that
further diligence is required. Our new National Strategy for Global
Supply Chain Security presents a blueprint for change, while building
on efforts and infrastructure that have been in place for some time.
The risk of natural disasters and other disruptions to the global
supply chain presents a risk to our Nation's economic strength and
vitality. Our Strategy presents an opportunity to continue to promote
America's future economic growth and international competitiveness by
remaining open and thriving for business.
Thank you again for this opportunity to testify about our efforts.
We look forward to answering any questions you may have.
Mrs. Miller. Thank you very much. Appreciate that
testimony.
The Chairwoman now recognizes Mr. McAleenan for his
testimony.
STATEMENT OF KEVIN MCALEENAN, ACTING ASSISTANT COMMISSIONER,
OFFICE OF FIELD OPERATIONS, U.S. CUSTOMS AND BORDER PROTECTION,
U.S. DEPARTMENT OF HOMELAND SECURITY
Mr. McAleenan. Madam Chairwoman, Ranking Member Cuellar,
esteemed Members of the subcommittee, it is a privilege and
honor to appear before you today to discuss U.S. Customs and
Border Protection's work to balance maritime security and trade
facilitation, protecting the country from dangerous shipments,
and enhancing the security of the global supply chain, while
expediting legitimate commerce.
Customs and Border Protection, or CBP, is charged with
managing the physical access to our economy and our Nation and
ports of entry. At the core of that responsibility, we are on
the front lines of protecting our Nation from threats,
including those that could potentially be introduced in cargo
shipments.
Just as importantly, CBP is on the front lines of
protecting our economic future by facilitating legitimate trade
through our ports. Through the use of better information,
technology, partnerships, we have been able to form the most
effective supply chain security structure in the world, helping
to reduce transaction costs for U.S. business, and provide an
environment where U.S. security and business interests can work
together toward our common mission.
To meet our responsibilities, we have worked to identify
and address potential threats before they arrive at our ports.
This requires that we secure the flow of cargo at each stage of
the supply chain, the point of origin, while in transit, and
when it arrives in the United States.
To accomplish this, CBP pursues a multi-layered approach to
security, segmenting cargo by potential risk, and examining it
as early as possible in the process. Although often presented
as being in tension or conflict, our security and trade
facilitation missions are mutually supporting.
By utilizing a risk-based strategy, we can focus our time
and resources on the small percentage of goods that are higher
risk, which in turn allows us to expedite trade that is low
risk or about which we already know a great deal.
Our multi-layered approach is based on the following core
elements: Obtaining information about cargo shipments as early
in the process as possible, using sophisticated targeting
techniques to assess each shipment for risk, partnering with
the private sector to secure supply chains from the
manufacturer to the importer, working with foreign governments
and international organizations like the World Customs
Organization to harmonize and enhance approaches to supply
chain security, and maintaining a robust inspection regime,
including non-intrusive inspection equipment and radiation
detection technology at our ports of entry.
I am sure these elements are quite familiar to the
subcommittee, especially in light of how these tenets are
fundamental to the approach taken in the new National strategy.
Over the past several years, DHS and CBP, often working
closely with you and your staff, have achieved significant
advances on both cargo security and trade facilitation. Allow
me to highlight a few.
With your support, we have implemented the Import Security
Filing, of 10+2. Building on the 24-hour rule, this program
provides additional insight into the supply chain, allowing us
to identify potential risks more accurately, and allowing our
trade partners to identify inefficiencies in their processes.
We have developed and enhanced the unique capabilities of
the National Targeting Center for Cargo to proactively analyze
advanced cargo information using the automated targeting
system, which allows us to take action before shipments are
loaded onto vessels and aircraft destined to the United States.
The CBP Trusted Shipper Program, the Customs Trade
Partnership Against Terrorism, or C-TPAT, has long been
recognized as the model for true collaboration between
Government and business. Today, there are over 10,000 members,
representing over 55 percent of the imported value into this
country.
While terrorism will remain the primary C-TPAT focus, we
will explore ways to collaboratively address other threats that
have the potential to compromise the supply chain, including
drug smuggling, weapons trafficking, and trade and import
safety violations.
Under the Container Security Initiative, or CSI, CBP
continues to work with our international partners to mitigate
the threat that high-risk maritime cargo present before it
leaves the foreign ports. Today, CBP CSI maintains operations
at 58 ports in 32 countries, screening approximately 80 percent
of the maritime cargo being shipped to the United States.
We are continuing our aggressive deployment and use of
advance imaging systems and radiation detection equipment at
our ports. This non-intrusive inspection technology allows us
to work smarter and more efficiently in recognizing potential
threats.
These highlights demonstrate that CBP remains at the
forefront of supply chain management. I am confident that the
approach laid out in the National strategy represents an
effective way forward, building on these existing programs.
Thank you again for the opportunity to testify about CBP's
commitment to enhancing cargo security and trade resilience.
We look forward to continuing to work with the subcommittee
on these issues. I will be happy to take any of your questions.
Mrs. Miller. Thank you very much.
The Chairwoman now recognizes Admiral Zukunft.
STATEMENT OF REAR ADMIRAL PAUL ZUKUNFT, ASSISTANT COMMANDANT
FOR MARINE SAFETY, SECURITY, AND STEWARDSHIP, U.S. COAST GUARD,
U.S. DEPARTMENT OF HOMELAND SECURITY
Admiral Zukunft. Good morning, Chairwoman Miller, Ranking
Member Cuellar, and distinguished Members of the subcommittee.
I am honored to appear before you today to speak about the
Coast Guard's layered approach to protecting our ports,
maritime commerce, and securing the global maritime supply
chain.
From our inception, the United States has been a maritime
Nation. Considering that high concentrations of our population
live and around port areas, and 95 percent of our international
trade is done via the sea, the consequences of any attack or
disruption on our maritime transportation system are
potentially severe.
Backed by the Maritime Transportation Security Act of 2002,
and the Security and Accountability for Every Port Act of 2006,
the Coast Guard has led a joint Federal, State, local, Tribal,
private sector, and international charge to implement a robust,
layered security approach, that starts in ports abroad, carries
across the high seas, and culminates in our domestic waterways,
designed to identify and stop any threat long before it reaches
our shores.
Our efforts start abroad under the auspices of the
International Ship and Port Facility Security Code, which
guides the Coast Guard's overseas assessment at more than 900
port facilities and 153 of the 157 countries that could
potentially conduct maritime commerce with the United States.
For example, in 2010, two companies commenced the shipment
of liquefied natural gas from Yemen to the United States. Due
to the increased terrorist risk at the origin, the Coast Guard
conducted additional port assessments in Yemen, and are now
using biometric technologies to screen arriving crew members
before they depart Yemen.
Those vessels are also inspected with an undersea
inspection, well in advance, in the Mediterranean Sea, before
they make arrival in U.S. ports.
Offshore, a major cutter fleet maintains a vigilant
presence, conducting fisheries enforcement, counter-drug, alien
migrant interdiction operations, while armed with the
authorities of 41 bilateral agreements, and simultaneously
maintaining an agile posture to respond to humanitarian
disasters and threats to maritime security and the global
supply chain.
The Coast Guard's planned fleet of National Security
Cutters and Offshore Patrol Cutters, augmented by our long-
range C-130s, maritime patrol craft, and working with Customs
and Border Patrol, are essential to maintaining this offshore
response capabilities.
Additionally, the Coast Guard, in cooperation with U.S.
Customs and Border Protection, ensure that U.S.-bound vessels
that pose a potential risk are identified and inspected before
they reach U.S. shores. Specifically, the Coast Guard and CBP
share and jointly screen manifests 96 hours prior to a vessel's
arrival in the United States, to identify crew, cargo, vessel
documentation, and route anomalies, thereby providing an
appropriate lead time to marshal a response to any threat well
off-shore.
In 2011, the Coast Watch Program, run by Coast Guard's
Intelligence Coordination Center, screened 28.5 million people
and more than 121,000 ship arrivals, as well as their business
practices and associations, and generated 120 advanced warnings
on arriving ships, cargoes, and persons posing a potential
security or criminal threat.
The Coast Guard leads the International Maritime
Organization's Workgroup Three, which focuses on combating
piracy on the high seas. This effort has resulted in several
best practices, such as the use of private armed security teams
on-board commercial vessels transiting the high-risk waters.
In 2011, these teams repelled over 120 attacks that would
have otherwise impacted the global supply chain.
Our final level of security resides in our domestic ports
and waterways. Since 2004, we have reviewed, approved, and
verified compliance of security plans for more than 11,000 U.S.
vessels, 3,200 domestic port facilities, and through the use of
area maritime security committees, have fostered an extensive
interagency collaboration to bolster the security of our
critical infrastructure.
This layered maritime security approach was highlighted in
2010 when the motor vessel Sun Sea, carrying almost 500 illegal
migrant smugglers, with ties to the Tamil Tigers from Sri
Lanka, to Canada, was intercepted by Canadian forces who were
supported by Coast Guard operational intelligence resources.
This case demonstrated our capacity and capability to track
and intercept a potential threat on the high seas, and mitigate
risk to our homeland. It was also a prime utilization of our
Maritime Operational Threat Response Plan, a Presidential-
directed interagency process that establishes protocols for
real-time communication, coordination, and decisionmaking among
interagency principals.
Thank you for the opportunity to appear before you today,
and for your continued support of the Coast Guard. I will be
pleased to answer your questions.
Mrs. Miller. Thank you very much, admiral.
The Chairwoman now recognizes Mr. Caldwell for his
testimony.
STATEMENT OF STEPHEN L. CALDWELL, DIRECTOR, MARITIME AND COAST
GUARD ISSUES, HOMELAND SECURITY AND JUSTICE TEAM, GOVERNMENT
ACCOUNTABILITY OFFICE
Mr. Caldwell. Chairman Miller, Ranking Member Cuellar, and
other Members of the committee, thank you very much for having
GAO up here to talk about supply chain security.
I think it is important to recognize that the issues and
programs that we are talking about today didn't start with the
Secretary's or the President's Strategy from last week. These
things go back 10 years.
They go back to 9/11. They go back to the Maritime
Transportation Security Act, which was passed in November about
10 years ago.
The Maritime Transportation Security Act, among other
things, called for a secure system of international intermodal
transportation, including standards and procedures for
screening, evaluating, and monitoring cargo while in transit.
Since 9/11, GAO has conducted about two dozen reports on
some aspects of supply chain security, everything from the
programs that have been discussed to a lot of the technologies
that have been used, some successfully, and some attempts that
haven't been as successful.
Many of these programs were jump-started right after 9/11.
So I think it was important to understand some of the--that
they had initially. GAO made a number of recommendations
through the years for DHS to improve its strategic planning,
workforce management, internal controls, cost estimates, and
performance measures.
As these programs developed, a lot of GAO's recommendations
were implemented. Through that and the maturation of the
programs, they have certainly improved over the years.
I will be happy to discuss any of those individual programs
during the Q&A session.
Now regarding the 100 percent scanning, the new strategy
itself does not mention the existing statutory requirement. We
completed a thorough review of the 100 percent scanning back in
2009. We cited a number of challenges which did bring into
question the feasibility of whether we can do that as called
for in the law.
In our report, we made a number of recommendations. For
example, we recommended that DHS develop more accurate cost
estimates of what it might cost, conduct a cost/benefit
analysis, conduct a formal feasibility analysis, and after
doing all of these, provide specific alternatives to Congress,
including potential legislation.
Unfortunately, and despite the issuance of the recent
strategy, really little has changed in terms of our
recommendations in the last 2 or 3 years. While DHS partially
concurred with our recommendations at that time, they haven't
implemented most of those.
They now indicate that these recommendations are largely
overcome by events. We think that if DHS had implemented these
recommendations a while back, the Department would be in a much
stronger position to talk about what those alternatives should
be to 100 percent scanning, and actually have specific
legislative things.
It would also be in a stronger position to justify the
waivers that the Department will obviously have to be providing
and notifying Congress about relatively soon. In fact, I think
if these recommendations had been implemented 2 to 3 years ago,
we might already have some kind of maybe legislated compromise
and be quite a bit ahead from where we are right now.
So here we are. We are still at kind of an impasse in turns
of the legislative requirement of the 100 percent scanning. Our
industry and trade partners are still very concerned about the
uncertainty this creates for them.
This is both our domestic industry as well as international
industry.
DHS will soon have to implement their chosen path in terms
of doing a blanket waiver for all ports, and provide Congress
with advanced notification of that. There are substantial
reporting requirements to that waiver. Those will continue as
long as DHS uses the waivers as their preferred tool to meet
the requirements of denial of an act.
In closing, GAO stands ready to continue providing analysis
to Congress on these issues. I thank you. I will be happy to
answer questions along with the rest of the panel.
[The statement of Mr. Caldwell follows:]
Prepared Statement of Stephen L. Caldwell
February 7, 2012
gao highlights
Highlights of GAO-12-422T, a testimony before the Subcommittee on
Border and Maritime Security, Committee on Homeland Security, House of
Representatives.
Why GAO Did This Study
Cargo containers that are part of the global supply chain--the flow
of goods from manufacturers to retailers--are vulnerable to threats
from terrorists. The Maritime Transportation Security Act (MTSA) of
2002 and the Security and Accountability For Every (SAFE) Port Act of
2006 required the Department of Homeland Security (DHS) to take actions
to improve maritime transportation security. Also, the Implementing
Recommendations of the 9/11 Commission Act of 2007 (9/11 Act) required,
among other things, that by July 2012, 100 percent of all U.S.-bound
cargo containers be scanned. Within DHS, U.S. Customs and Border
Protection (CBP) is responsible for container security programs to
address these requirements. This testimony addresses, among other
things: (1) Efforts to gather advance information about container
shipments to assess risks, (2) technologies used to protect the
integrity of containers and scan them, and (3) the status of efforts to
scan 100 percent of U.S.-bound containers. GAO's statement is based on
products issued from April 2005 through July 2011, along with selected
updates conducted from January to February 2012. Updates involved
collecting information from CBP on the status of efforts to address
GAO's prior recommendations on these issues and its plans to implement
100 percent scanning.
What GAO Recommends
GAO has made recommendations in past reports to DHS to strengthen
its container security efforts. DHS concurred with GAO's
recommendations and has either addressed them or is undertaking efforts
to address them.
supply chain security.--container security programs have matured, but
uncertainty persists over the future of 100 percent scanning
What GAO Found
As part of its efforts to identify high-risk cargo for inspection,
CBP uses various sources of information to screen containers in advance
of their arrival in the United States. For example, in 2009, CBP
implemented the Importer Security Filing and Additional Carrier
Requirements to collect additional information for targeting. The
additional cargo information required, such as country of origin, is to
be provided to CBP in advance of arrival of the cargo containers at
U.S. ports. In September 2010, GAO recommended that CBP establish
milestones and time frames for updating its targeting criteria to
include the additional information. In response, CBP updated its
targeting criteria in January 2011.
DHS has made some progress in developing and implementing container
security technologies to protect the integrity of containers and to
scan them. GAO reported in September 2010 that DHS's Science and
Technology Directorate initiated four container security technology
projects to detect and report intrusions into cargo containers.
However, operational testing had not occurred to ensure the prototypes
would function as intended. Therefore, GAO recommended that testing and
evaluation occur in all environments in which DHS planned to implement
the technologies. DHS concurred and has made progress implementing this
recommendation. To prevent the smuggling of nuclear and radiological
materials, CBP, in coordination with the Domestic Nuclear Detection
Office (DNDO), has deployed over 1,400 radiation portal monitors (RPM)
at U.S. ports of entry to detect the presence of radiation in cargo
containers. Since 2006, GAO reported on problems with DNDO's efforts to
deploy a more advanced and significantly more expensive type of RPM.
Among other things, GAO reported that an updated cost-benefit analysis
might show that DNDO's program to replace existing equipment with the
advanced technology was not justified. After spending more than $200
million, DHS ended the program in July 2011.
Uncertainty persists over how DHS and CBP will fulfill the mandate
for 100 percent scanning given that the feasibility remains unproven in
light of the challenges CBP has faced implementing a pilot program for
100 percent scanning. In response to the SAFE Port Act requirement to
implement a pilot program to determine the feasibility of 100 percent
scanning, CBP, the Department of State, and the Department of Energy
announced the formation of the Secure Freight Initiative (SFI) pilot
program in December 2006. However, logistical, technological, and other
challenges prevented the participating ports from achieving 100 percent
scanning and CBP has since reduced the scope of the SFI program from
six ports to one. In October 2009, GAO recommended that CBP perform an
assessment to determine if 100 percent scanning is feasible, and if it
is, the best way to achieve it, or if it is not feasible, present
acceptable alternatives. However, to date, CBP has not conducted such
an assessment or identified alternatives to 100 percent scanning.
Further, as GAO previously reported, DHS acknowledged it will not be
able to meet the 9/11 Act's July 2012 deadline for implementing the 100
percent scanning requirement, and therefore, it expects to grant a
blanket extension to all foreign ports pursuant to the statute, thus
extending the target date to July 2014. To do so, DHS is required to
report to Congress by May 2, 2012, of any extensions it plans to grant.
Chairman Miller, Ranking Member Cuellar, and Members of the
subcommittee: I am pleased to be here today to discuss the status of
Federal efforts to enhance the security of maritime cargo containers
used for shipping many imports to the United States. The potential for
terrorists to smuggle weapons of mass destruction (WMD) inside cargo
containers bound for the United States has remained a concern since the
terrorist attacks of September 11, 2001. Cargo containers are an
important segment of the global supply chain--the flow of goods from
manufacturers to retailers. In 2011, about 10.7 million ocean-borne
cargo containers arrived at U.S. ports, and according to the U.S.
Department of Transportation, the majority of U.S. imports arrive by
ocean vessel.\1\ The typical supply chain process for transporting
cargo containers to the United States involves many steps and
participants. For example, the cargo containers, and the goods in them,
can be compromised not only by the manufacturers or suppliers of the
goods being shipped, but also by vessel carriers who are responsible
for transporting the containers from foreign ports to U.S. ports, as
well as by personnel who load and unload cargo containers onto and off
vessels.\2\
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\1\ U.S. Department of Transportation, Research and Innovative
Technology Administration, Bureau of Transportation Statistics,
America's Container Ports: Linking Markets at Home and Abroad
(Washington, DC: January 2011).
\2\ Cargo containers serve, in essence, as packing crates and
portable warehouses for virtually every type of general cargo moving in
the supply chain.
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Given the complexity of the global supply chain process and the
vast number of cargo containers that are shipped to the United States
each year, the global supply chain is vulnerable to threats that
terrorists and criminals might be able to exploit. As we reported in
October 2009, while the Department of Homeland Security (DHS) has noted
that the likelihood of terrorists smuggling WMD into the United States
in cargo containers is low, the Nation's vulnerability to this activity
and the consequences of such an attack--such as billions of losses in
U.S revenue and halts in manufacturing production--are potentially
high.\3\
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\3\ In 2002, the consulting firm Booz Allen Hamilton sponsored a
simulated scenario in which the detonation of weapons smuggled in cargo
containers shut down all U.S. seaports for 12 days--resulting in a loss
of $58 billion in revenue to the U.S. economy along with significant
disruptions to the movement of goods.
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November of 2012 will mark the 10th anniversary of the enactment of
the Maritime Transportation Security Act (MTSA) of 2002,\4\ which,
among other things, called for the establishment of a program to
evaluate and certify secure systems of international intermodal
transportation, including standards and procedures for screening and
evaluating cargo prior to loading and for securing and monitoring cargo
while in transit.\5\ In 2006, the Security and Accountability For Every
(SAFE) Port Act,\6\ which amended MTSA, required DHS to develop,
implement, and update as appropriate a strategic plan to enhance the
security of the international supply chain.\7\ To address concerns
regarding international supply chain security, U.S. Customs and Border
Protection (CBP), a component of DHS, developed a layered security
strategy for cargo containers. Core components of the layered security
strategy include analyzing information to identify containers that may
be at high risk of transporting WMD or other contraband, working with
governments of other nations to examine containers CBP has determined
to be high-risk before such containers are loaded onto U.S.-bound
vessels at foreign ports, and providing benefits to companies that
comply with predetermined security measures.
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\4\ Pub. L. No. 107-295, 116 Stat. 2064.
\5\ See 46 U.S.C. 70116.
\6\ Pub. L. No. 109-347, 120 Stat. 1884.
\7\ The SAFE Port Act required DHS to report to Congress on this
strategic plan by July 2007, with an update of the strategic plan to be
submitted to Congress 3 years later. See 6 U.S.C. 941(a), (g).
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The SAFE Port Act further requires that pilot projects be
established at three ports to test the feasibility of scanning 100
percent of U.S.-bound containers at foreign ports.\8\ In August 2007,
the Implementing Recommendations of the 9/11 Commission Act of 2007 (9/
11 Act) was enacted,\9\ which requires, among other things, that by
July 2012, 100 percent of all U.S.-bound cargo containers be scanned at
foreign ports with both radiation-detection and nonintrusive inspection
equipment before being placed on U.S.-bound vessels,\10\ with possible
extensions for ports at which certain conditions exist.\11\ Further, in
July 2007, DHS issued the strategic plan called for in the SAFE Port
Act, entitled the Strategy to Enhance International Supply Chain
Security,\12\ and on January 23, 2012, the administration issued the
National Strategy for Global Supply Chain Security,\13\ which describes
a strategy for promoting the efficient and secure movement of goods and
fostering a resilient supply chain.
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\8\ 6 U.S.C. 981. A similar requirement was enacted that same
year by the Department of Homeland Security Appropriations Act, 2007
(Pub. L. No. 109-295, 120 Stat. 1355 (2006)) and is codified at 6
U.S.C. 981a. Both statutes specify scanning as examination with both
radiation detection equipment and nonintrusive imaging equipment. 6
U.S.C. 981(a), 981a(a)(1).
\9\ Pub. L. No. 110-53, 1701(a), 121 Stat. 266, 489-90 (amending
6 U.S.C. 982(b)).
\10\ Radiation-detection equipment identifies radiation being
emitted from a container, and through nonintrusive inspection CBP can
identify anomalies in a container's image which could, among other
things, indicate the presence of shielding material.
\11\ The 9/11 Act scanning provision includes possible extensions
for a port or ports for which DHS certifies that at least two out of a
list of specific conditions exist. Among others, these conditions
include: (1) Adequate scanning equipment is not available or cannot be
integrated with existing systems, (2) a port does not have the physical
characteristics to install the equipment, or (3) use of the equipment
will significantly impact trade capacity and the flow of cargo. See 6
U.S.C. 982(b)(4).
\12\ DHS, Strategy to Enhance International Supply Chain Security
(Washington, DC: July 2007).
\13\ The White House, National Strategy for Global Supply Chain
Security (Washington, DC: Jan. 23, 2012).
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DHS and CBP have taken various actions to enhance maritime
container security. As requested, this statement addresses our work in
this area and includes the following topics:
efforts to gather advance information about container
shipments to assess the risks of these containers;
technologies used to protect the integrity of containers and
to scan them to detect WMD and other contraband;
partnerships with foreign governments and the private sector
to improve container security efforts; and,
the status of efforts to scan 100 percent of U.S.-bound
cargo containers.
This statement is based on related GAO reports and testimonies
issued from April 2005 through July 2011, which addressed various
programs that constitute CBP's layered security strategy, along with
selected updates conducted from January 2012 to February 2012.\14\ For
our prior reports and testimonies, among other things, we analyzed CBP
documents; reviewed legal documentation; and interviewed foreign
government, DHS, CBP, and trade industry officials. We also conducted
site visits to select ports that participate in CBP's container
security programs and CBP's National Targeting Center--Cargo.\15\
Additional details on the scope and methodology for those reviews are
available in our published products. For the updates, we collected
information from CBP on actions it has taken to address recommendations
made in prior GAO reports on which this statement is based. We also
reviewed publicly available documents, such as CBP's budget
justifications for fiscal years 2011 and 2012 and the administration's
National Strategy for Global Supply Chain Security, for information
regarding DHS's and CBP's plans for implementing the 100 percent
scanning requirement. We conducted this work in accordance with
generally accepted Government auditing standards.
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\14\ See the list of GAO's related products included at the end of
this statement.
\15\ The National Targeting Center--Cargo is responsible for
targeting high-risk shipments for inspection.
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cbp has various tools for targeting u.s.-bound cargo containers for
inspections
As part of its efforts to target high-risk cargo containers for
inspection, CBP uses various sources of information to screen
containers in advance of their arrival in the United States.
Specifically, CBP's 24-hour rule requires that vessel carriers submit
cargo manifest information to CBP 24 hours before U.S.-bound cargo is
loaded onto a vessel. To further enhance CBP's ability to target high-
risk shipments, in 2006 the SAFE Port Act required CBP to collect
additional data related to the movement of cargo to identify high-risk
cargo for inspection,\16\ and in 2009 CBP implemented the Importer
Security Filing and Additional Carrier Requirements, collectively known
as the 10+2 rule.\17\ The cargo information required by the 10+2 rule
comprises 10 data elements from importers, such as country of origin,
and 2 data elements from vessel carriers, such as the position of each
container transported on a vessel, all of which are to be provided to
CBP in advance of arrival at a U.S. port. Some of the data are required
to be submitted prior to loading the container onto a U.S.-bound
vessel.\18\ Additionally, the United States has worked to expand the
program beyond domestic implementation by coordinating with the World
Customs Organization (WCO)\19\ to incorporate some of the 10+2 data
elements into the international supply chain security standards, which
are discussed later in this statement. (Figure 1 illustrates where
CBP's container security programs intersect with the key points of
transfer in the global supply chain.)
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\16\ See 6 U.S.C. 943(b).
\17\ Importer Security Filing and Additional Carrier Requirements,
73 Fed. Reg. 71,730 (Nov. 25, 2008) (codified at 19 C.F.R. pts. 4, 12,
18, 101, 103, 113, 122, 123, 141, 143, 149, 178, & 192).
\18\ 19 C.F.R. 4.7c, 149.3(a)-(b).
\19\ The WCO is an independent international organization whose
mission is to enhance the efficiency and effectiveness of customs
administrations.
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
Data that CBP collects on U.S.-bound cargo containers and their
contents are fed into the Automated Targeting System (ATS)--a
computerized model that CBP uses as a decision-support tool in
targeting cargo containers for inspection.\20\ Specifically, within
ATS, CBP uses various data elements to determine an overall risk score
for a particular threat in a shipment. CBP officers use these scores to
help them make decisions on the extent to which documentary reviews or
nonintrusive inspections are to be conducted on cargo containers. In
our September 2010 report on the implementation of the 10+2 rule, we
recommended that CBP establish milestones and time frames for updating
ATS to use the 10+2 data in its identification of shipments that could
pose a threat to National security. In response to this recommendation,
CBP took steps in January 2011 to improve targeting efforts by updating
its targeting criteria in to include risk factors present in the 10+2
data.\21\ We recently began a review of the effectiveness of ATS as
part of CBP's targeting efforts and plan to issue a report later this
year. \22\
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\20\ For more information on ATS, see GAO, Cargo Container
Inspections: Preliminary Observations on the Status of Efforts to
Improve the Automated Targeting System, GAO-06-591T (Washington, DC:
Mar. 30, 2006).
\21\ GAO, Supply Chain Security: CBP Has Made Progress in Assisting
the Trade Industry in Implementing the New Importer Security Filing
Requirements, but Some Challenges Remain, GAO-10-841 (Washington, DC:
Sept. 10, 2010).
\22\ We are conducting this work for the Subcommittee on Oversight
and Investigations, Committee on Energy and Commerce, House of
Representatives.
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dhs has made some progress in implementing technologies to improve
container security
Container Security Technologies Are Intended to Detect Intrusion and
Track Movement
As we reported in September 2010, DHS's Science and Technology
Directorate (S&T) initiated four container security technology
projects,\23\ in part, in response to general MTSA requirements,\24\ as
well as CBP's need for technologies to detect intrusion and track the
movement of containers through the supply chain.\25\ Specifically, a
CBP study recognized that existing container seals provided inadequate
security against physical intrusion (e.g., removing a container door to
bypass a container seal) and therefore CBP should develop a technology
to monitor and record intrusions on any of the six sides of a
container. In September 2010, we reported that DHS had conducted
research and development for these projects, but had not yet developed
performance standards for them. Specifically, each project had
undergone laboratory testing, but S&T had not yet conducted testing in
an operational environment to ensure that the prototypes for those
projects that had passed laboratory testing would function as intended.
Furthermore, S&T's plans for conducting operational testing, did not
reflect all of the operational scenarios being considered for
implementation. We recognized that successfully testing the performance
of these technologies is a precursor to developing performance
standards for them; therefore, we recommended that DHS test and
evaluate the technologies within all of the operational scenarios DHS
identified for potential implementation before S&T provides performance
standards to the Office of Policy Development and CBP--DHS concurred
with our recommendation and has completed operational testing for two
of the four container security technology projects in the maritime
environment.\26\ S&T officials considered the laboratory and
operational testing of both technology projects a success because they
were proven to function under one operational scenario, which resulted
in the development of performance standards that are necessary to
pursue implementation of these technologies. To fully address our
recommendation, however, DHS would need to test and evaluate the
technologies within each of the remaining operational scenarios it
identified for potential implementation. DHS has informed us that it
plans to conduct further operational testing and anticipates completing
this testing in May 2013.
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\23\ Two of the four container security technology projects were to
detect intrusion on all six sides of a container; one of them was to
detect intrusion on one side (i.e., the door); and, one of them was to
track containers and communicate the intrusion to the appropriate
officials.
\24\ See 46 U.S.C. 70116 (requiring a program that includes
establishing standards and procedures for securing and monitoring cargo
in transit, as well as performance standards to enhance the physical
security of shipping containers, including standards for seals and
locks).
\25\ GAO, Supply Chain Security: DHS Should Test and Evaluate
Container Security Technologies Consistent with All Identified
Operational Scenarios to Ensure the Technologies Will Function as
Intended, GAO-10-887 (Washington, DC: Sept. 29, 2010).
\26\ Laboratory and operational testing has been completed for the
project to detect intrusion through the door of the container and the
project to track containers and communicate intrusions.
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We also reported on the challenges DHS and CBP could face regarding
the implementation of the four container security technology
projects.\27\ For example, DHS and CBP could face challenges in
obtaining support from the trade industry and international partners as
it pursues implementation of the security technologies. Specifically,
some members of the trade industry we spoke with were resistant to
purchasing and using the technologies given the number of container
security programs with which they already have to comply. DHS will also
need to obtain support from international organizations and the WCO to
implement new container security technologies. For instance, for
container security technologies to be admitted to foreign countries
without being subject to import duties and taxes, as well as import
prohibitions and restrictions, the technologies first have to be
recognized as accessories and equipment of the containers under the
Customs Convention on Containers.\28\ The successful implementation of
security technologies also depends on the security procedures
throughout the supply chain as well as people engaged in those
procedures, which are typically documented in the concept of
operations. As a result, DHS and CBP could face challenges developing a
feasible concept of operations that addresses the necessary technology
infrastructure needs and protocols. Container security technologies
require a supporting technology infrastructure, including readers to
communicate to customs officials whether a technology has identified an
intrusion. Thus, CBP will be faced with determining who will have
access to the container security technologies through readers, where to
place these readers, and obtaining permission to install fixed readers
at domestic and foreign ports. Also, protocols will need to be
developed to identify which supply chain participants will be involved
in arming and disarming the technologies, reading the status messages
generated by the technologies, responding to alarms, and accessing
data.
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\27\ GAO-10-887.
\28\ The convention essentially provides for the temporary and
admission and reexportation of containers and their accessories and
equipment that meet certain requirements without imposition of duties
or taxes by any customs authority.
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Radiation Detection and Nonintrusive Imaging Technology Can Help
Identify Container Contents
To prevent the smuggling of nuclear and radiological materials, as
of September 2010, CBP in coordination with DHS's Domestic Nuclear
Detection Office (DNDO), has deployed over 1,400 radiation portal
monitors (RPM) at U.S. ports of entry. Most of the RPMs are installed
in primary inspection lanes through which nearly all traffic and
shipping containers must pass before they can exit U.S. ports. These
monitors alarm when they detect radiation. CBP then conducts further
inspections of the suspect contents at its secondary inspection
locations to identify the cause of the alarm and determine what further
security measures, if any, need to be taken.
While these RPMs are sensitive and have been effective at detecting
radiation, they also have limitations. In particular, in May 2009 we
reported that RPMs are capable of detecting certain nuclear materials
only when these materials are unshielded or lightly shielded.\29\ In
contrast, advanced nonintrusive inspection equipment can be used to
detect dense material that may be consistent with the presence of
certain nuclear materials. CBP already uses nonintrusive inspection
equipment to more closely investigate the contents of cargo containers
that it has selected for secondary inspection at a U.S. port of entry;
however, according to CBP officials, only a small percentage of
vehicles or cargo containers are subjected to secondary inspections.
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\29\ GAO, Combating Nuclear Smuggling: DHS Improved Testing of
Advanced Radiation Detection Portal Monitors, but Preliminary Results
Show Limits of the New Technology, GAO-09-655 (Washington, DC: May 21,
2009).
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Since 2006, we have been reporting on long-standing problems with
DNDO's efforts to deploy advanced spectroscopic portal (ASP) radiation
detection monitors, a more-advanced and significantly more-expensive
type of RPM designed to replace the RPMs CBP currently uses. GAO last
reported on ASP testing in 2009 and found that DHS's cost analysis of
the ASP program did not provide a sound analytical basis for DHS's
decision to deploy the portals.\30\ We also reported that an updated
cost-benefit analysis might show that DNDO's plan to replace existing
equipment with ASPs was not justified, particularly given the marginal
improvement in detection of certain nuclear materials required of the
ASP and the potential to improve the current-generation RPM's
sensitivity to nuclear materials, most likely at a lower cost.\31\ DNDO
officials stated that they planned to update the cost-benefit analysis;
however, after spending more than $200 million on the program, in
February 2010, DHS announced that it was scaling back its plans for
development and use of the ASP, and subsequently announced in July 2011
that it was ending the ASP program, which means DHS continues to face
limitations in radiation detection. Since DNDO continued ASP testing
through 2011, GAO has on-going work to review, among other things, the
results of testing of ASP since 2009, lessons learned from the ASP
program, and whether DNDO plans to conduct additional ASP testing in
the future.\32\
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\30\ GAO, Combating Nuclear Smuggling: Lessons Learned from DHS
Testing of Advanced Radiation Detection Portal Monitors, GAO-09-804T
(Washington, DC: June 25, 2009).
\31\ GAO, Homeland Security: DHS Could Strengthen Acquisition and
Development of New Technologies, GAO-11-829T (Washington, DC: July 15,
2011).
\32\ We are conducting this work for the Ranking Members of the
Subcommittee on Investigations and Oversight and Subcommittee on Energy
and Environment; Committee on Science, Space, and Technology; House of
Representatives.
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Since 2005, DNDO was also engaged in trying to develop a more
advanced non-intrusive inspection equipment system in order to detect
nuclear materials that might be heavily shielded. In September 2010, we
reported that DNDO was simultaneously engaged in the research and
development phase while planning for the acquisition phase of its cargo
advanced automated radiography system (CAARS) to detect certain nuclear
materials in vehicles and cargo containers at ports.\33\ DNDO pursued
the acquisition and deployment of CAARS machines without fully
understanding that they would not fit within existing primary
inspection lanes at CBP ports of entry. We reported that this occurred
because, during the first year or more of the program, DNDO and CBP had
few discussions about operating requirements. DHS spent $113 million on
the program since 2005 and canceled the development phase of the
program in 2007.
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\33\ GAO, Combating Nuclear Smuggling: Inadequate Communication and
Oversight Hampered DHS Efforts to Develop an Advanced Radiography
System to Detect Nuclear Materials, GAO-10-1041T (Washington, DC: Sept.
15, 2010).
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cbp works with foreign governments, the private sector, and
international organizations to implement supply chain security efforts
As part of its risk-management approach, CBP operates two voluntary
security programs--the Container Security Initiative (CSI) and the
Customs-Trade Partnership Against Terrorism (C-TPAT).\34\ CSI, through
partnerships with CBP's foreign counterparts, is designed to target and
examine high-risk container cargo as early as possible in the global
supply chain. CSI places CBP officers at select foreign seaports to
work with host-country customs officials to identify and scan high-risk
cargo before it is shipped to the United States. CBP launched CSI in
January 2002, and in fiscal year 2007 CBP reached its goal of operating
CSI in 58 foreign seaports, and as of October 2011, these ports
collectively accounted for over 80 percent of the cargo containers
shipped to the United States. In 2005 and 2008, we made recommendations
to CBP to further strengthen the CSI program by, among other things,
revising its staffing model, developing performance measures, and
improving processes for gathering information. CBP generally agreed and
took action to implement these recommendations.\35\ For example, in
response to one of our recommendations, in January 2009, CBP began
transferring CSI staff from overseas ports to perform targeting
remotely from the National Targeting Center--Cargo in the United
States. As part of this effort, foreign staffing levels for CSI
decreased from 170 in January 2009 to 86 in April 2011 while 32
positions were added to the National Targeting Center--Cargo. As a
result of the changes in its overseas staffing model, CBP has
experienced a decrease in operating costs of over $35 million from
fiscal year 2009 through fiscal year 2011.
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\34\ For more information on CSI and C-TPAT, see GAO, Supply Chain
Security: CBP Works with International Entities to Promote Global
Customs Security Standards and Initiatives, but Challenges Remain, GAO-
08-538 (Washington, DC: Aug. 15, 2008).
\35\ 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, DC: Jan. 25,
2008) and GAO, Container Security: A Flexible Staffing Model and
Minimum Equipment Requirements Would Improve Overseas Targeting and
Inspection Efforts. GAO-05-557 (Washington, DC: Apr. 26, 2005).
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While the CSI program involves partnerships between CBP and foreign
governments, the C-TPAT program is a Government-to-business partnership
program that provides benefits to supply chain companies that comply
with predetermined security measures. Under C-TPAT, CBP officials work
with private companies to review their supply chain security plans and
improve members' security measures. In return, C-TPAT members may
receive benefits, such as reduced scrutiny or expedited processing of
their shipments. CBP initiated C-TPAT in November 2001, and as of
November 2010, CBP had awarded initial C-TPAT certification--or
acceptance of the company's agreement to voluntarily participate in the
program\36\--to over 10,000 companies.\37\ C-TPAT certified members are
then subject to validation whereby CBP verifies that the members'
security measures meet or exceed CBP's minimum security requirements.
We previously reported that C-TPAT provides CBP with a level of
information sharing that would otherwise not be available from non-
member companies.\38\ In 2008, we made recommendations to CBP to
strengthen C-TPAT program management, in part, by developing
performance measures and improving the process for validating security
practices of C-TPAT members. CBP has since implemented these
recommendations.\39\
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\36\ Acceptance occurs after a review of the company's security
profile and compliance with customs laws and regulations.
\37\ Aside from maritime container shippers, C-TPAT members include
many top air carriers and freight forwarders.
\38\ GAO, Supply Chain Security: Feasibility and Cost-Benefit
Analysis Would Assist DHS and Congress in Assessing and Implementing
the Requirement to Scan 100 Percent of U.S.-Bound Containers, GAO-10-12
(Washington, DC: Oct. 30, 2009).
\39\ 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, DC:
Apr. 25, 2008).
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CBP also partners with international trade and security groups to
develop supply chain security standards that can be implemented by the
international community. In 2005, the WCO developed the Framework of
Standards to Secure and Facilitate Global Trade--commonly referred to
as the SAFE Framework--for which the core concepts are based on
components of CBP's CSI and C-TPAT programs. As of the publication of
the most recent edition of the SAFE Framework in June 2011, 164 of the
177 WCO member countries have pledged to adopt the framework. As part
of the SAFE framework, customs administrations may develop Authorized
Economic Operator programs that offer incentives to supply chain
companies that comply with predetermined minimum security standards.
For example, C-TPAT is the designated Authorized Economic Operator
program for the United States. According to data from the WCO, as of
May 2011, 59 countries, including the 27 member states of the European
Union, have implemented or have begun developing Authorized Economic
Operator programs.\40\
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\40\ For more information on the WCO Authorized Economic Operator
Program, see World Customs Organization, Compendium of Authorized
Economic Operator Programme, 2011 edition.
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CBP and the WCO anticipate that widespread adoption of these
standards could eventually lead to a system of mutual recognition
whereby the security-related practices and programs taken by the
customs administration of one country are recognized and accepted by
the administration of another. According to CBP, a system of mutual
recognition could lead to greater efficiency in providing security by,
for example, reducing redundant examinations of container cargo and
avoiding the unnecessary burden of addressing different sets of
requirements as a shipment moves through the supply chain in different
countries. As of June 2011, CBP has signed five Mutual Recognition
Arrangements and is currently working toward two more with other
customs administrations, according to CBP.\41\
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\41\ CBP has signed the five Mutual Recognition Agreements with
customs administrations of New Zealand, Canada, Jordan, Japan, and
South Korea and is working toward more with those of Singapore and EU.
For more information, see Department of Homeland Security, Customs and
Border Protection, ``Mutual Recognition Information,'' Customs-Trade
Partnership Against Terrorism website, (June 2011), accessed January
24, 2012, www.cbp.gov/xp/cgov/trade/cargo_security/ctpat/mr/.
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as the deadline for 100 percent scanning approaches, uncertainty
persists over the future of 100 percent scanning
The Scope of the Secure Freight Initiative Has Decreased after Facing
Numerous Challenges
In response to the SAFE Port Act requirement to implement a pilot
program to determine the feasibility of scanning 100 percent of U.S.-
bound containers with both radiation detection and nonintrusive
equipment, CBP, the Department of State, and the Department of Energy
jointly announced the formation of the Secure Freight Initiative (SFI)
pilot program in December 2006. CBP selected three ports to implement
the SFI pilot program: Qasim, Pakistan; Puerto Cortes, Honduras; and
Southampton, United Kingdom.
In October 2009, we reported that while CBP and the Department of
Energy had made progress in integrating new technologies as part of the
SFI program, progress in implementing and expanding the scanning of
U.S.-bound cargo containers at participating ports was limited.
Specifically, according to CBP officials, while initiating the SFI
program at these ports satisfied the SAFE Port Act requirement to
implement the program at three ports,\42\ CBP also selected the ports
of Hong Kong; Busan, South Korea; and Salalah, Oman to more fully
demonstrate the capability of the integrated scanning system at larger,
more complex ports with higher percentages of transshipment container
cargo--cargo containers from one port that are taken off a vessel at
another port to be placed on another vessel bound for the United
States. However, these ports faced numerous challenges in implementing
the 100 percent scanning requirement, as we reported in October 2009,
and some ports that initially agreed to participate in the SFI program
did so for a limited time, or on a limited basis.\43\ For example, the
SFI program began operating in one of the nine terminals at the port of
Hong Kong in January 2008 and ended in April 2009. The SFI program was
not renewed at the port of Hong Kong based on a mutual decision by the
Hong Kong government and DHS, in part, because of concerns that
equipment and infrastructure costs, as well as costs to port
efficiency, would make full implementation of the SFI program at all of
its terminals unfeasible. CBP has since reduced the scope of the SFI
program, and currently the only port that continues to operate under
SFI protocols is Qasim, Pakistan.
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\42\ The act required CBP to identify three distinct ports through
which containers pass or are transshipped to the United States with
unique features and differing levels of trade volume.
6 U.S.C. 981(a).
\43\ GAO-10-12.
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Logistical, technological, and other problems at participating
ports have prevented any of the participating ports from achieving 100
percent scanning, as ultimately required by the 9/11 Act, leaving the
feasibility and efficacy of 100 percent scanning largely unproven. For
example, we reported in October 2009 that while CBP had been able to
scan a majority of U.S.-bound cargo containers from three comparatively
low-volume ports (Qasim, Puerto Cortes, and Southampton), at the higher
volume ports of Hong Kong and Busan, CBP had been able to scan no more
than 5 percent of U.S.-bound cargo containers, on average.
Additionally, scanning operations at the initial SFI ports encountered
a number of challenges--including safety concerns, logistical problems
with containers transferred from rail or other vessels, scanning
equipment breakdowns, and poor-quality scan images. Furthermore, since
the 9/11 Act did not specify who is to conduct the container scans or
who is to pay for scanning equipment or operations and maintenance,
questions persist regarding who will bear the costs of scanning.
In addition to the challenges CBP faced in implementing 100 percent
scanning at the select SFI pilot ports, CBP also faces a number of
potential challenges in integrating the 100 percent scanning
requirement with the existing container security programs that make up
CBP's layered security strategy. The 100 percent scanning requirement
is a departure from existing container security programs in that it
requires that all containers be scanned before CBP determines their
potential risk level.\44\ Senior CBP officials and international
trading partners say this change differs from the risk-based approach
based on international supply chain security standards and accepted
practices. Specifically, as we reported in October 2009 and October
2010, foreign government officials have expressed the view that 100
percent scanning is not consistent with risk-management principles as
contained in the SAFE Framework.\45\ For example, European and Asian
customs officials we spoke with told us that the 100 percent scanning
requirement is in contrast to the risk-based strategy, which serves as
the basis for other U.S. programs, such as CSI and C-TPAT. Further, the
WCO, which represents 177 customs agencies around the world, stated
that the implementation of 100 percent scanning would be ``tantamount
to abandonment of risk management.'' Some foreign governments have
stated they may adopt a reciprocal requirement that all U.S.-origin
containers be scanned, which would present additional challenges at
domestic U.S. ports.
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\44\ For more information regarding the application of risk-
management principles as they relate to 100 percent scanning, see GAO,
Maritime Security: Responses to Questions for the Record, GAO-11-140R
(Washington, DC: Oct. 22, 2010), 17-20.
\45\ GAO-11-140R.
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We recommended that CBP perform analyses to determine whether 100
percent scanning is feasible, and if so, the best way to achieve it;
or, alternatively, if it is not feasible, present acceptable
alternatives. To date, however, CBP has not conducted such a
feasibility assessment. CBP has not pursued a feasibility assessment,
in part, due to the interagency effort to develop the recently issued
National Strategy for Global Supply Chain Security. CBP officials told
us in August 2011 that the agency's position was that a risk-based
approach to global supply chain security was a more feasible and
responsible approach than 100 percent scanning.\46\ Further, CBP has
not provided any details about any alternatives to 100 percent scanning
that DHS or CBP may be considering.
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\46\ Additionally, according to CBP, the current SFI budget is
focused on maintaining operations at the remaining SFI port in Qasim,
Pakistan, and funds are not presently available to conduct a
feasibility assessment. The current funding levels may be attributed,
in part, to CBP's request to reduce funding for the SFI program. In
CBP's fiscal year 2011 budget justification, CBP requested a reduction
$16.6 million due to plans to revert three of the SFI ports to CSI
operations.
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DHS Intends to Issue a Blanket Extension Because 100 Percent Scanning
Cannot be Implemented by the July 2012 Deadline
CBP's budget documents and public statements from DHS and CBP
officials, along with the elimination of SFI operations at all but one
port, indicate that DHS and CBP are no longer pursuing efforts to
implement 100 percent scanning at foreign ports by July 2012. While CBP
had previously implemented the SFI program and protocols for 100
percent scanning at six ports, it has reverted all but one of these
ports to CSI operations, for which CBP focuses its efforts on scanning
those cargo containers it identifies as high risk rather than
requesting scans of all containers regardless of risk. According to
CBP's fiscal year 2011 budget justification, the SFI program is a
``helpful but not essential part'' of CBP's layered security strategy.
In addition, the budget justification noted that DHS will continue
to use and, when appropriate, strengthen other means to achieve the
same goals of SFI, such as the 24-hour rule, the 10+2 rule, and C-TPAT.
Further, there is no mention of the 100 percent scanning mandate or
efforts to meet the mandate in the recently released National Strategy
for Global Supply Chain Security. Rather, the strategy notes that the
Federal Government intends to focus its efforts on ``those enhancements
that result in the most significant improvement or reduction in risk.''
As the July 2012 deadline in the mandate approaches, uncertainty
remains regarding DHS's long-term course of action to satisfy the 100
percent scanning mandate. As we previously reported, in the short term,
DHS acknowledged it will not be able to meet this deadline for full-
scale implementation of the 9/11 Act's scanning requirement and will
need to grant extensions to those foreign ports unable to meet the
scanning deadline in order to maintain the flow of trade and comply
with the 9/11 Act. The 9/11 Act allows DHS to grant an extension to a
port or ports by certifying that least two of six conditions exist,\47\
and as we previously reported, DHS believes the last two conditions--
(1) Use of the equipment to scan all U.S.-bound containers would
significantly impact trade capacity and the flow of cargo and (2)
scanning equipment does not adequately provide automatic notification
of an anomaly in a container--could apply to all foreign ports that
ship containers to the United States. Therefore, DHS expects to grant a
blanket extension to all foreign ports pursuant to the statue, thus
extending the target date for compliance with this requirement by 2
years, to July 2014. To do so, the 9/11 Act requires DHS to report to
Congress 60 days before any extension takes effect on the container
traffic affected by the extension, the evidence supporting the
extension, and the measures DHS is taking to ensure that scanning can
be implemented as early as possible at the ports covered by the
extension.\48\ As a result, DHS will need to notify Congress by May 2,
2012, of any extensions it plans to grant.\49\
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\47\ The 9/11 Act scanning requirement authorizes DHS to grant
extensions for a port or ports if at least two of the following six
conditions exist: (1) Equipment to scan all U.S.-bound containers is
not available for purchase and installation; (2) equipment to scan all
U.S.-bound containers does not have a sufficiently low false alarm
rate; (3) equipment to scan all U.S.-bound containers cannot be
purchased, deployed, or operated at a port or ports (including where
this is due to the physical characteristics of the port); (4) equipment
to scan all U.S.-bound containers cannot be integrated with existing
systems; (5) use of the equipment to scan all U.S.-bound containers
would significantly impact trade capacity and the flow of cargo; or (6)
the scanning equipment does not adequately provide automatic
notification of an anomaly in a container. 6 U.S.C. 982(b)(4).
\48\ 6 U.S.C. 982(b)(6).
\49\ Additionally, 1 year after an extension takes effect, DHS
would be required to submit a report on Congress on whether it expects
to seek to renew the extension. 6 U.S.C. 982(b)(7).
---------------------------------------------------------------------------
Given that the feasibility of 100 percent scanning remains unproven
and DHS and CBP have not yet identified alternatives that could achieve
the same goals as 100 percent scanning, uncertainty persists regarding
the scope of DHS's and CBP's container security programs and how these
programs will collectively affect the movement of goods between global
trading partners.
Chairwoman Miller, Ranking Member Cuellar, and Members of the
subcommittee, this completes my prepared statement. I would be happy to
respond to any questions you or other Members of the subcommittee may
have at this time.
Mrs. Miller. Thank you very much, Mr. Caldwell.
That was an interesting testimony, and leads to the obvious
question, I guess, and the reason for this entire hearing, as
we listened to the first three witnesses talk about all of the
various things that have been on-going in the efforts to make
sure that we secure the global supply chain, and giving us
statistics, et cetera, which are very impressive, based on the
workload and the resources available, to be able to accommodate
the 100 percent mandate that this Congress has passed.
I guess I would just start by, you were mentioning, Mr.
Caldwell, by saying that you had made the recommendation for
them to do cost/benefit, risk analysis, et cetera, et cetera,
that perhaps if they would have taken some of those
recommendations and actually done some of those kinds of
things, we would be a little bit further ahead.
But overtaken by events. Believe me, we all understand
that. We totally understand that. The purpose of this hearing
is just to have a better idea of what kind of events have
overtaken us, but whether or not we have any realistic
expectation of ever getting to the 100 percent, or if it is
even that it is not achievable, as the Secretary has made
testimony to this committee on a number of occasions, where do
we actually go from here?
I guess I am, first of all, just trying to understand from
a cost--we all recognize it may be optimal but perhaps not
realistic from a cost perspective. We have 55 ports in our
country, of which there are I think about 700 ports where there
is country of origin goods coming into our country.
Do we have any idea at all of what kind of costs we may be
looking at, any kind of ballpark figure, in order to--I am not
sure who I am actually directing this question to.
Gentlemen, do we have any idea at all of what kind of costs
that we are actually looking at, understanding the budgetary
constraints that our Nation is facing, but the goal of securing
our Nation being our priority as well?
Who might start with answering that question?
Mr. Heyman. Let me start by just talking about what the
costs that we have to include in that, and then go to some of
the specific operational. There are a number of things that we
have looked at in terms of the entirety, from end to end,
questions about security and resilience.
The implementation of going back to the supply chain, to
the manufacturers, and things like C-TPAT, require auditing of
facilities and partners to ensure that they are adhering to the
security requirements of C-TPAT.
The ports of embarkation require Coast Guard to go and
ensure that the international codes have been adhered to, that
safety and security for procedures are in place, that
counterterrorism programs are in place.
The actual scanning of material, cargo in containers that
CBP has, and other programs within the Federal Government,
requires that partnerships in foreign countries, with foreign
governments. It requires the advanced targeting capability.
Then also, we have the capability at home for screening. So
there is technology costs and operational costs. All of those
things are so broad and so large that estimate have been not as
accurate as people would like.
Mrs. Miller. I am not looking for an accurate estimate,
just a ball park.
Mr. Heyman. So this is in the billions and billions of
dollars. But let me turn to my CBP colleague, who has the
operational arm of that, to actually go into some of the
operational costs.
Mr. McAleenan. From an operational perspective, we do have
some significant experience in terms of the cost of these
programs, from these six SFI pilots that we have ran.
Over the course of the 2.5 to 3 years that those pilots
were active--and of course, we still have one additional active
location in Port Qasim in Pakistan. The DHS alone spent about
$68 million on the scanning equipment, on the deployment of it,
on software upgrades and all the relevant costs associated with
that.
At the same time, our partners at DOE, who are responsible
for the radiation and nuclear detection capability aspect of
the SFI program, they spent over $50 million. So the total
Government expenditures was almost $120 million on those six
ports for the short time it was in operation.
Based on our estimates from that experience, we estimate
about $8 million per lane, to establish the SFI-type, 100
percent scanning, screening suite of technologies. Now that
technology might be improving over time. We are still studying
that.
But if you multiply that by the 2,100 lanes at the 700
ports globally that ship direct to the United States, that is
quite cost-prohibitive, you know, up to the $20 billion range.
The other aspect of that----
Mrs. Miller. $20 billion?
Mr. McAleenan. Correct, $16.8. The other aspect of that
that the assistant secretary mentioned is the cost to the
trade. Those estimates have been very high, both in studies
from our private sector partners, as well as the European Union
and others.
Mrs. Miller. Okay. I guess I would also ask you, Mr.
McAleenan, I was taking some notes here when you were talking
about your risk assessments, or the modeling that you are
doing. Algorithms, I guess, is the types of things that you are
all looking at there.
But one of the things that you were mentioning, if you
could just flesh out for me a little bit, is how you gather the
information. Then you are looking at targeting technologies
from the port of origin, et cetera.
Could you talk a little bit more about what kinds of
things, targeting technologies you utilize to make the risk
assessments?
Mr. McAleenan. Yes, I would be happy to cover that. That is
an area of excellence we think that CBP has, in coordination
with our intelligence community and other DHS and law
enforcement partners.
We take information on cargo shipments as early as possible
in the process, both through the 24-hour rule, established
after the Trade Act of 2002, as well as the ISF, the Importer
Security Filing, the 10+2.
We take that information on shipments, combine it with what
we know about the supply chain, the shippers involved in the
supply chain, from our trade partnership programs, the C-TPAT,
as well as historical data on shipments on certain routes, from
certain countries. We manipulate that data using our automated
targeting system in a series of sophisticated ways.
One of the most common that we have talked about is our
intelligence-based rules. These are specific rule sets that are
designed to address each mode. They have different rule sets,
for instance, for maritime versus land, air and rail, to
identify potential security risks.
We also are using advanced analytic techniques. This is
pattern recognition, what is typically called machine learning
in the field, to help us model our risk more effectively,
beyond just the intelligence-based process.
Of course, we use what we know about the supply chain with
our trusted partners, to help reduce the potential for risk on
those shipments, as well as the procedures used at the foreign
port. So all of that is factored in in an automated fashion, to
give us a sense of the risk of individual shipments.
We do that both at our National Targeting Center for Cargo
and with our CSI teams deployed abroad.
Mrs. Miller. Thank you.
My time has expired. But I appreciate your candid
information about your best guesstimate about what kind of
costs we are looking at, because really it is our job, as
Congress, to ask you how much does it cost for you to implement
mandates that we are passing.
We need to have a clear understanding of what it is, and
understanding the budgetary constraints that we are all dealing
with here. Then it is for us to determine, from a priority
standpoint, where we are going with our budget here and from
National security perspective as well.
With that, I would recognize our Ranking Member.
Mr. Cuellar. Thank you, Madam Chairwoman.
Mr. Caldwell, you are with the GAO, correct?
Okay. You have been studying the maritime cargo security
issue for some time. You know both the legislative requirement,
as well as the challenges of scanning 100 percent of in-bound
containers.
In hindsight, what different courses could have DHS or CBP
have taken to comply with the law?
Mr. Caldwell. I think in terms of actually setting up the
pilot, there could have been more metrics set up to actually
measure how long it was taking, the costs, what impact it was
having on trade at those individual ports.
I think related to this, they could have come up perhaps
with better and validated data on costs, which is still an
issue, as we have just discussed. I think, again, if a
feasibility analysis, cost/benefit analysis had been done
earlier in the process--and it is unclear whether it is ever
going to be done at this point--I think it would have made a
position to provide specific legislative changes and engage
with Congress perhaps earlier.
You know, it is very awkward obviously to do this right
before this deadline is approaching in July 2012.
Mr. Cuellar. Did GAO communicate those recommendations to
the Department of Homeland, to CBP, Coast Guard?
Mr. Caldwell. Yes, we did, particularly with these points
the DHS. But they were mainly geared toward CBP, which had the
lead in terms of these container programs. So these were
recommend in our October 2009 report. We had started talking to
DHS earlier, perhaps spring of 2009, about the need for these.
Mr. Cuellar. Okay. Both CBP and Homeland, what do you all
do with recommendations from GAO? Do you just get the
recommendations and put them aside?
I am sure you are going to say that you do something with
them. But it seems like, you know, I see GAO or an entity like
that, that they come with ideas to improve. Then you look at
and say, well, this will work; this won't work. You have that
dialogue.
But sometimes I get the feeling, with all due respect, that
you all know better than anybody else. If you get something
from GAO, it is some theoretical, academic report that comes
out. What do you actually do with those?
I mean, Mr. Caldwell just mentioned that there were some
recommendations. What did you all do with those specific
recommendations in 2009? I agree, there is a deadline that is
coming up in July of this year. We are coming up to that.
What did you all actually do with those recommendations?
Keep in mind, as we are going through this discussion, you
know, I am a former businessman. Certainty is important.
In the international business community, not knowing what
CBP is going to do, what is going to happen, it affects the
certainty. That affects our economy.
What did you all do specifically with the recommendations?
Mr. Heyman. So let me answer the general question first,
which is what do we do with GAO reports, in terms of the
process of adhering to them or not.
We actually have instituted, about 2.5, 3 years ago, a very
synchronized dance, in effect, with GAO, where we are trying to
get in early. They are trying to get in early to understand the
problems. So we are working very closely together.
There is a whole read-in process, where we are all working
with them to get them as much data as possible.
On the back end of it, when you are actually implementing--
when the GAO is finishing its recommendations, we have given an
opportunity to concur or not concur and how we all do it.
We do that in every report. We don't concur with all of the
things that they recommend, but we usually provide what kind of
corrective action or steps that we all be taking. GAO then
follows up, often, with whether we have done that or not.
So there is a process there that we do.
In terms of the cost estimates, the specific question about
the cost estimates and how we can do better, by the time I
think that report came out, most of the pilot projects had been
concluded. Either governments had said they weren't going to
continue to implement or they actually had concluded for other
reasons.
So actually getting those cost estimates we have--that is
the best that we have right now, is from that original data.
Mr. Cuellar. Okay.
Mr. Caldwell, just roughly, out of the recommendations that
you all made, on a 1 to 100 scale, what percent do you think
they implemented?
I understand there is a give-and-take. They are not going
to accept everything 100 percent. But, I mean, the way I see
GAO or inspector general, somebody that comes up with ideas--I
see it as a way to improve. You know, how do we make it better,
not accepting everything 100 percent.
What would you say on a 1 to 100 scale, roughly?
Mr. Caldwell. Well, I would say that, you know, our goal
within GAO, for example, engaging with the Executive Branch--
and this is true with DHS as well--is to get 80 percent of our
recommendations implemented.
Mr. Cuellar. In this specific case, what did they get,
roughly?
Mr. Caldwell. This year, we are not doing very well. Of the
I think five recommendations we have, we maybe have two of them
partial and the other three--I think also, I mean, one of the
recommendations we made that they do a feasibility study, I
mean, was a statutory requirement in the SAFE Port Act. It was
not just GAO recommendations.
Mr. Cuellar. So you are saying that on that recommendation,
it was a recommendation from your own. There was a statutory
requirement, and they have not done it yet?
Mr. Caldwell. That is correct.
Mr. Cuellar. Okay. Let me----
Mr. Caldwell. There are pieces of it, but they need to pull
it together. I think the important thing is some of that
analysis that feeds that will be important even if we do the
blanket waivers, because under the waiver procedure, there is
still a reporting requirement that DHS talk about how they plan
to achieve--you know, what they are doing to still trying to
achieve the 100 percent scanning, and if not, why not?
So that is still some of the justification they are going
to need in that analysis, sir.
Mr. Cuellar. Right. I think, Madam Chairwoman, Members,
this is a difficulty, when there is a recommendation; there is
a statutory requirement. How do we get your buy-in into this?
One last question, if you don't mind. In regards to the
interim Final Supply Chain Security Strategy, required by the
SAFE Port Act, the 2007 strategy was--the interim was 128 pages
long.
It included details on topics such as defining the problem,
strategic objectives, the role of technology, the agency,
stakeholders roles and responsibilities, implementation of
schedule, priorities and milestones, recovery and resumption of
trade, training and exercise requirement.
But the report we just got last month had only 6 pages,
which means that there was very little discussion of those
topics. I don't understand. Usually when you do an interim
report, you build on it.
In this one, you build and you took away. I just don't
understand how that comparison was made.
Again, my time is up. But I will take whoever wants to take
this one. Mr. Heyman, how do you explain this discrepancy? Or
not discrepancy, but how do you go from detail to now a 6-page
and I think the first page was more of an executive summary?
It was a managing report of a summary of a summary. So how
do you explain that? How do you build down instead of building
up?
Mr. Heyman. Sir, it is a good question. I would just note--
--
Mr. Cuellar. By the way, you saw the other 6 pages. This is
the interim report. Then the interim report, 127, 128 pages.
You build up on the other one.
Again, I am not saying--maybe this is a perfect example of
streamlining and efficiency and effectiveness. But how do you
go from an interim that goes into the details that we want to
see as oversight, and then come up with this report here?
Mr. Heyman. So there is a couple--if I may take a little
bit of time on that answer, there is a couple things that we
have done differently here than the interim report that should
be noted.
First of all, the scale of the report goes beyond just the
maritime. It goes into all modes of transportation. It includes
resilience as a critical element. It also looks to
international engagement on a way that is, frankly,
unprecedented.
What we have done in the strategy document is to talk about
building on these previous documents. So rather than
regurgitate all of them, we tried to make it as simple and as
straightforward as possible. That doesn't mean that there isn't
more back--there is more behind it.
There are implementation things that we are working on. We
have a report to the president that we owe in a year, and
things like that. I would hope that we wouldn't get lost in the
length of it.
In fact, you know, I think Eisenhower's strategy for World
War II was two words, which was ``Europe first.'' But we have a
lot of things that go beyond that.
We are, in fact, actually implementing now things like the
Supply Chain Security Initiative the Secretary put forward,
that fits into the global strategy the President put forward.
All those things come together.
Mr. Cuellar. Yes. I can summarize two words into one:
``win''. But what I am saying is this is something that should
be a guideline to what we are doing. I am just a little
disturbed by what I am seeing here, especially recommendations
from Mr. Caldwell, and not meeting a lot of them.
But again, Madam Chairwoman, I thank you for indulging me
on this very important issue. Thank you.
Mrs. Miller. Thank the gentleman.
The Chairwoman will now recognize the Ranking Member of the
full committee, Mr. Thompson.
Mr. Thompson. Thank you very much, Madam Chairwoman.
Mr. McAleenan--McAleenan, okay--the goal of this
Congressional law was to give us, within a reasonable period of
time, 100 percent scans on container shipments coming to the
United States.
Where are we at this point in that 100 percent?
Mr. McAleenan. In terms of the total percentage, sir?
Mr. Thompson. Yes.
Mr. McAleenan. Okay. Our CSI program covers 80 percent of
global trade to the United States. In terms of the actual
scanning, we do about 45,000 inspections last year through our
CSI ports prior to loading on vessels. That is a little bit
less than 1 percent of the total cargo headed to the United
States.
Then we scan an additional 4 percent upon arrival
domestically in the United States.
Mr. Thompson. All right. In layman's terms, what percent
cargo that is coming to the United States right now is not
scanned?
Mr. McAleenan. In the maritime environment, sir, in terms
of physical scanning, that would be the vast majority, over 95
percent.
Mr. Thompson. All right. Why not?
Mr. McAleenan. Well, we have been discussing with you, sir,
and your committee for several years the complexities of this
process and the tests that we have undertaken with SFI to
examine the feasibility of the physical scanning, in
particular.
At the same time, we have been aggressively pursing the
layered approach, focused on the targeting and intel,
coordination through CSI with our foreign partners, conduct
those exams on high-risk shipments before they are loaded,
working with international community on standards----
Mr. Thompson. I understand.
Mr. McAleenan [continuing]. So forth.
Mr. Thompson. Taking whatever you are doing to--whether it
is high-risk shipments or anything like that, at this point in
this hearing today, is there any shipments using your protocol
that is coming to the United States that we don't know what is
in it?
It is not a complex--of what you are saying--is the layered
approach, where you are scanning, where you are taking high-
risk, I want to know what the number is.
Mr. McAleenan. We have stated contents on all shipments
destined to the United States. Through the ISF 10+2 Filing, we
also have the carrier explaining both the location on the
vessel of the container, as well as the container status
message, where it is in the process.
The combination of those two data elements allows us to
identify any un-manifested containers that are on a vessel. We
address those with a carrier upon arrival.
Mr. Thompson. Wait, wait, wait. Hold, hold it.
So your testimony to this committee is that there is no
container shipment coming to the United States that we don't
know what is in it?
Mr. McAleenan. Sir, I think that is too strong a statement.
What I have explained is that we have requirements----
Mr. Thompson. I understand requirements. Are you doing 90
percent? Are you doing 85 percent? Are you doing 95 percent?
I want to know where we are toward 100 percent standard.
Whatever protocols you are using, that is fine. But I want to
know where the gaps are right now.
Mr. McAleenan. There are very little gaps on information.
We have very high compliance with----
Mr. Thompson. Well, what is the little. Give me the little.
Mr. McAleenan. The 24-hour-rule compliance is over 99
percent. ISF compliance, as a relatively new program, that is
at 92 percent.
That is where we get the information on the cargo shipments
in the maritime environment. So it is very, very high
compliance on both of those programs.
Mr. Thompson. Mr. Heyman, do you agree with that?
Mr. Heyman. Yes. Almost 100 percent of all things coming to
the United States are known to us, in terms of what is in the
manifest, what is the lading. We then use that information to
do a risk analysis.
Mr. Thompson. So we are 99 percent of the container
shipments that come to the United States, its your testimony
before this committee, meets the requirement that we set forth
in the 2007 law?
Mr. Heyman. No, that is not what I was saying. What I was
answering--the question was whether we knew of all of the stuff
that was coming to the United States. The answer is generally
yes.
Mr. Thompson. When you said knew about--I am not saying of
all the stuff. Do you know what is in the containers?
Mr. Heyman. Yes.
Mr. Thompson. You do?
Mr. Heyman. So the----
Mr. Thompson. At 99 percent?
Mr. Heyman. Yes. The question that the law puts forward is
to whether the information that we receive is accurate, and
whether, in fact, somebody has tried to fraudulently put
material into a container or misrepresent what is in a
container.
That is what we try to identify. In fact, we have done it
to great success. About 11,200 narcotics seizures last year.
Mr. Thompson. No, no. I am not asking for that kind of
data. I am just trying to give the public the confidence that
the law Congress passed saying we want 100 percent, that you
are telling this committee, from what I understand, that you
are 99 percent there.
Mr. Heyman. No, in terms of the 100 percent scanning
mandate, Congressman, that mandate, as we have testified over a
number of times over the last several years, poses significant
operational, diplomatic, financial, and technical challenges.
Mr. Thompson. Well, that is fine. So where are you to do
the 100 percent? What percent along the way are you?
Mr. Heyman. What my colleague has just testified to is that
we are doing approximately 5 percent of the----
Mr. Thompson. You are 5 percent.
Mr. Heyman. Approximately, yes.
Mr. Thompson. All right. So what are we doing for the other
95 percent?
Mr. Heyman. So those are what we have done. They go through
the advanced targeting system to be identified as not part of a
high-risk containers that require additional inspection.
The inspection process, remember, is first to look at
whether the manifest is accurate, second to look at whether
there is any threat information, third to look at the
opportunity for non-intrusive inspection. Then ultimately we
may have to open that up.
That is the most difficult course.
Mr. Thompson. But that is the process DHS put together.
That was not the process that Congress directed.
Mr. Heyman. Actually, that is the process that was put in
place for the pilot project that Congress asked us to do.
Mr. Thompson. Yes, but the pilot projects are done. So you
have now taken that and made that the policy, based on what you
just said.
Mr. Heyman. I am not sure I understand.
Mr. Thompson. Mr. Caldwell, let me ask a question of GAO.
Are you comfortable with the responses you have heard, that 99
percent of the cargo or container shipments coming to the
United States, we know what is; we know what is in it?
Mr. Caldwell. No. Let me maybe interpret what I am hearing
here.
Mr. Thompson. No? Don't interpret it. Just stick with the
facts.
Why are you not?
Mr. Caldwell. For the majority of the containers, we have
the manifest. It doesn't look suspicious, that is where the
scrutiny stops.
Now in many cases, this may be a standard shipment from a
manufacturer overseas into a Target store here in the United
States, maybe towels, textiles, anything else. But as far as
assurance of what we know in there, we have the manifest and
the manifest only.
Mr. Thompson. So other than the manifest, we don't know.
Mr. Caldwell. That is correct, unless there is actual
scanning.
Mr. Thompson. Thank you.
Mrs. Miller. Thank the gentleman.
At this time, the Chairman will recognize the gentleman
from South Carolina, Mr. Duncan.
Mr. Duncan. Thank you, Madam Chairwoman.
Let me just pause to say thank you for arranging a tour of
the Port of Baltimore with Customs and Border Protection and
the Coast Guard recently, where you and I had an opportunity to
witness some of the things that the Ranking Member is talking
about with scrutiny of manifest, looking at country of origin,
stops of the ship that is carrying containers, possible
interdiction multiple places along the way, and then the active
screening there in the port for radioactive material, chemical
and biological issues.
So when you think about the number of ports in this country
and the number of containers that come in, I am amazed that we
are able to do as well a job as we do. I commend the gentlemen
that are doing that, implementing the policies of this country
every day to keep us safe.
So thank you. Thanks for educating me.
I guess the question I have--is it McAleenan?
Mr. McAleenan. McAleenan, sir.
Mr. Duncan. Thank you. I wasn't here for the introductions,
Madam Chairwoman, so I apologize.
Can CBP effectively screen high-risk shipments in a way
that expedites legitimate commerce? Because from what I saw,
there is a stop-and-go process. I know that we have targeted
certain containers and certain countries of origin, and we are
trying to do a very good job there.
But I am very concerned the speed of commerce and
expedition of that. So can you screen high-risk shipments in a
way that expedites legitimate commerce, while at the same time
ensuring the security of the United States? If you will touch
on that?
Mr. McAleenan. Yes, I believe we can, Congressman. Our
layered approach is designed to do precisely that.
For the vast majority of cargo that we determine to be low-
risk, based on our analysis of intelligence, the information
provided on those cargo shipments, our knowledge of the supply
chain and our knowledge of the parties involved in that
transaction, those are released and fed to their destination,
the engine of our economy, right away, usually before arrival.
For those very small percentage of cargo that we think
might be risky, or that we don't have enough information on
them and we want to take a further look at, we do try to
address that potential risk at the earliest possible time in
the supply chain.
Forty-five thousand times last year, that was done before
the cargo was even laden on the vessel in the foreign port.
Another 5 percent of cargo is examined at the U.S. port of
arrival. We try to even do those examinations in the most
efficient way possible.
We use a non-intrusive inspection technology, which is a
gamma imaging and X-ray device, as you probably saw at the Port
of Baltimore, to do the initial exams on cargo that we
determine might be high-risk. That is a very quick process that
we can scan the cargo efficiently.
If we don't see any anomalies, if the picture looks
consistent with the commodity that we expect to be in that
container, we are able to allow that to proceed into the
commerce. It is only a very small percentage, tiny percentage
that still remains of concern, that we actually do a full
examination in what we call de-vanning, which is emptying the
container and looking at all the contents.
So that layered approach is designed to do precisely what
you asked about, Congressman, in terms of facilitating that
trade while securing it.
Mr. Duncan. I appreciate those efforts and you clarifying
that.
You know, it seemed like there was going to try to be a
gotcha moment a minute ago, asking for 100 percent or 99
percent. There is no way that any country in the nation or in
the world can fully screen every container, based on the sheer
number that are coming into this country.
So I think scrutinizing the manifest, understanding the
country of origin, understanding the history of that particular
shipper or that particular manufacturer or that particular
importer, is critical.
So watching you all implement those different steps, and
saying this container came from X, Y, Z country, but it made
stops at country Z and country Y before it came to the United
States. Maybe it was offloaded there and held for a while, and
then put on another container ship.
Tracking that container the whole way, and understanding
that we need to pull that out of the line, we need to
scrutinize it a little bit further, even to the point of
possibly unpacking it, is an amazing undertaking.
So trying to see a gotcha moment of 100 percent of the
containers, and we know everything that is in there--no. That
is ridiculous.
We don't know how many towels are in there other than what
the manifest says. But you guys do a tremendous job.
Madam Chairwoman, we saw it, that looking for threats,
assessing those threats.
So the question I have for Mr. Caldwell is: In your
estimate, what do you think it would cost the Government to
fully implement 100 percent cargo screening? What is the dollar
figure on that, sir?
Mr. Caldwell. Well, we talked a little earlier about a
figure of $20 billion. That is the same figure we had reported
in 2009.
Mr. Duncan. $20 billion?
Mr. Caldwell. $20 billion. Now it is a little unclear who
would pay this. The SAFE Port Act and the 9/11 Act do not
specify who would pay it, which is a large issue, of course,
with that amount.
Mr. Duncan. Ultimately the consumers are going to pay,
because import/exporters are going to pass those costs on. That
is obvious to most folks.
I am out of time, Mrs. Chairwoman. I yield back, Madam
Chairwoman.
Mrs. Miller. Thank the gentleman.
At this time, the Chairwoman would recognize the gentle
lady from California, Ms. Sanchez.
Ms. Sanchez. Thank you, Madam Chairwoman. Again, you are
doing a good job.
Mrs. Miller. Thank you. So are you.
Ms. Sanchez. I would first ask the gentle lady, I have had
the privilege of being able to go and take a look, having
chaired this subcommittee before, to many of the ports abroad,
to see what conditions they work under.
I would just say that I think aside from trying to take a
look at some of the major ports we have here, this subcommittee
might think about taking a look at the major ports that
actually export to us, and see what conditions there are.
There is a big difference between Mumbai, for example, the
Port of Mumbai, and Singapore. That allows us to understand it
is difficult to get to this 100 percent scanning issue.
In fact, we have just learned, and we have known for a
while that it is just 5 percent or so that we scan. I
understand the layered approach. I was one of the people who
pushed the C-TPAT, for example.
But, you know, there is still this uneasiness, at least for
me, about relying on the manifest for a majority of what is
going on, and just looking for abnormal patterns and risk
analysis towards that, and then taking a look at that.
So I think it is very difficult to get to 100 percent
screen. But at the same time, there is still a lot out there
that we are missing. For example, it is my understanding that
of the cargo at Container Security Initiative Ports determined
to be high-risk, Customs and Border Protection scans are
otherwise resolved 96 percent of the shipment that goes
overseas.
That means that 4 percent of those, or in fiscal year 2011
a little under 2,000 shipments, were high-risk cargo that
weren't examined before they arrived to the United States. As
somebody who lives 20 minutes away from Long Beach/L.A. Port,
that is a big concern.
If there is a dirty bomb or something else in there, I
don't want it reaching here. I really do want to push it out
and have that happen out there.
So that is one of the questions I have, is can you please
discuss that particular issue?
Then my second question would be that Secretary Napolitano
has testified that the requirements of H.R. 1, recommended by
the 9/11 Commission, could not be met for several reasons,
including that the technology does not exist for 100 percent
effective and efficient cargo screening.
So is that the Department's position today, that we don't
have the technology to do an efficient and effective, fast, 100
percent screening?
It is also my understanding that the Domestic Nuclear
Detection Office is developing a plan for evaluating and
testing muon tomography as part of the Advanced Technology
Demonstration Program. This program has been installed in three
ports--Bahamas--to demonstrate as a private/public project in
the operational environment.
So has the Department taken a look to see if they want to
participate in this test to see if, in fact, that technology
works, and whether we can get it put in here to the United
States?
So these would be my three questions, Madam Chairwoman.
I will leave it to any of you to answer those.
Mr. McAleenan. Okay. I will take your first, Congresswoman.
Your numbers are correct on the 96 percent of exams which
are accepted by our foreign partners in the CSI ports for
examination. The 4 percent--there are challenges sometimes in
the timing of the request.
Some of our partners aren't able to respond during the
hours that we need them to, before the container is ladened. It
does mean it gets ladened without an inspection, even though we
have asked for it.
Ms. Sanchez. It arrives in my Long Beach Port, let us say.
Mr. McAleenan. Correct. That happened about 1,780 times
last year, out of the 10.5 million total cargo shipments to the
United States. So it is a very tiny percentage that we have
targeted with CSI, but the foreign governments aren't able to
respond.
Ms. Sanchez. But it is still 2,000. If happens to be one of
those that gets put on a truck that goes through the 5 Freeway
in my neighborhood----
Mr. McAleenan. Understood. The definition of high-risk does
not necessarily mean that it is a risky shipment. In fact, we
have not found an explosive device or terrorist weapon in all
of these shipments that are targeted.
These are based on anomalies in the supply chain. They are
based on intelligence factors. In most of all of the
inspections, the vast majority resolve to no concern.
So, you know, to your point, we would like to get 100
percent response in this from our CSI partners. The 96 level is
our highest historically that we have achieved.
We continue to work with our partners to try to get to that
100 percent level on the CSI ports.
Ms. Sanchez. Thank you.
Mr. Heyman. To get to your other two questions, first, let
me just agree with you. I think I would recommend a visit to
these ports. If you have seen one port, you have seen one port.
I mean, they are so different.
One of the things that has been challenging to us is that
diversity. A terminal operation in one port can be different
from another terminal operation in the same port or even other
ports.
So in terms of the cost of the technology and things like
that, it is not just that. It is also how you configure your
operations on the terminal; what is the footprint? All of those
things need to be factored into it.
They are all problematic.
Ms. Sanchez. Yes, because every port was made in a
different way. You have a different footprint. You can't put
the same standardization in.
Mr. Heyman. Correct. You know, they weren't designed for--
--
Ms. Sanchez. This.
Mr. Heyman [continuing]. This, exactly. Furthermore, the
challenge, of course, that we are on--we are looking to do this
in foreign countries, and the diplomatic challenges.
I think in the pilots, if you look at them, we had labor
issues in South Korea. We had what I just described the
terminal operations were challenging in other ports. United
Kingdom expressed that they were not interested in pursuing
this.
So there are foreign diplomatic challenges, not just the
technical ones or the cost ones. I don't want to belabor the
point.
Let me get to your second question about the technology. We
have to look at technology as a possible solution down the
road. We always want to look at that as a possible long-term
solution. It helps drive down costs. It may increase
efficiencies. It may increase also the speed in which goods
flow through our ports.
So we are looking at that. We are partnering with other
agencies and within our own strategy, looking to do additional
investments in technology and technology development. We all
see where that goes in the long term.
Ms. Sanchez. So is it still the Department's official
position that the technology does not exist to do the 100
percent screening?
Mr. Heyman. The technology that we have--well, no, there is
technology that exists today that has challenges, all of the
ones that I just described, and including challenges I didn't
describe, such as false positives, which end up----
Ms. Sanchez. Right. I understand.
Could you answer for the record, in writing, the third
question that I had about the free port situation, what you
know about it, whether you are involved in it, whether you
think you are going to get involved in it?
Mr. Heyman. Happy to do that.
Ms. Sanchez. Thank you.
Thank you, Madam Chairwoman.
Mrs. Miller. Thank the gentle lady.
The Chairwoman now recognizes Mr. Broun from Georgia.
Mr. Broun. Thank the Chairwoman.
This hearing, as well as many others, have pointed out
something I have long said here in this committee. That is that
the Department of Homeland Security has it totally wrong.
We are spending billions of dollars. In fact, I submit we
are wasting billions of dollars looking for objects, instead of
looking for those who want to harm us.
We would be much better off as a Nation, much more secure
as a Nation if we would spend the money in human intelligence,
focusing on those who want to harm us. We have got to stop
patting down grandma and children, and start looking at
airports for those who want to do us harm through the aviation
sector.
We need to stop looking at all this technology to try to
get to 100 percent when we can only get 5 percent, by really
focusing on those entities throughout the world that want to
harm us. We are not doing that.
We are wasting billions of taxpayers' dollars. We are
giving them a false sense of security. We are giving them a
message that this country is going to be free from having dirty
bombs, as Ms. Sanchez was talking about.
We are wasting the taxpayers' money. It is actually
preposterous to continue looking for objects. We need to
totally change our focus, whether it is with shipping into our
ports, across this country, around the world. We need to start
focusing on those who want to harm us.
Having said that, I have got just a couple of questions.
Why is there such a lack of specifics in the administration's
new ``National Strategy for Global Supply Chain Security''?
Anybody.
Mr. Heyman. The strategy represents the highest level of
fidelity for what we need to do to accomplish our interests in
ensuring the security and resilience of global supply chains.
There is obviously a much richer and deeper programmatic
implementation that goes underneath that.
What the strategy tries to convey is the idea of all of the
preceding programmatic and strategic efforts that have gone
before, that this strategy builds upon. Rather than belabor--
and oftentimes you do list some strategies as you talk about
all of the authorities and everything that goes before that.
We tried not to do that because we wanted people to read
it. That said, we would be happy to give you a more detailed
brief at some point of all of the things that we are doing and
have been accomplishing in the last year.
Mr. Broun. Well please do, because business has a very
great difficulty dealing with your lack of specifics.
Why has the administration spoken against 100 percent
scanning? In some cases, they have even waived the mandate, but
has not requested that Congress repeal the mandate.
Mr. Heyman. At this point, one of the things that we have
done in the last several years, which I think is important for
people to recognize, is put in place programs that actually
allow us to do much better risk management.
If you look at the ATC, which my colleague described, the
Advanced Targeting Center, and the information, the 10+2, which
allows us to do much better analysis, we are probably--I don't
know, eons--much further down the road in terms of our ability
to identify high-risk and interdict high-risk cargo than we
were 5 years ago.
So in many regards, we are moving in a direction which
allows us to be practical and responsible in the implementation
of the law.
Mr. Broun. In the Science Committee, we have looked at a
number of the technologies that have been developed, you
utilized, and some that are just sitting in warehouses. I would
like to have from the Department a run-down of how much money
has been spent on technologies that have been used and
discarded as being effective.
How much money has been even spent and not even utilized,
is sitting in warehouses? If you please provide those data for
me, I would be very interested to see those. Because I know
from a Science Committee perspective, there have been a lot of
technological proposals that the Department has purchased, and
have just never been employed.
But I encourage the Department to change tracks. We have
got to focus on terrorists, instead of focusing on objects. TSA
just takes great pleasure in talking about how many weapons
have been found in airports and talking about the successes
that they have had.
But we have let terrorists on airplanes. We are not doing
our job to keep America safe. The Department is looking in the
wrong direction when we are looking at objects.
We need to look at people, those people who want to destroy
us, and those people groups that want to destroy us. I am not
talking about looking at every Muslim, every person from Middle
Eastern descent.
We need to look at terrorists, instead of looking for the
objects that the Department of Homeland Security is doing now.
We are wasting billions of taxpayers' dollars in doing so.
So I encourage the Department to change tracks. I have told
the Secretary that she is wasting money and that the whole
philosophy of the Department is totally wrong.
We need to look at terrorists. We need to look at those
people who want to harm us, instead of trying to look at
objects and keep them from coming in this country, or getting
on airplanes, boats, or ships, or trains.
We aren't even looking at those other things, just at
aircraft.
I yield back, Madam Chairwoman.
Mrs. Miller. Thank the gentleman.
The Chairwoman now recognizes the gentle lady from Texas,
Ms. Jackson Lee.
Ms. Jackson Lee. Thank the Chairwoman and the Ranking
Member.
To the witnesses, let me ask you a first question of
everyone. I was trying to catch the gentleman from Georgia's
comments about wasting money, but I know that you can't put a
price in America on loss of life.
Obviously, the issue of property can sometimes generate
enormous catastrophic impact on communities. So let me ask the
members of this panel representing a number of entities that
are involved in I believe the mandate of 100 percent cargo
screening that was supposed to take place in January 2012.
Secretary Heyman, do you have the resources? Please don't
tell me that it is not in my area. You are here to talk about
cargo screening and et cetera. So it is your impression that
the Department has the resources, the money right now to make
good on the mandate of 100 percent screening?
Mr. Heyman. No, ma'am.
Ms. Jackson Lee. Thank you.
Okay, we are always getting this. Mr. McAleenan.
Mr. McAleenan. McAleenan, right.
Ms. Jackson Lee. Yes, thank you. Kevin, my good friend. No.
Mr. McAleenan. That works, Congresswoman.
Ms. Jackson Lee. A distinguished name. Your answer to that,
please, sir?
Mr. McAleenan. My answer would be the same, ma'am.
Ms. Jackson Lee. Okay.
Admiral Zukunft.
Admiral Zukunft. We are not in the container screening. But
an element that wasn't introduced was the foreign port
assessments that we are----
Ms. Jackson Lee. Again, that is correct.
Admiral Zukunft. Yes, well 153 nations, four that we don't
do trade with. So that is just another piece of it. Then we are
embedded with CBP.
We screened 28.5 million people last year. Getting back to
the Congressman from Georgia's question, as looking at those
people. So one, are there holes in the fence line, so to say,
in a foreign port, where there are not good access control
points, where someone can enter that facility and then
introduce an object into a container that is not in a manifest?
Then screening people; is there somebody on that vessel
that may do the same?--and looking at that history. Then impose
conditions of entry on those vessels that may enter a U.S.
port.
Then it really comes down to let us stop that threat before
it enters a U.S. port. Let us not stop it at the terminal.
Ms. Jackson Lee. So do you have----
Admiral Zukunft. So we currently have the resources to do
these foreign assessments. We have roughly 60 individuals that
are dedicated to doing foreign port assessments. Our challenge
is the resources that it would take to actually stop the threat
before it enters U.S. waters.
So that is where, as you have heard our comment on State,
time and again--that is where our rubber meets the road.
Ms. Jackson Lee. So you have the personnel right now and
you have the resources. Is there a time when you expect those
resources to run out?
Admiral Zukunft. Not on foreign port assessments. In fact,
we have been able to advance those objectives working with
foreign partners, particularly in the European Union.
Ms. Jackson Lee. This is under your Coast Guard funding?
Admiral Zukunft. It is.
Ms. Jackson Lee. Mr. Caldwell, you are likewise with the
Government Accountability. Do you think DHS made a assessment
of the resources that they have to meet the mandate that was
given to them?
Mr. Caldwell. Not for the 100 percent, no, ma'am.
Ms. Jackson Lee. Is anyone in your shop looking at that
issue? That is part of what may be the potential problem. Is it
not?
Mr. Caldwell. Well, every year, we do analyze the budgets,
provide advice to Congress and committees such as this.
Ms. Jackson Lee. In the most recent budget that you have
analyzed, what is your guess on that? When I say recent, the
most recent one that we may have had, because we don't have a
budget as we speak.
Mr. Caldwell. Could I be very specific?
Ms. Jackson Lee. Yes. You can, sir.
Mr. Caldwell. The 2012 budget versus the 2011, there was a
50 percent reduction in international cargo screening requested
by the administration.
Ms. Jackson Lee. Thank you very much.
Requested from the administration and then ultimately what
occurred? Do you have a next step of what they actually
received?
Mr. Caldwell. Well, part of this was a shifting of funds
from actually people in the ports, like in the CSI port, back
to the National Targeting Center. From our perspective at GAO,
while some people need to stay in those ports to have
relationships with the host countries, that in general, the
targeting purposes, that can be done much cheaper and more
efficiently back here at the National Targeting Center, ma'am.
Ms. Jackson Lee. Thank you.
Would the Chairwoman indulge me for just one last question,
please? I would appreciate it, Madam Chairwoman.
A study produced by Booz Allen Hamilton last year indicated
a 30-day closure of the Port of New York and New Jersey would
result in an economic impact on the U.S. GDP of over $5 billion
and loss of 50,000 jobs.
Whether in New York, in my hometown of the Port of Houston,
Houston port, or in any of the other major ports across the
country, a terrorist incident that closes our Nation's ports
would have a devastating economic affect in the United States
and around the world.
Understanding these potential economic growth impacts--
potential economic impacts, can we afford not to increase the
security of maritime cargo arriving on our shores?
I want to point that to the assistant secretary and to the
assistant commissioner.
Mr. Heyman. Thank you for that, Congresswoman. That is
right. This is one of the reasons this strategy is being put
forward. In fact, the disruptions to ports, the disruption to
commerce, the disruption to supply chains is going to happen at
some point.
We have seen it recently with the tsunami. We have seen it
with the volcano last year. We have seen it with terrorism.
One of the things we have tried to do in this strategy that
is different and that is important to recognize is to
internationalize the solution. That is to say we have gone to
and are going to multilateral organizations, World Customs
Organization, ICAO, IMO, Universal Postal Union.
We are working bilaterally and saying, look, we need to
raise standards. No one government, no one private sector firm,
nobody is going to be able to solve this on its own. It has to
be a community effort.
That is why one of the things we are going to be working on
and having been working on is to internationalize this.
Ms. Jackson Lee. Have you given up on 100 percent
screening?
Mr. Heyman. We are continuing to operate under the law.
Ms. Jackson Lee. Can Mr. Commissioner just finish the
answer? It was two of those that I posed the two. Commissioner,
thank you.
Mrs. Miller. Okay.
Ms. Jackson Lee. Thank you.
Mr. McAleenan. I would just say we must maintain our
robust, layered approach to enhance cargo security. We have got
to continue to improve.
We take the GAO's comments very seriously and have used
them, as Mr. Caldwell testified, to improve our programs over
the course of the past 5 or 6 years.
In fact, the CSI recommendation that they made has saved us
$35 million a year without diminishing our security with the
CSI program. So that is a--maintaining our structure and
expanding it, improving it is absolutely essential.
Ms. Jackson Lee. I thank the Chairwoman and the Ranking
Member.
I thank the witnesses. I yield back.
Mrs. Miller. Thank the gentle lady.
The Chairwoman now recognizes the gentle lady from
California, Ms. Richardson.
Ms. Richardson. Thank you.
First of all, I would like to start off my comments by
thanking Chairwoman Miller and Ranking Member Cuellar for
supporting my participation today in the hearing.
Second of all, for the record, I would like to note that
Representative Rohrabacher is the one who represents the Port
of Los Angeles and Long Beach, which is known as the San Pedro
Complex. It is the largest port in the United States, of which
I will be focusing my comments today.
I also want to note for the record that at a full Homeland
Security Committee hearing on February 25, 2010, I questioned
Secretary Napolitano on the progress of the 100 percent
container screening. On June 16, 2011, as Chairwoman of the
Subcommittee on Emergency Communications, Preparedness, and
Response, myself and committee Members submitted a letter to
the Secretary regarding the impending deadline of the
screening.
Then again on March 3, 2011, I asked Secretary Napolitano
about the 100 percent cargo screening. So this has been a
concern of mine for quite some time.
With all due respect to some of our folks here who are
testifying, for those of us who live in these communities, the
port complex itself is in Mr. Rohrabacher's district. However,
all of the land portion and all of the impacts of the port,
meaning trucks and activity, for example, in the Port of Long
Beach is in my district.
So I take it pretty seriously.
Madam Chairwoman, for the record I would also like to point
out that not speculating ideas, but according to the University
of Southern California's Homeland Secure Center, a preliminary
economic report was performed back in 2003 due to the strikes
that we had, the labor strikes in 2003.
It was recorded at that time that $1 billion a day was
lost, based upon the closure of our ports. So with all due
respect to the people who are testifying, when we say a number
of $16, $20 million, whatever it is, when you keep in mind that
we lost $11 billion in 2003, and that was a labor issue; that
wasn't even if there were infrastructure damages.
So I am not putting aside the cause that we need to
consider these costs. Which leads me to my first question. If
you could do yes and no as much as possible, I would appreciate
it.
Mr. Heyman, to your knowledge, has the Department conducted
a feasibility analysis, based upon costs, as Mr. Caldwell has
referenced?
Have you guys done that, yes or no?
Mr. Heyman. We have not done a full feasibility study.
Ms. Richardson. Okay. Thank you. My next question would be,
Mr. Heyman, to your knowledge, have any steps been taken--are
any steps being taken at this time to achieve the SAFE Port Act
9/11 Recommendations of 100 percent scanning in the Department?
Mr. Heyman. Yes. We have submitted a report. We can make
sure you get a copy on that.
Ms. Richardson. Let me make sure you are clear on the
question that I am asking. This report will reflect what steps
you are taking to achieve the 9/11 recommendations of 100
percent scanning?
Mr. Heyman. This report reflects all of the SAFE Port
requirements and how we are implementing it.
Ms. Richardson. How you are working to achieve 100 percent
scanning?
Mr. Heyman. The report talks about what we have done to
achieve 100 percent scanning to this point.
Ms. Richardson. Okay.
Commissioner, is it true that the CBP relies upon host
governments, with their customs personnel in relevant foreign
countries, to resolve issues of containers that are deemed
high-risk?
Mr. McAleenan. Yes. We work with host nation authorities
that are sovereign in those ports, and oftentimes observe the
examinations of participants.
Ms. Richardson. Is it true that the CBP does not require
scanning at these ports?
Is it true that you do not require scanning of the high-
risk containers out of these various ports, these foreign
ports?
Mr. McAleenan. Our CSI folks are operating with requests,
as opposed to requiring authority to examine.
Ms. Richardson. So it is correct of my question that you do
not require scanning at these ports. Is that correct?
Mr. McAleenan. We do not have the authority to force a
sovereign nation to take action on our behalf.
Ms. Richardson. Okay. Again building upon Ms. Sanchez, it
is true that 4 percent of the cargo identified at these ports
have been identified as high-risk and have arrived in the
United States without being scanned. That is correct?
Mr. McAleenan. That is correct, 1,750 shipments last year.
Ms. Richardson. Okay. Mr. Heyman, you testified about all
these wonderful international relationships. However, when I
asked the Secretary and when I also asked Ambassador Kirk, in
these trade agreements that we recently approved, was there any
effort to work with these foreign countries to establish a
scanning process?
The answer in both of those was no, didn't know, would get
back to us. Do you know anything different than that?
Mr. Heyman. I do not, but I can get back to you, if you
like.
Ms. Richardson. Okay.
Finally, Madam Chairwoman, I would just like to build upon
Mr. Broun's request of not only requesting the information of
costs of some of the technology of what is being done, but to
supply to requests of ourselves here who are testifying--to
supply to us details on what steps have been taken, what
technology is currently being considered, when has that last
been reviewed, and what future technologies are they
considering to meet this request, which may require a
classified briefing.
Mrs. Miller. Thank the gentle lady.
The Chairwoman now recognizes----
Ms. Richardson. Did you accept my request?
Mrs. Miller. Yes. Without objection. Were you concluded?
Yes, okay. Without objection, certainly.
Chairwoman now recognizes Ms. Hahn.
Ms. Hahn. Thank you, Madam Chairwoman and Ranking Member. I
really am appreciative of this hearing, as I mentioned to you
yesterday on the floor. My friend, Congress Member Ted Poe and
I have founded the Port Caucus here in Congress.
In December, we actually sent a letter to the chair of the
Homeland Security Committee asking for a hearing such as this.
I am very pleased that we are holding this.
I have been very interested in the testimony. But I think
sitting here this whole time and listening to the question-and-
answer, I am not feeling any better about where we are in this
country in terms of port security.
I echo many of the comments that my colleague, Ms.
Richardson, just made. While neither one of us actually
represents the Port of Long Beach or Los Angeles, those two
ports, we call them America's ports, because about 44 percent
of the trade that comes into this country comes through those
port complex.
Both of our districts border those ports. Many of our
constituents live minutes from those ports. Any attack, natural
or man-made, would be devastating to lives and to the National
economy. As Ms. Richardson said, in 2002, we had a labor
dispute. Everyone knew it was happening. There was already
efforts underway to divert cargo from the West Coast ports.
Yet we were able to determine that it was a $1- to $2-
billion-a-day hit to our National economy. It lasted 10 days.
So do the math and we know what that did.
Also not to our National economy but the global economy. We
heard that many businesses throughout Asia actually were
extremely impacted by the loss of cargo moving during that 10
days. Some of the businesses, we even heard, never recovered
from that.
So I think the threat to our National economy, the global
economy, to lives is severe. I have real concerns. I have
always felt like the most vulnerable entryway into this country
is through our sea ports. After 9/11, I think we focused in
this country, rightly so, on securing our airports.
You know, and we didn't really take into account the costs.
We didn't really take into account the inconvenience. I think
if the traveling public knew exactly what it was going to
entail to make it through security lines, they would have
probably balked at what we were recommending.
But we did it because we knew it was important to the
safety and security of the traveling public, as well as to our
commerce. I don't feel like we have done the same with our
ports.
I know there is a lot of vulnerabilities still. I am one of
those that would like to see us get to a much greater
percentage of scanning. I really think that is imperative.
I think just by your testimony today, you have talked
about, you know, really a lot of what you are focusing on is a
layered approach, knowing what is in the manifest, believing
what is in the manifest, and believing that when it reaches our
shores, nothing has happened across the ocean to have tampered
with any of that cargo.
Since we have implemented this, I know just at the Port of
Los Angeles, there has been twice on the anniversary of 9/11 a
National media company actually ship depleted uranium through
the port. It was discovered in Los Angeles.
Also know, since we have implemented this, there has been a
couple of containers have come in that harbored folks from
other countries. One was 19 Chinese in a container, that was
discovered by the longshoremen in Los Angeles, not through any
of these efforts that are underway.
In terms of costs, you know, the costs that would impact
our economy if something were to happen at one of these major
ports is significant. But, you know, we were spending, you
know, a lot of money on our wars per month. It was $12 billion
per month for both of our wars in Iraq and Afghanistan.
We believe that was worth it. We believe that was worth it
for the National security. I really think this is at that
level. I feel like we are vulnerable.
I think we have all talked about how much we want a greater
percentage of screening. I think you have answered where we are
at. I think you have heard this warning from a lot of Members
of this committee, that we really are interested in seeing you
get a higher percentage of scanning.
Let us talk about not when something or if something might
happen. Let us talk about when something happens and port
disruption. It was touched on in terms of recovering. I know
that I am going to be introducing legislation that talks about
all of our ports in this country having a recovery plan,
because I think that would make our ports less attractive to an
attack, if we knew that they could get up and running.
In this Port Caucus, we are going to talk about a recover
plan for all of our ports. What would you suggest that we look
at, in terms of what would be important for our major ports to
get back up in business after a major disruption?
Mr. Heyman. Thank you, Congresswoman, for your thoughts on
this very important subject. We take this very seriously. We
appreciate your seriousness about it as well.
On the resilience and recovery side, it is something that
is not as--it has not been as embraced or as thought through as
the prevention side. That is because largely we are very
concerned about prevention. We have done less on the resilience
side.
In the United States, that is why we are taking an
initiative and building in resilience internationally in our
strategy. In fact, we have led the way, partly through the APAC
Forum, of ensuring trade recovery procedures are put in place.
One of the main things that people will do, and frankly,
the ports should consider, is having the appropriate
information to know where and when things can open, so that
businesses can rely on a real understanding of timing and
recovery of a disruption.
The sharing of information is one of the things that we can
do a lot more on, as it pertains to resilience at these ports.
Ms. Hahn. Let me also ask about once at point of origin, we
have got the manifest. It arrived at its point of destination.
We are hoping for the best, that nothing has happened on our
wide, open seas.
Can any of you speak to that issue? Are you 100 percent
sure that when these containers leave their points of origin
and when they arrive at their point of destination, nothing has
happened? What are we doing to ensure that?
Mr. McAleenan. We are trying to make as certain as possible
of that. To do that is part of the 10+2 filing. It includes
information on where the containers reside on the vessel.
That allows us to see if they might be accessible while
they are on the high seas, to determine whether they could be
compromised while they are underway. So we do seal checks when
they arrive. We are able to compare the seal submitted by the
importer and the shipper.
Ms. Hahn. Who does those seal checks?
Mr. McAleenan. U.S. Customs and Border Protection, usually
officers at the port of entry. So, in other words, this is a
concern. It is something we take seriously. We work with our
partners in the Coast Guard as the vessels approach the U.S.
ports.
But----
Ms. Hahn. Do you seal checks on all the containers?
Mr. McAleenan. No. We do targeted seal checks and also
random operations to ensure the integrity.
Ms. Hahn. See, and that is what makes me nervous too,
again. It keeps me up at night, is that random, you know, your
kind of best guess on where to even check the seals.
You know, as more and more of our ports are going to go
automated, I am concerned that the loading and unloading of our
cargo by automation, as opposed to real folks, I think presents
a bit of a risk.
Thank you.
Mrs. Miller. I want to thank the--turn my mike on. I
certainly want to thank all the participation from the Members
today. It has been I think one of our--well, we have had some
great hearings, but this certainly has been a good one, I think
a lively one, a good discussion.
I certainly want to thank all of the witnesses for your
testimony. I sincerely want to thank you all for your service
to our Nation. I know I speak on behalf of all of the Members,
as we are obviously working in an extremely bipartisan fashion
about National security.
My staff gets sick of me saying this, but I say it all the
time and try to remind certainly myself that with all the
issues that the Congress faces, the first and foremost
responsibility of the Federal Government is provide for the
common defense.
That is actually in the preamble of our Constitution. So
National security, homeland security, all of these kinds of
things are always our priority.
So it has been very eye-opening to hear about some of the
dollars that would be involved in us getting to where we may
want to get to. I think you can see, again from a bipartisan
standpoint, that we are very cognizant of the challenges to
ever get to 100 percent, whether or not it is even feasible.
That is why we have been waiting for the Secretary to come
forward with possibly some legislation to modify the current
mandate or what have you. But this subcommittee is very, very
interested in assisting you with the resources that you all
need to do your jobs, and the mission that we have tasked you
with.
You are out there every single day. It really is for us, as
I say, to prioritize our spending here. Again, I will say that
from a bipartisan standpoint, because it is interesting hearing
that the administration is proposing a 50 percent reduction in
the CSI program.
But yet I certainly understand the makeup of all of that as
well. It is expensive to have officers overseas, et cetera. So
we are not looking for a sound bite here. We really are trying
to understand how we prioritize our spending and do what we
need to do to keep our Nation safe, particularly through our
ports.
So again, I appreciate all of the witnesses, your
testimony. With that, I would mention also that the hearing
record will be open for 10 days. If there is any additional
questions, we all may submit those as well.
Without objection, subcommittee stands adjourned. Thank you
very much.
[Whereupon, at 12:01 p.m., the subcommittee was adjourned.]
A P P E N D I X
----------
Questions for David Heyman From Chairwoman Candice S. Miller
Question 1. Secretary Napolitano has stated that the 9/11 Act's
mandate to scan 100% of maritime cargo containers is not achievable,
does not necessarily make sense, and is not in line with the current
risk-based approach. In fact, the Secretary has stated that the
``mandate was constructed at a time before we had really a mature
understanding of what that meant.''
What is the current status of the DHS efforts to meet the 100%
scanning mandate?
Answer. DHS remains committed to ensuring that all goods coming
into the United States are secure and do not pose a threat to our
citizens or National interests. This is an area where we have done a
significant amount of work, particularly with regard to containerized
maritime cargo where we see such huge volumes of goods arriving each
year. The SAFE Port Act required DHS to implement a pilot program to
assess the feasibility and potential challenges with a 100 percent
maritime container scanning program, titled the Secure Freight
Initiative, or ``SFI.'' SFI was deployed in six international ports in
2007 and 2008, double the required number. It demonstrated to us both
the value that scanning can provide but also the significant impacts
and challenges such a regime can pose if not implemented thoughtfully.
As outlined in six annual reports to Congress titled Update on
Integrated Scanning System Operations, these challenges included cargo
processing delays, limited space within ports for the systems, high
costs, diplomatic issues, and immature technologies. In light of these
challenges, five of the six pilot project locations have reverted to
Container Security Initiative (CSI) protocols of risk-based targeting
and only the Port of Qasim in Pakistan remains an active SFI location.
Question 2. Why was the 100% scanning mandate not addressed within
the recently released Global Supply Chain Security Strategy?
Answer. The National Strategy for Global Supply Chain Security
(Strategy) does not address any specific statutes, programs, or
initiatives, including the 100 percent maritime containerized cargo
provision. Instead, the Strategy provides a high-level, integrated
vision on a broad and complex topic. It establishes a collaborative
risk-based approach to pursuing our goals of security, efficiency, and
resiliency in the global supply chain. As a number of recent threats
have shown us, the global supply chain is dynamic, growing in
complexity and size, and remains vulnerable to a host of threats and
hazards. A common approach is necessary to strengthen and protect this
vital system. The Strategy is an important first step; it will enhance
coordination among the many U.S. departments and agencies with
responsibilities related to the global supply chain and convey our
goals and priorities to stakeholders interested in collaborating with
us.
Question 3. Does DHS intend to move forward with implementing the
100% scanning mandate?
Answer. At this time, DHS is assessing whether it will be necessary
to extend the deadline for the 100% scanning mandate established in
Section 232(a) of the SAFE Port Act. We currently believe that at least
three of the conditions for a 2-year extension exist but our assessment
is not yet complete, nor has a final decision been made.
While no decision has been made yet on the extension, the National
Strategy for Global Supply Chain Security does identify promoting
necessary legislation that supports implementation by Federal
departments and agencies. Should a determination be made to pursue
amending the mandate to reflect the Strategy's layered, risk-based
approach, DHS would seek to work with Congress.
In the mean time, we continue to work in concert with other
departments and agencies (such as the Departments of Energy, Defense,
Commerce, and State) to ensure that our Nation's nuclear non-
proliferation programs remain strong and global security measures to
combat this threat are advanced.
Question 4. Is 100% scanning an achievable goal?
Answer. We do not believe that 100 percent scanning is an
achievable goal, given the challenges previously noted. We are and
continue to be committed to using a risk-based security approach and
multiple layers of defense. We will continue work with Congress to
refine our approach and ensure that scanning remains a key layer of our
risk-based security system.
Question 5. If 100% scanning were fully implemented, what would the
initial and on-going costs to the Federal Government be to establish,
maintain, and operate such a regime?
Answer. DHS estimates that fully implementing the 100 percent
scanning mandate would require establishing 2,100 scanning lanes across
approximately 700 ports worldwide. A conservative estimate, based on
costs associated with the Secure Freight Initiative pilots, is that
such an effort would cost $16.8 billion dollars. This estimate does not
factor the impacts and costs to the shipping industries or an estimated
$2.9 billion annual operations and maintenance of the scanning
equipment. If the 100 percent scanning mandate were fully implemented
using currently available technological systems, the trade capacity
impact on the flow of cargo would be significant.
Questions for David Heyman From Honorable Mike Rogers
Question 1. TSA and the Coast Guard completed the Transportation
Worker Identification Credential (TWIC) reader pilot program in May
2011. DHS has failed to publish their assessment regarding the pilot
program, even though the Coast Guard Authorization Act of 2010
specifically required these findings to be submitted to Congress within
4 months of the completion of the program. Furthermore, the failure to
complete this report has delayed the publication of the TWIC reader
regulations, and now DHS does not expect to publish this key rulemaking
until July 2012 at the earliest.
What is the status of the Department's findings on the TWIC reader
pilot program?
Answer. The Transportation Worker Identification Credential Reader
Pilot Report was signed by the Secretary on February 27, 2012, and
delivered to the following committees: The Senate Committee on
Commerce, Science, and Transportation, the Senate Committee on Homeland
Security and Governmental Affairs, the House Committee on Homeland
Security, and the House Transportation and Infrastructure Committee.
Question 2. Why is this report already over 4 months late, and
Congress still has yet to receive it?
Answer. The Transportation Worker Identification Credential Reader
Pilot Report underwent a thorough review by a number of components
within DHS prior to the Secretary's approval.
Question 3. When can we expect to have this report?
Answer. The Transportation Worker Identification Credential Reader
Pilot Report was delivered to the required House and Senate Committees
on February 27, 2012.
Question 4. When can we expect the TWIC reader regulations to be
published?
Answer. The Coast Guard is working diligently to publish the TWIC
Reader Notice of Proposed Rulemaking (NPRM). An Advanced Notice of
Proposed Rulemaking (ANPRM) on the TWIC reader requirements was
published in the Federal Register on March 27, 2009. The ANPRM comments
have been analyzed along with pilot data, and together they will help
inform the Notice of Proposed Rulemaking (NPRM). It is difficult to
predict when the final TWIC reader requirements might be implemented,
as the Coast Guard is required to review, analyze, and take public
comments into account before any final TWIC reader requirements can be
implemented. For this reason, the Coast Guard does not have a precise
date for publication of the TWIC reader rulemaking project.
Questions for Paul F. Zukunft From Honorable Mike Rogers
Question 1. TSA and the Coast Guard completed the Transportation
Worker Identification Credential (TWIC) reader pilot program in May
2011. DHS has failed to publish their assessment regarding the pilot
program, even though the Coast Guard Authorization Act of 2010
specifically required these findings to be submitted to Congress within
4 months of the completion of the program. Furthermore, the failure to
complete this report has delayed the publication of the TWIC reader
regulations, and now DHS does not expect to publish this key rulemaking
until July 2012 at the earliest.
What is the status of the Department's findings on the TWIC reader
pilot program?
Answer. The Transportation Worker Identification Credential Reader
Pilot Report was signed by the Secretary on February 27, 2012, and
delivered to the following committees: The Senate Committee on
Commerce, Science, and Transportation, the Senate Committee on Homeland
Security and Governmental Affairs, the House Committee on Homeland
Security, and the House Transportation and Infrastructure Committee.
Question 2. Why is this report already over 4 months late, and
Congress still has yet to receive it?
Answer. The Transportation Worker Identification Credential Reader
Pilot Report underwent a thorough review by a number of components
within DHS prior to the Secretary's approval.
Question 3. When can we expect to have this report?
Answer. The Transportation Worker Identification Credential Reader
Pilot Report was delivered to the required House and Senate Committees
on February 27, 2012.
Question 4. When can we expect the TWIC reader regulations to be
published?
Answer. The Coast Guard is working diligently to publish the TWIC
Reader Notice of Proposed Rulemaking (NPRM). An Advanced Notice of
Proposed Rulemaking (ANPRM) on the TWIC reader requirements was
published in the Federal Register on March 27, 2009. The ANPRM comments
have been analyzed along with pilot data, and together they will help
inform the Notice of Proposed Rulemaking (NPRM). It is difficult to
predict when the final TWIC reader requirements might be implemented,
as the Coast Guard is required to review, analyze, and take public
comments into account before any final TWIC reader requirements can be
implemented. For this reason, the Coast Guard does not have a precise
date for publication of the TWIC reader rulemaking project.
Questions for Kevin K. McAleenan From Chairwoman Candice S. Miller
Question 1. At the Border and Maritime Security Subcommittee
hearing focusing on Supply Chain Security held on February 7, 2012, you
testified that CBP has concluded that implementing 100% scanning could
cost more than $16.8 billion.
Please breakdown this number and explain this $16.8 billion cost.
Answer. DHS estimates that fully implementing the 100 percent
scanning mandate would require establishing 2,100 scanning lanes across
approximately 700 ports worldwide. A conservative estimate, based on
costs associated with the Secure Freight Initiative pilots, is that
such an effort would cost $16.8 billion dollars. This estimate does not
factor the impacts and costs to the shipping industries or an estimated
$2.9 billion annual operations and maintenance of the scanning
equipment.
To develop this estimate, CBP first assessed the costs associated
with operations at the Container Security Initiative (CSI) ports as
well as the Secure Freight Initiative pilots. CBP determined that 187
suites of technology were used to maintain operations at the 58 CSI
ports and 12 additional locations. The costs associated with these 187
suites of technology are broken down further below.
Non-Intrusive Inspection Systems
$3.5 million-$4.5 million each
Total cost for 187 units is between $654 million-$841
million
Radiation Portal Monitor Systems
$400,000 each
Total cost for 187 units is approximately $74.8 million
Information Technology Transmission
$800,000
Total cost for supporting 187 units is $149.6 million
Construction
$1 million per site
Total costs for all 187 suites is $187 million
Staffing
$500,000 per officer
Total cost for 2-4 officers required per port is $187
million-$374 million
Approximate total for 187 suites of technology needed to
support the 58 CSI ports and additional 12 pilot locations was
therefore $1.25 billion-$1.62 billion
We arrived at the total implementation estimated cost of $16.8
billion by extrapolating the costs above associated with the 70
locations to the more than 700 ports (2,100 lanes) that shipped
maritime containers to the United States in 2009 (the year the analysis
was conducted).
Question 2. Is this $16.8 billion the initial start-up cost, and if
so, what are the annual reoccurring costs for implementing 100%
scanning?
Answer. $16.8 billion is the start-up cost for 700 ports and the
annual operations and maintenance costs would be approximately $2.9
billion.
Question 3. Please explain how you came up with this figure and
provide any documentation that supports the $16.8 billion cost.
Answer. In fiscal year 2009 (the year the analysis was completed)
there were approximately 700 ports that shipped cargo to the United
States. We used the analysis from 70 ports (58 CSI ports and 12
additional ports) to estimate of the number of suites of technology
required for those 70 ports to implement 100 percent scanning. Based on
the additional ports shipping to the United States and the volume of
cargo from each of those ports, CBP estimated that it would require
approximately 2,100 suites of technology for all ports to implement 100
percent scanning. CBP used a figure of approximately $8 million per
suite of technology for a total of approximately $16.8 billion. This
does not include the cost to the trade if they were charged for
scanning or if containers were delayed.
Question 4. In the Secretary's recent State of the Homeland
Address, she explained the rationale behind a risk-based approach to
Homeland Security and expounded on the need for strong partnerships
with industry, foreign governments, and other key stakeholders. One
program that incorporates cooperation with industry to provide
additional layers of security in exchange for certain benefits is the
C-TPAT program. While C-TPAT has been a largely positive program, it
does have several limitations. Some participants in the voluntary
program have complained that they are not realizing certain privileges
of membership.
What are you doing to increase participation in C-TPAT? Are you
considering new or additional benefits for some or all members?
Answer. Tiered Benefit Levels for importer partners ensure that
examination benefits are commensurate with the partner's status in the
program and are recognized by the Security and Accountability for Every
(SAFE) Port Act. The highest level of program benefits are awarded to
those partners that exceed the minimum-security criteria through
innovation and dedication to excellence.
The program is currently surveying members requesting input on
additional benefits.
C-TPAT is in the process of implementing a National standard
operating procedures to ensure for front-of-the-line benefits at ports
of entry.
C-TPAT is looking into areas for program expansion which would
include critical nodes in the international supply that may not require
a large commitment of current limited resources to physically visit.
One possibility is to expand the Foreign Manufacturer sector (which is
currently limited to those companies which qualify in Mexico and
Canada) to allow for global participation. Many of the companies who
would qualify have been visited at least once already by C-TPAT teams
as part of validations of U.S. importer supply chains and could in many
cases be validated based on previous visit(s) data. Furthermore, many
of these companies are participants in AEO programs which C-TPAT has
established Mutual Recognition Arrangements with and could potentially
validate based on the AEO visit data. Similar potential may exist in
the foreign-based consolidator sector where these facilities are often
visited as part of U.S. importer validations. Historical data could be
leveraged to increase membership while minimizing the impact on
operational resources because initially, many new companies in the
previously described examples could be virtually validated (not
requiring physical trips).
Question 5. What have been some of the biggest impediments to
further expanding the C-TPAT program?
Answer. CBP has carefully expanded the program since its inception
to include new entities which have the physical means to enhance
security along these critical points. In accordance with the SAFE Port
Act of 2006, CBP established new membership communities for Mexican
Long Haul Carriers, Foreign Marine Port Terminal Operators by
invitation, and third party logistics providers. The decision to expand
C-TPAT membership to include these groups was made in close
consultation with the trade community including the U.S. Department of
Homeland Security's Commercial Operations Advisory Committee.
Existing members have expressed concern with a possible softened
posture on eligibility requirements that would imply that new members
will be subjected to a less robust validation process.
Question 6. I understand that each C-TPAT supply chain specialist
is responsible for about 75 companies. Have staffing shortages limited
the expansion or effectiveness of the C-TPAT program?
Answer. Our current staffing levels are adequate to meet our
existing workload. However, human capital and funding will need to grow
at a commensurate rate as the program expands in order to manage the
increase in vetting, validation process, and C-TPAT partner account
maintenance.
Question 7. What steps has the Department taken to link with our
foreign partners and improve the security of the entire global supply
chain in terms of aligning our trusted shipper program, C-TPAT, with
similar and effective programs abroad, such as Europe's AEO program or
Canada's PIP program?
Answer. CBP continues to collaborate with foreign customs
administrations to improve efficiency and reduce redundancy within
their respective trusted trader programs. Mutual Recognition (MR) links
the various international industry partnership programs so that they
create a unified and sustainable global security posture. CBP has
signed MR Arrangements with five countries and is also working with
three additional entities towards MR (Taiwan, Singapore, and the
European Union).
Mutual Recognition countries:
New Zealand--Secure Export Scheme (SES) (MR signed in June 2007)
Observe New Zealand validation visits in accordance with
MRA.
Canada (MR signed in June 2008)
PIP and C-TPAT have jointly developed single application
requirements for highway carriers and conducted a pilot with 4
highway carrier companies (2 located in Canada and 2 in the
United States) in the first quarter of 2011. The joint pilot
was successful and illustrated the feasibility of the single
application with single entity to single entity.
Jordan--Golden List (MR signed in June 2008)
Increase communication with Jordan's Golden List program to
improve Mutual Recognition.
Japan AEO (MR signed in 2009)
Continue open communication and implementation of Mutual
Recognition.
Conduct Export pilot for C-TPAT companies that export to
Japan in 2012.
In accordance with the MRA signed, observed their validation
process in December 2011.
South Korea AEO (MR signed in June 2010)
Continue open communication and implementation of Mutual
Recognition
In accordance with the MRA signed, observed their validation
process in December 2011.
Future MR Arrangements:
EU AEO
Finalize Mutual Recognition Arrangement and implement
reciprocal benefits.
Accepting MRA certificates from the European Union for
foreign manufacturers in lieu of visiting the foreign site.
Mutual Recognition Arrangements with the European Union is
expected to be signed on May 4, 2012. Implementation to follow
soon afterwards.
Taiwan AEO
In February 2012, conducted joint validation visits towards
signing a Mutual Recognition Agreement, implement reciprocal
benefits by 2012.
Taiwan AEO will be observing C-TPAT Validations in the
United States the week of April 23, 2012.
Singapore--Secure Trade Partnership (STP)
In March 2012, conducted joint validation visits towards
signing a Mutual Recognition Agreement, implement reciprocal
benefits by 2012.
Singapore STP will be observing C-TPAT Validations in the
United States the week of June 4, 2012.
C-TPAT HQ and International Affairs will be meeting with
Singapore STP representative the week of June 11, 2012 in
Washington, DC.
CBP is also actively engaged with other countries' Authorized
Economic Operator (AEO) programs to improve the security of the
international supply chain:
Mexico AEO
Continue to work with Mexican Customs AEO program Nuevo
Esquema de Empresas Cerificadas (NEEC) to provide technical
assistance and further advance supply chains originating in
Mexico. C-TPAT and NEEC developed a strategy to recognize C-
TPAT manufacturers into Mexico's program. The objective of this
strategy is to increase NEEC membership giving it instant
credibility; and to help both programs synchronize procedures
and standards to ensure maximum compatibility. This will
eventually facilitate the road towards mutual recognition
between the United States and Mexico. So far, 295 C-TPAT
manufacturers operating in Mexico have agreed to join the NEEC
program.
Colombia
Conduct Export Pilot for C-TPAT companies that export to
Colombia in 2012. Companies in both the United States and
Colombia have been identified and invited to participate in the
pilot. Colombia's program remains young and it will need
sometime to process the applications and eventually certifiy
the companies that will be participating in this pilot program.
China
Continue open communication and joint validations, with the
possibility of Mutual Recognition Agreement.
Costa Rica Programa de Facilitacion Aduanera para el Comercio Confiable
en Costa Rica PROFAC (Customs Facilitation Program for Trusted Trade in
Costa Rica)
Costa Rican AEO program PROFAC has identified their four
Export Pilot companies to participate in the pilot program.
Maria Iris Cespedes will e-mail Bryan Picado with names and MID
numbers. She also expressed that she would like to include an
additional company as back-up.
Deliverables and a time line have been established to launch
the ``Export Pilot Program'' by August 2012. PROFAC has
recruited five companies which are in the process of applying.
April 23-30, PROFAC will determine if companies are
eligible to participate in Export Pilot Program via a self-
evaluation questionnaire provided by PROFAC.
May-July, all eligible companies will be certified via
PROFAC's internal vetting process and validated jointly by
PROFAC and C-TPAT to ensure a side-by-side comparison of C-
TPAT's minimum security criteria.
Once all eligible companies successfully pass vetting and
are in compliance with PROFAC and C-TPAT's minimum security
criteria, the ``Export Pilot Program'' will be launched in
the month of August
Guatemala AEO
Continue cooperative efforts and provide training and
assistance.
Dominican Republic
Continue cooperative efforts and provide training and
assistance.
Turkey AEO
Continue cooperative efforts and provide training and
assistance.
India AEO
Continue cooperative efforts and provide training and
assistance.
Brazil AEO
Continue cooperative efforts and provide training and
assistance.
Question 8. What concerns do you have about such mutual recognition
agreements?
Answer. C-TPAT receives requests from foreign governments for
assistance and capacity-building on trusted trader/mutual recognition
programs. The program is concerned with meeting ever-increasing
requests for MRA capacity-building due to our limited staff resources.
Question 9. Has there been any consideration of including third-
party logistic providers in the C-TPAT program?
Answer. Currently, C-TPAT is considering the inclusion of asset-
based warehouses that are located within close proximity or equivalent
of the port of arrival that receive international cargo directly from
the port in excess of 500 Twenty-Foot Equivalent Units (TEUs). The
value of adding this sector is that these entities are the ``first
domestic custodians'' to verify the integrity and number of the seal
and reconcile the cargo against the manifest.
The decision to create a new entity in the program takes into
account several factors, including the ability of participating
businesses to physically influence security practices and procedures
abroad, available program resources, and redundancy with other existing
security programs. In developing the eligibility criteria for the
third-party logistic providers' (3PLs') sector, CBP determined that
non-asset-based 3PLs which perform duties such as quoting, booking,
routing, and auditing, but which do not own warehousing facilities,
vehicles, aircraft, or any other transportation assets, should be
excluded from C-TPAT enrollment. As these type of 3PLs may possess only
desks, computers, and freight industry expertise, such entities would
have limited ability to exert influence on their business partners in
the international supply chain. CBP does not believe it would be
prudent to use its limited program resources to validate such entities,
most of which are based solely in the United States, when resources
would be better served to validate entities abroad.
Questions for Stephen L. Caldwell From Chairwoman Candice S. Miller\1\
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\1\ [sic]
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Question 1. GAO has completed extensive work regarding the C-TPAT
program.
Has the C-TPAT program been effective in accomplishing its goal of
encouraging companies to boost their security programs?
On the basis of work we performed as part of our last review of the
Customs-Trade Partnership Against Terrorism (C-TPAT) program in April
2008,\2\ as well as more recent follow-up work we performed to
determine the status of our recommendations from that report, we
believe that U.S. Customs and Border Protection (CBP) has been
successful in getting companies to join C-TPAT and verifying that the
member companies are generally following minimum standards designed to
improve their security.\3\ Specifically, as part of our 2008 C-TPAT
review, we assessed the progress CBP had made in addressing challenges
in validating C-TPAT members' security practices, among other things.
We reported that CBP had introduced a process to award benefits for C-
TPAT importers depending on validation of their security practices, and
that CBP had taken steps to improve the security validation process,
but faced challenges in verifying that C-TPAT members' security
practices meet minimum criteria. For example, we found in 2008 that CBP
lacked a systematic process to ensure C-TPAT members take appropriate
actions in response to CBP security specialists' recommendations during
validation inspections. Without such a key internal control, CBP did
not have reasonable assurance that companies would implement its
recommendations to enhance supply chain security practices in
accordance with CBP criteria. In response to recommendations we made in
our April 2008 report, CBP has taken a number of actions to strengthen
the C-TPAT program and better ensure its process for validating C-TPAT
members' security procedures.
---------------------------------------------------------------------------
\2\ 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, DC:
Apr. 25, 2008).
\3\ The DHS Inspector General (DHS-IG) is currently conducting an
audit of the C-TPAT program to determine the extent to which CBP
ensures that highway carriers participating in the program have
implemented security measures that meet the minimum security
requirements of C-TPAT. The DHS-IG expects to issue the report on the
results of this review at the end of April 2012.
---------------------------------------------------------------------------
To address the challenges noted in the report related to verifying
that C-TPAT members' security practices meet minimum criteria, we
recommended that, among other things, CBP strengthen the evaluation of
members' security practices by requiring that validations include the
review and assessment of any available results from audits,
inspections, or other reviews of a member's supply chain security. CBP
has addressed this and other recommendations from our 2008 review. For
example, CBP issued policy guidance in May and June 2008, shortly after
our report was issued, that instructs field directors and supervisors
to immediately require supply chain specialists to: (1) Request
information from C-TPAT members about any audits or inspections
conducted of its security practices as part of preparing for the
validation visit and (2) ensure any required actions and
recommendations from C-TPAT validation reports are completed. Further,
in response to a separate GAO recommendation, CBP has explored options
for developing performance measures to assess the effectiveness of the
C-TPAT program in enhancing supply chain security.
Question 2. Do you think that companies are properly incentivized
to join C-TPAT? Have the benefits CBP promises to C-TPAT members been
fully realized?
Answer. C-TPAT membership has increased over time, indicating an
incentive for companies to participate in the program. Specifically, at
the end of 2007, CBP had initially certified fewer than 8,000 members,
and by November 2010 CBP had certified over 10,000 members. While we
have not conducted work to specifically evaluate the incentives or
benefits of the C-TPAT program, according to CBP, some of the benefits
of participating in C-TPAT include improved predictability in moving
goods and services, decreases in supply chain disruptions, and
reductions in cargo theft and pilferage. Further, according to CBP, C-
TPAT importers are 4 to 6 times less likely to incur a security or
compliance examination. However, as we reported in October 2009, the
incentives to join C-TPAT could diminish with the implementation of 100
percent scanning because C-TPAT members would not receive the benefit
of fewer examinations.\4\ According to a survey conducted in 2007 by
the University of Virginia, the most important motivation for
businesses joining C-TPAT was reducing the time and cost of cargo
getting released by CBP.\5\ This benefit could be diminished by the 100
percent scanning requirement, though, since under such a requirement
all cargo is to be scanned regardless of C-TPAT membership. This view
was shared by 3 of the 6 C-TPAT members we interviewed for our October
2009 report who stated that there would be less incentive to maintain
membership or for other companies to join C-TPAT if the 100 percent
scanning requirement were fully implemented.
---------------------------------------------------------------------------
\4\ GAO, Supply Chain Security: Feasibility and Cost-Benefit
Analysis Would Assist DHS and Congress in Assessing and Implementing
the Requirement to Scan 100 Percent of U.S.-Bound Containers, GAO-10-12
(Washington, DC: Oct. 30, 2009).
\5\ University of Virginia, Customs-Trade Partnership Against
Terrorism (C-TPAT) Cost/Benefit Survey (August 2007).
---------------------------------------------------------------------------
Question 3. In your research, has CBP been able to hold C-TPAT
members accountable for their security procedures? Is the C-TPAT
validations process working?
Answer. As part of the program, CBP requires C-TPAT members to
submit plans for their security measures, and to hold members
accountable, CBP conducts a validation to ensure that members have
implemented the security measures as planned. In conducting a
validation, CBP may make recommendations for improvement. In some
cases, CBP has determined that the security measures have not been
implemented and has suspended or removed companies from the program.
Since we completed our last review of the C-TPAT program in 2008,
we do not have current information regarding how the validations
process is working. However, based on monitoring we have conducted of
the program since we issued our report, we have verified that CBP has
taken a number of actions to strengthen the C-TPAT program and better
ensure its process for validating C-TPAT members' security procedures.
In response to our recommendations, CBP made changes to its records
management system to automatically document time-sensitive decisions
mandated by the Security and Accountability For Every (SAFE) Port
Act.\6\ At the time of our follow-up in October 2009, CBP demonstrated
that its system tracked 90-day certification, validation within 1 year
of a company being certified, and re-validation within 3 years of the
initial validation. According to CBP's fiscal year 2013 budget request,
CBP is planning to extend the re-validation cycle from 3 years to 4
years in an effort to save $5 million in fiscal year 2013. The impact
that this potential change will have on C-TPAT members' security
practices is unknown.
---------------------------------------------------------------------------
\6\ Pub. L. No. 109-347, 120 Stat. 1884 (2006).
---------------------------------------------------------------------------
Question 4. In your testimony, you note that GAO has recommended
saving Government funds by migrating the Container Security Initiative
(CSI) to a more remote-screening system based upon reciprocity
agreements with foreign partners.
How much money has CBP saved by moving screening personnel back to
America?
Answer. CBP has saved approximately $35.4 million cumulatively over
fiscal years 2010 and 2011 as a result of the changes to its staffing
model, which included transferring Container Security Initiative (CSI)
positions from overseas to the National Targeting Center--Cargo in the
United States. We recommended in April 2005 that CBP revise the CSI
staffing model to consider what functions needed to be performed at
overseas CSI ports and what functions could be performed remotely in
the United States.\7\ In response to our recommendation, CBP issued a
human capital plan in May 2006 that did not specify that CSI targeting
positions be located at CSI seaports, thus recognizing that officers
could support CSI ports from the National Targeting Center--Cargo in
the United States.
---------------------------------------------------------------------------
\7\ GAO, Container Security: A Flexible Staffing Model and Minimum
Equipment Requirements Would Improve Overseas Targeting and Inspection
Efforts, GAO-05-557 (Washington, DC: Apr. 26, 2005).
---------------------------------------------------------------------------
Question 5. Could CBP move further with this initiative and move
even more of their personnel back to America and migrate the CSI
program to a more reciprocity-based system? Would this save additional
taxpayer dollars?
Answer. Relocating additional CSI positions from overseas ports to
the United States could result in cost savings; however, according to
CBP officials, it could also affect how the CSI program works and its
effectiveness. According to CBP officials, cost savings may be realized
in expenses, such as housing, by moving certain CSI functions and
positions back to the United States, but some costs (such as office
space and communications equipment) would not be eliminated entirely
unless CBP removed all officers stationed at each foreign port.
According to CBP officials, if CBP were to relocate its officers from
all CSI ports, one of the primary methods for ensuring the
effectiveness of CSI operations, namely the working relationships
between CBP targeters and host government officials, would also be
eliminated. In visiting ports as part of work issued in January 2008,
we observed that relationships with host governments have improved over
time, leading to increased information sharing between governments and
a bolstering of host government customs and port security practices,
among other things.\8\ CBP officials also explained that if there are
no CBP officers stationed at a foreign port, CBP would have to rely
more heavily on foreign governments' cooperation in conducting cargo
examinations, which would require negotiations with the host
governments before changing the operations at the port, and this could
be a difficult and time-consuming process. According to CBP officials,
CBP plans to fill some existing vacancies in overseas CSI positions,
and upon filling those positions it plans to maintain its level of
overseas staffing for the CSI program. These officials also explained
that CBP has no significant changes planned for the program, such as
expanding or reducing the number of participating ports.
---------------------------------------------------------------------------
\8\ 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, DC: Jan. 25,
2008).
---------------------------------------------------------------------------
Question 6. In your testimony, you mentioned two programs where CBP
spent significant sums and then canceled the programs with little to
show in the way of achievements. You specifically note that the DHS
spent $200 million developing a new advanced spectroscopic portal
(ASP), but then canceled the program before updating their cost-benefit
analysis. In addition, DHS spent $113 million on the cargo advanced
automated radiography system (CAARS) and then canceled the program.
What happened here? Why were such vast sums expended on this new
technology and then DHS turned away from these ideas? How can we
prevent this type of waste in the future?
Answer. To prevent these types of situations from recurring in the
future, we reported in September 2010 that DHS should consider
incorporating lessons learned, identified by our reviews of the ASP and
CAARS programs, in its continuing efforts to develop technology for
detecting nuclear materials in vehicles and containers at U.S. ports of
entry. These lessons learned included: (1) Enhancing interagency
collaboration and coordination, (2) engaging in a robust Departmental
oversight review process, (3) separating the research and development
functions from acquisition functions, (4) determining the technological
readiness levels before moving forward to acquisition, and (5)
rigorously testing devices using actual agency operational tactics
before making acquisition decisions. In addition, we are engaged in on-
going work reviewing the results of ASP testing conducted after our
last report on the ASP program in 2009. As part of this on-going work,
we will identify lessons learned from the ASP testing campaign. We
expect to report on the results of this work by the end of 2012.\9\
---------------------------------------------------------------------------
\9\ We are conducting this work for the Ranking Members of the
Subcommittee on Investigations and Oversight and Subcommittee on Energy
and Environment; Committee on Science, Space, and Technology; House of
Representatives.
---------------------------------------------------------------------------
Regarding the ASPs, we reported in June 2009 that many major DHS
investments, including the ASP program, had not met the Department's
requirements for basic acquisition documents necessary to inform the
investment review process. As a result, DHS had not consistently
provided the oversight needed to identify and address cost, schedule,
and performance problems in its major investments.\10\ Moreover,
emphasizing expediency in replacing existing equipment with new portal
monitors led to an ASP testing program that initially lacked the
necessary rigor. Additionally, we reported that DHS's decision to
replace existing equipment with the ASPs was not justified due to the
marginal improvement offered by the new technology and the potential to
improve the current-generation portal monitors' sensitivity to nuclear
materials, most likely at a lower cost. For example, though preliminary
test results showed that ASPs performed better than current-generation
portal monitors in detecting certain weapons-usable nuclear materials
concealed by light shielding, as approximated by the Department of
Energy's threat guidance, differences in sensitivity were less notable
when shielding was slightly below or above that level. We also reported
in November 2009 that the ASPs experienced serious problems during
testing.\11\ For example, the ASPs had an unacceptably high number of
false positive alarms for the detection of certain high-risk nuclear
materials. In addition, ASPs experienced a ``critical failure,'' which
caused an ASP to shut down. Importantly, during this critical failure,
the ASP did not alert the CBP officer that it had shut down and was no
longer scanning cargo. As a result, were this not in a controlled
testing environment, the CBP officer would have permitted the cargo to
enter the country thinking the cargo had been scanned, when it had not.
Finally, the Director of DHS's Domestic Nuclear Detection Office (DNDO)
indicated during a July 2011 hearing that the speed of trucks passing
through the ASP was an additional problem and contributed to DNDO's
decision to cancel the ASP program as originally conceived.
---------------------------------------------------------------------------
\10\ GAO, Combating Nuclear Smuggling: Lessons Learned from DHS
Testing of Advanced Radiation Detection Portal Monitors, GAO-09-804T
(Washington, DC: June 25, 2009).
\11\ GAO, Combating Nuclear Smuggling: Recent Testing Raises Issues
About the Potential Effectiveness of Advanced Radiation Detection
Portal Monitors, GAO-10-252T (Washington, DC: Nov. 17, 2009).
---------------------------------------------------------------------------
Regarding CAARS, in September 2010, we reported that DHS's decision
to cancel acquisition of the CAARS program in December 2007 was due to
the system's inability to satisfy operating requirements at ports of
entry coupled with technological shortcomings. Officials from DNDO and
the system's end-user, CBP, acknowledged that they had few discussions
regarding operating requirements at ports of entry during the first
year or more of the program. As a result, DNDO pursued the acquisition
and deployment of CAARS machines without fully understanding that they
would not fit within existing primary inspection lanes at CBP ports of
entry. In addition, regarding CAARS technology, the development of the
system's algorithms (software)--a key component needed to identify
shielded nuclear materials automatically--did not mature at a rapid
enough pace to warrant acquisition and deployment.
Questions for Stephen L. Caldwell From Honorable Mike Rogers
Question 1. GAO has done extensive work to review and test the
Transportation Worker Identification Credential (TWIC) program.
What do you see as the major deficiencies in the program?
Answer. As discussed in our May 2011 report, the TWIC program faces
several challenges in meeting its mission needs.\12\ We reported that
internal control weaknesses governing the enrollment, background
checks, and use of TWIC potentially limit the program's ability to
provide reasonable assurance that access to secure areas of Maritime
Transportation Security Act (MTSA)-regulated facilities is restricted
to qualified individuals. Key program weaknesses included an inability
to provide reasonable assurance that only qualified individuals can
acquire TWICs or that once issued a TWIC, TWIC-holders have continued
to meet eligibility requirements. Moreover, internal control weaknesses
in TWIC enrollment, background checks, and use could have contributed
to the breach of MTSA-regulated facilities during covert tests
conducted by GAO's investigators.
---------------------------------------------------------------------------
\12\ GAO, Transportation Worker Identification Credential: Internal
Control Weaknesses Need to Be Corrected to Help Achieve Security
Objectives, GAO-11-657 (Washington, DC: May 10, 2011).
---------------------------------------------------------------------------
Question 2. Do you think that getting the regulations on TWIC
readers pushed out of the Department and getting these readers
installed in our ports will help rectify some of these deficiencies?
Answer. Implementation of a card reader system will not address the
enrollment, background checks, and deployment weaknesses we identified
in our May 2011 report. These weaknesses could render the electronic
reader check moot, by allowing unqualified individuals to acquire
authentic TWICs using a counterfeit identity and then using the TWICs
for accessing MTSA-regulated facilities and vessels using electronic
card readers.\13\ If an individual presents an authentic TWIC acquired
through fraudulent means when requesting access to the secure areas of
a MTSA-regulated facility or vessel, the cardholder is presumed to have
met TWIC-related qualifications during a background check. Further, the
extent to which the use of TWIC readers will help identify the use of
counterfeit TWICs (that is, TWICs produced independently by individuals
seeking to circumvent port security) at MTSA-regulated facilities and
vessels will largely depend on how each card reader system is
implemented in practice. The ability of readers to identify counterfeit
TWICs depends on the sophistication of the counterfeit and the mode
that the reader is set to when reading a TWIC. There are four mode
settings. Each increasing mode requires a longer time to read the TWIC
but also provides greater assurance that the TWIC is authentic and
belongs to the person that is presenting it. Consequently, there is a
tradeoff between throughput and security. For example, at lower
settings/modes the reader is not comparing the cardholder's fingerprint
to the fingerprint stored on the card, but the card is read faster than
when the reader is set to read the fingerprint. We recommended that DHS
perform an internal control assessment of the TWIC program by: (1)
Analyzing existing controls, (2) identifying related weaknesses and
risks, and (3) determining cost-effective actions needed to correct or
compensate for those weaknesses so that reasonable assurance of meeting
TWIC program objectives can be achieved.
---------------------------------------------------------------------------
\13\ In commenting on our May 2011 report, DHS stated that document
fraud is a vulnerability to credential-issuance programs across the
Federal Government, State and local governments, and the private
sector.
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