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Remarks by CBP Commissioner W. Ralph Basham on Container Security at the Center for Strategic and International Studies

It is an honor to be here in this prestigious institution with some of the foremost thinkers and experts on global issues – and to be asked to speak about CBP’s efforts to secure global trade.

I am particularly honored to be sharing the stage with my good friend and predecessor, Rob Bonner.

Those of you who are familiar with Rob know that we are here today talking about many of the concepts he put forward – and the actions he took after 9/11 to secure the borders of our nation.

A list of what he set in motion as Commissioner of U.S. Customs in the days following 9/11 is, to say the least, very impressive:

  • Getting advance information,
  • Creating a center to analyze that information for risk of terrorism,
  • Partnerships with other countries – through the Container Security Initiative, which as he mentioned, he announced right here at CSIS, and
  • Our partnership with the trade community – C-TPAT, the Customs-Trade Partnership Against Terrorism.

These initiatives were soon followed by a push to install sophisticated technology at our ports of entry to detect radiation and imaging equipment to detect anomalies.

And, he didn’t stop there. He knew the U.S. would not be safe if other countries didn’t adopt those same security principles. So he began reaching out to our international trading partners and to the World Customs Organization—and two years ago, the WCO adopted the Framework to Secure and Facilitate Trade—which effectively internationalizes the strategy.

And last October, Congress gave the final nod of approval to the “house that Rob built” when it passed the SAFE Port Act, which embraces and codifies many of the concepts and initiatives that Customs instituted under Rob’s leadership.

And we are fortunate he is still lending his guidance and advice on issues of national security. He is truly someone who has left indelible footprints on this important issue of securing global trade.

The Strategy: The Next Generation
While our accomplishments to secure the international shipping lanes are remarkable, today we face other hurdles to meet the mandates of the SAFE Port Act, to further strengthen the major programs of our strategy, and more importantly, to envision and plan for challenges we will face down the road.

Today, those of you in this room—the thinkers and doers on the issue of homeland security—must be every bit as forward thinking as our colleagues were in 2001.

The strategy we have today and the strategy U.S. Customs developed after 9/11 is a layered, risk-based strategy. A strategy that extends our borders beyond our physical borders. A strategy that allows us to target for risks—and inspect, if necessary—cargo and passengers arriving in the U.S. A strategy that established twin goals of securing our borders without stifling trade and the economy.

Since 9/11, we’ve accomplished a lot to build that layered defense. When I came on board, I felt that this was a sound strategy. I believed it was the right strategy and that CBP was moving in the right direction. In the year I’ve been Commissioner, I haven’t had any epiphanies that change those initial thoughts.

Coming on board, I knew—and the SAFE Port Act soon confirmed—that my task would be to take those initiatives to the next level—and to plan for the long term.

The SAFE Port Act also came with many requirements that effectively defined this year’s agenda for CBP.

And, before I get into a discussion on the issue of today’s meeting—Container Security Devices—let me mention some of the progress we’ve made to ratchet up our strategy by collecting more information, working with our partners overseas and working with the trade community.

Advance Information – 10+2
As you know, the SAFE Port Act mandates that we collect more detailed information prior to cargo lading to improve our risk targeting, and that we consult with COAC—the Commercial Operations Advisory Committee—and the trade community in general—on an extensive list of issues, programs, and plans. And, we are doing just that.

We have long recognized the need to go beyond the 2002 Trade Act data requirements to gain greater transparency into the supply chain—back to the point of stuffing.

Better information, means better risk management. And better risk management, leads to improved security and improved facilitation of legitimate trade.

For three years now, we’ve been engaged in discussions with the trade over what additional data elements would improve our ability to assess the risk for terrorism.

The work originated in the Trade Support Network‘s Supply Chain Security Committee, which worked diligently on this issue, to identify and define specific data elements that could enhance CBP’s targeting efforts.

In November 2006, this effort moved under the banner of the Commercial Operations Advisory Committee—COAC—to help us refine the definitions of the 10 data elements, to identify potential operational challenges, and to provide advice on the best means of reporting the information to CBP.

COAC presented its recommendations to CBP in February of this year, and we have been working internally on developing the Notice of Proposed Rule Making since then. We’ve made great progress on this initiative, and we have submitted a draft to the Department for its review and comment. We hope to complete this process in the near future.

Like the Trade Act, and many of the new security measures we have implemented over the past five years, 10 + 2 will be phased in. With these new reporting requirements, we will continue to work with the trade to make sure all issues are resolved before we go to full compliance.

Container Security Initiative and Secure Freight Initiative
We’re also making exciting progress overseas, as well. CSI will soon be deployed in 58 foreign ports, which will cover 85 percent of the maritime containerized cargo coming to the U.S. And, we are now implementing the next generation of CSI—the Secure Freight Initiative—or SFI—which integrates radiation detection and container imaging.

Information from this technology, combined with our normal analysis of manifest data, will provide a comprehensive, real-time approach to assessing the risk of every container bound for the U.S.

SFI meets the SAFE Port requirement to conduct an overseas integrated scanning pilot program.

SFI will be fully deployed in three ports around the world—Port Qasim, Pakistan; Port Cortes, Honduras; and Southampton, United Kingdom, with some limited capacity in four additional ports. This project creates an integrated network of radiation detection and container imaging equipment.

This initiative is the culmination of our work with other Government agencies, foreign governments, the trade community, and vendors of leading edge technology. And, like all our security initiatives, this increased information will help facilitate trade because questions about shipments that appear to be high risk can be resolved quickly and effectively.

100 Percent Scanning
Here, let me make a few observations about discussions underway in Congress about 100 percent overseas scanning.

At CBP, we believe this concept is fundamentally flawed.

As I have described, since 9/11, we have created a risk management system that is currently performing the task of separating high risk from low risk shipments very credibly.

We believe there is no other viable alternative to making informed decisions about which of the more than 11 million containers entering the U.S. each year by sea poses a security risk, and therefore, required further inspection.

Trying to legislate a requirement that all 11 million plus containers undergo image scanning and radiation detection monitoring prior to leaving a foreign port just does not make sense. The impact on the flow of commerce would be enormous and the result would be lower profits and higher transportation costs for U.S. importers.

It would hand the terrorists a victory on one of their key aims—inflicting serious damage on the U.S. economy—without them having to take any action whatsoever.

At a minimum, Congress should be willing to wait until we have the results of the overseas scanning pilot currently underway in the three ports I mentioned.

The pilot will give us information on the technical feasibility of 100 percent scanning, the impact on supply chains, the security gains, if any, and the costs to both the public and private sectors.

I am also concerned about our credibility with our international partners. When several nations agreed to partner with us in testing the 100 percent concept, it was done with the understanding that the findings would drive further discussions regarding a logical path forward. Mandating 100 percent scanning prior to concluding this first phase, will undermine the credibility of our current initiative.

C-TPAT
C-TPAT, our partnership with the trade, continues to evolve with refined security criteria, three tiers of benefits for importers, and more supply chain security specialists to conduct validations.

C-TPAT’s more than 7,000 members account for 45 percent of imports into this country. And, in the next few years, C-TPAT will evolve even further to respond to the widespread demand for participation.

We’ve validated 78 percent of those certified partners and expect to reach 100 percent by the end of the year.

Once we finish the first validations this year, we will begin to re-validate companies, and we will conduct revalidations on certified C-TPAT partners once every three years. We will also be conducting yearly revalidations on all U.S./Mexico highway carriers, our riskiest enrollment sector. This will ensure that our partners have adopted stronger supply chain security measures across their international supply chains.

The SAFE Port Act authorizes C-TPAT and provides guidance on how the program will evolve in the future. COAC, too, is conducting discussions on implementation of SAFE requirements in this area.

These discussions included the development of a 3rd Party Validation Pilot Program, and on June 29, CBP announced the 10 companies that were selected to participate in the program.

We will also continue to pursue mutual recognition between C-TPAT and foreign business partnership programs through the WCO Framework. Several countries are pushing their programs toward higher standards, and I am pursuing the possibility of partnerships with these countries.

In fact, two weeks ago, at a meeting of the World Customs Organization in Brussels, I signed the first Mutual Recognition Agreement with New Zealand. We are actively engaged with Jordan and the EU in developing a mutual recognition regime. Japan and Canada have also expressed interest in the concept.

Container Security Devices and Challenges Ahead
But, for all that we have accomplished in so many areas, here we are nearly six years after 9/11, and one of our fundamental goals for improving homeland security still lies just beyond our grasp.

Since the terrorist attack on our soil, one of our most-feared scenarios has involved terrorists hiding the components for a nuclear or radiological bomb inside one of the shipping containers that enter into and pass through our seaports each year.

When C-TPAT and the layered strategy were conceived, CBP envisioned the development of a container security device to detect whether containers have been tampered with while being transported.

This capability would be the vital link that would close the loop between CBP’s trusted partnership program with the trade, information-based risk assessment, and secure ports. What we’ve called “Smart Box” has yet to be developed.

CBP is currently working with the Science and Technology Directorate of the Department of Homeland Security to determine the technical and administrative requirements for the Container Security Device, the “CSD.”

It’s important that this device be part of a fully integrated process that will support its use.

I expect to set forth CBP’s requirements for CSDs soon. Shortly thereafter, we expect to test CSD technology to see if the available technology meets our requirements. We intend to move quickly, because CSDs have the promise to truly increase security of cargo shipments. The testing phase would be completed within about 60 to 90 days, and we intend to promptly evaluate the results.

The use of “Smart Boxes,” that is, the use of CSDs, if they meet our requirements, will become part of the C-TPAT program.

And, for the first time, this will link C-TPAT security at point of stuffing, with a more secure container while it travels from the point of stuffing to the foreign seaport, ultimately to the port of arrival in the United States. Some U.S. importers are already doing this.

Think of it: CSDs hold the promise of securing a container during its journey from a C-TPAT compliant manufacturer’s loading docks overseas, all along the inland dray or transport to the foreign seaport, to the U.S. seaport.

If the container has been breached or opened along this journey, CBP will know.

CBP will be able to detect containers that have been tampered with en route, which are by definition “high risk.”

We have never been able to do this before.

But, first, we need to test and see that there is a CSD that meets our requirements.

I am cautiously optimistic.

When we have an effective device that meets our requirements, then we will have to answer a number of policy questions about how we employ this technology. Some of this is fairly clear.

As part of C-TPAT’s dynamic improvement of supply chains, use of such a device should, at a minimum, be viewed as a C-TPAT best practice.

But do we make it part of C-TPAT’s Tier 3 or is the use of a CSD that meets CBP requirements Tier 3 Plus? Or do we create a 4th Tier?

Will we require its use or will its use be an incentive or pre-condition for greater C-TPAT benefits?

To be effective, the device would be activated at the point of stuffing of a container overseas.

There would be little increase in the security of a supply chain unless CSDs are linked to C-TPAT security criteria required at the point of stuffing.

Although I expect that there will be relatively few false positives, still we will need to figure out how we will deal with them.

CBP’s Office of Field Operations has done an outstanding job of establishing protocols and responding to large numbers of radiation reads from our Radiation Portal Monitors, so I am confident we will be able to handle what likely will be less than 1 or 2 percent false positives from CSDs.

CSD readers will be deployed at US ports of arrival, but if CSDs prove themselves, will we position readers overseas at CSI ports?

These are questions that we will need to address as we go forward.

The main point here is: CBP has a long history of successfully rolling out programs that minimize trade impact. We did that with the 24-Hour and Trade Act Rules and with the Automated Commercial Environment—ACE.

CSDs will be no exception.

We will make sure that there is a sound and sensible rollout strategy for CSDs and their incorporation as a best C-TPAT practice.

But we also know that implementing the Container Security Device—or Smart Box—adds another layer to our defense and is a case where we should not allow the perfect to be the enemy of the good. The perfect technology is probably a long way off and may prove to be far too expensive.

CBP’s original vision involved a device that sent a signal when a container’s doors had been opened or breached in transit, a signal that could be read by CBP with either a fixed or handheld reader. The signal would tell CBP which containers pose a potential security issue, warranting an inspection.

It is important to note that the deployment of CSD technology is part of a broader C-TPAT supply chain security process that ensures the integrity of the shipment before the CSD is activated.

CSDs will help provide the supply chain security “envelope” that Secretary Chertoff has talked about, and it will close a gap in C-TPAT’s secure supply chain criteria.

And CSDs will move us one step closer to realizing the “Green Lane.” Use of CSDs is an important element of the “Green Lane” concept, and the fact of the matter is, there can be no “Green Lane” without CSDs, without “Smart Boxes.”

And the beauty of CBP’s Smart Box system is that it is voluntary. Companies can choose the relatively small cost of simple container security devices, approved by CBP, that will lead to faster, more predictable customs processing, or they can choose the cost of less predictable customs clearances and potential delays.

Device manufacturers have an incentive to keep the price low, because companies will not be required to use the devices. But those who do will be entitled to greater benefits and it will narrow the haystack of what CBP needs to inspect.

The good news is that CBP will be publishing its requirements for Container Security Devices soon.

This means that we will soon have a roadmap for completing CBP’s vision for a secure loop between trusted companies, trusted ports, and trustworthy transportation.

We could soon realize better port security using today’s technology, and at reasonable cost, without slowing down the continuous flow of global maritime trade.

No Silver Bullet
That being said, we all know that there is no silver bullet—no one fix or solution that is 100 percent sure.

But taken together—more information, more overseas scanning and inspections, more integrated targeting, more sophisticated technology, including a Smart Box, and more partners in the trade community around the world—add multiple layers to our defense and provide a more effective defense of our homeland and of the entire global supply chain.

All these initiatives work together as a deterrent, making it harder for terrorists to penetrate security and put a bomb—or components for a bomb—in one of the millions of containers that move in and out of ports around the world on a daily basis.

We still face significant challenges and limitations about what we can humanly do to secure the containers, the ports, and our nation.

As we work toward the green lane concept of no inspections once companies have satisfied certain rigorous requirements, we also know in the United States—and in ports around the world—our infrastructure can only handle so much traffic.

Our ports were built in—and for—another age—certainly not the age of global terrorism. And as we go forward, we know that what we are planning for today—and in the future—is only a snapshot in time.

Six years ago, roughly the time when Commissioner Bonner came onboard, the U.S. imported 7 million containers. Today that number has increased to almost 12 million. And with the prediction of a 5 to 6 percent annual growth rate, those numbers could double to 24 million containers by 2015—and triple by 2025.

But, as I said at the outset, I believe we are on the right track. We have been able to provide increased security, despite increasing trade volumes, and that is because we are working with our partners here in the U.S. and around the world to protect the global supply chain.

The consensus on the seriousness of the terrorist threat—and the willingness of countries to join us in taking action is an amazing feat unto itself.

Conclusion
Since I raised my hand and took the oath of office as Commissioner of Customs and Border Protection, the constant nagging question in my mind is: have we done everything possible to protect our nation, the American people, and our economy from terrorism.

Every program, every improvement, every partnership we’ve instituted has been designed to achieve that balance of security and trade facilitation.

Everyday we walk a tightrope to achieve that balance.

Every time we look at security, we look at facilitation.

Because we know that if security disrupts trade, it impacts our economy—and that means the bad guys have won.

And the terrorists don’t care how they win—whether it’s flying planes into buildings or blowing up a commuter train or detonating suicide vests in a crowded mall. They are smart enough to know that stopping trade, by any means, hurts the economy, and thereby hurts America and our allies—and that’s their goal.

Six years after 9/11, with no terrorist attack on U.S. soil, it’s tempting to let the urgency of this threat fade to the background with all the other news swirling around our nation and the world.

I know I don’t have to remind you that the threat is ever present. It is real and the enemy is constantly looking for any loophole, any vulnerability, any weakness in our defense. The recent incidents in the UK and Glasgow certainly prove that point.

I frequently tell our employees that as dedicated and committed as we are, our enemies are just as dedicated, just as committed, and just as passionate about achieving their goal—which is to attack us in our homes, in our workplaces, in our places of worship, and to attack our leaders.

Our mission is to ensure that the terrorists don’t succeed in their mission.

Although our strategy has made us safer, we are not yet safe. And, we should never allow ourselves to be lulled into a false sense of security.

For me—and I’m sure for Rob and many of you here, too—it’s about our children, our grandchildren, and their future. I assure you I will do everything within my power to make sure that my grandchildren—and yours—inherit a free America.

An America that is safe, secure and open.

An America where all our children can grow up to realize their hopes and dreams.

For me, anything less is unacceptable.

Remarks by U.S. Customs and Border Patrol Commissioner, W. Ralph Basham. Originally published on July 11, 2007 on CBP.gov.