CSI, C-TPAT face budget cuts

CSI, C-TPAT face budget cuts CBP officials say reductions will not impact integrity of cargo security programs.

By Eric Kulisch

      Some of the U.S. government’s signature international cargo security programs are being modified and would receive less funding if Congress approves changes presented in the Obama administration’s budget request for fiscal year 2011.
      In the wake of Homeland Secretary Janet Napolitano’s decision late last year to postpone implementation of a legislative mandate to scan all inbound containers at foreign ports, the Department of Homeland Security now intends to scale back the Secure Freight Initiative (SFI), and cut millions of dollars from the Container Security Initiative and Customs-Trade Partnership Against Terrorism in an effort to make the programs more efficient.

Napolitano

      The three security programs are all due ‘for a re-look and a renewal of purpose, and multiplication of the original promise’ to improve supply chain security without slowing legitimate trade, Customs and Border Protection Commissioner Alan Bersin told reporters covering a trade-related meeting in Philadelphia.
      ‘That’s not to say these programs haven’t served well. They have,’ but CBP needs to develop more flexible inspection arrangements and evaluate the mix of technology, personnel and overseas partnerships ‘to see whether or not we can rebalance that to get a more effective and efficient result,’ Bersin said.
      Overall, the department requested $84.4 million for international cargo screening, down $77.5 million, or 48.4 percent, from the 2010 enacted funding level. The decrease includes the elimination of a $10.8 million contract for obtaining information on the financial solvency of trading companies and instead relying on open and internal sources of information.
      SFI is a limited pilot program started in 2007 by CBP at a handful of foreign ports to test the feasibility of integrating radiation portal monitors and non-intrusive imaging equipment to scan 100 percent of U.S.-bound containers at low-volume sites.
      CSI is designed to push the borders out to foreign ports for pre-departure inspections. Small teams of Customs officers are stationed in 58 ports through bilateral agreements where they use risk analysis of shipping data to identify a small subset of suspicious U.S.-bound volume and make requests for automated scans by local authorities. Congress has questioned the effectiveness of the program because less than 1 percent of boxes are inspected overseas.
      C-TPAT is a voluntary program for importers that agree to follow minimum supply chain security standards, and require suppliers and transportation service providers to follow their approved security plans, in exchange for a reduced likelihood of CBP inspections and front-of-the-line processing for inspections, among other stated benefits. More than 9,700 companies participate in the program. The idea is create a universe of known, trusted shippers that do not need to have their cargo scrutinized on a regular basis so that border officers can devote their attention to unknown and high-risk shipments.
      In the 3,985-page budget request for the Department of Homeland Security, CBP proposes to reduce funding for the SFI by $16.6 million and convert three of the five test ports (Puerto Cortes, Honduras; Southampton, Great Britain; and Busan, South Korea) back to CSI protocols. During the fiscal year that begins Oct. 1, CBP will begin to phase out operations at the three ports and relocate personnel back to the United States. That means only cargo that is targeted as high risk will be inspected as opposed to 100 percent of cargo under SFI. The agency also plans to maintain full exam rates at Port Qasim, Pakistan, and Salaleh, Oman. The latter location provides CBP the opportunity to experiment with ways to inspect transshipment cargo.
      While many other countries view 100 percent scanning as a big impediment to trade, Pakistan embraced SFI as a way to certify exports to the United States are safe and attract buyers who would otherwise be reluctant to do business in a country known as a hotbed of terrorist activity and a haven for al Qaeda.
      Port Qasim is different than other SFI locations because images and radiation data are electronically transmitted to CBP’s National Targeting Center, where officers make determinations about whether a cargo box should undergo further inspection. And CBP uses remote video feeds to observe container inspections by Pakistan Customs. Alarms in other ports are resolved by CBP and foreign customs officers on the ground.
      Although CBP is opposed to wholesale use of 100 percent scanning in 700-plus ports around the world, it plans to selectively use the technique in strategic locations where the benefits of additional data to rule out risk outweigh the cost. Officials have previously said they are working with the Pakistani government to establish another scan-all operation in the port of Karachi.
      The U.S. border agency also plans to expand SFI to ports in Alexandria, Egypt; Aqaba, Jordan; and Shuaiba, Kuwait, Todd Owen, executive director of cargo and conveyance security, said March 22 in a presentation to the American Association of Port Authorities’ spring conference in Washington.
      CBP also wants to cut $50.7 million from CSI because it said the program has matured to the point where fewer overseas personnel are necessary. Permanently stationing U.S. personnel overseas is very expensive. The agency plans to rely more heavily on its National Targeting Center in Virginia and technology for remote targeting of ocean containers for inspection. The NTC ranks shipments for risk-based on automated analysis of ocean manifests, import data and other intelligence. Officials also plan to increase the number of locations that follow the Port Qasim model for transmitting X-ray images and radiation readouts to the NTC for analysis, and make greater use of video for remote monitoring of box scanning by foreign customs services.
   ‘As CSI activities transition to a more virtual environment, personnel and mission support resources stationed overseas will be relocated to U.S. domestic ports. This will allow the program to become more efficient and less costly,’ the DHS budget document said.

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   Advancements such as rules requiring the submission of advance trade data from ocean carriers and importers, the development of the NTC, industry partnerships and enhanced information technology capability all occurred after CSI was launched in 2002, Owen explained in an interview.
   ‘The Automated Targeting System was in its infancy. So we needed to put people on the ground to look at manifests. But now with the information in our systems, we can target from anywhere,’ he said.
   CBP will still keep a small number of officers in foreign countries to coordinate and monitor container exams with host governments.
   Owen said the agency actually started bringing personnel home in January 2009 and that the 2011 budget is a continuation of that trend.
      ‘We expect to still remain at all locations, but with a much more limited footprint and do more with technology where we can,’ he said.
   CBP has replicated a Qasim-style virtual inspection system in New Zealand, Australia and Israel, Owen said. Under the collaborative arrangements, CBP analyzes data and notifies the host government of containers it wants inspected. The foreign customs service transmits the images for CBP to review and clear the shipment in near real time.
   ‘We’re looking to move to that type of set up where we don’t even need any people,’ he said.
   CBP plans to periodically conduct risk evaluations of CSI ports to assess the level of staffing and other resource needs, according to the budget document.
      CSI’s retrenchment won’t reduce the effectiveness of the security program because it was undercut from its inception, according to Stephen Flynn, president of the Center for National Policy, and a gadfly on homeland security issues.
      ‘On the one hand it was a fairly sensible approach to safeguard ships and ports by doing inspections at the point of loading. The central paradox CBP faced, though, was you’re relying on the integrity and competence of local customs officials. So the notion initially was they could hang around when these inspections are being done,’ he told American Shipper.
      CBP, he said, would have been better off sending personnel to overseas stations that had language and culture training instead of directly pulling them from U.S. ports of entry, but that would have been a much more expensive alternative given the number of participating ports.
      ‘CBP looked at that and realized they didn’t want to make that kind of investment because they knew it would come out of other missions,’ Flynn said. Instead, most of the high-risk inspections are made when the containers reach a U.S. port.
      ‘And because of that half-pregnant approach ‘ they’re not doing serious inspections ‘ the logic became they weren’t doing enough inspections to justify the amount of manpower.’
      The challenge of having enough staff on hand to do robust targeting is one of the reasons Flynn said he has spent the past few years advocating a private sector inspection model under which marine terminals take responsibility for operating the inspection systems and passing on red flags to customs authorities. CBP would then only need enough manpower to oversee the third-party operator.
      ‘Because we’ve gone to this heavier reliance on data to support targeting, it justified in their view a scaling back of an inspector presence and physical equipment presence overseas. But you still have to make the case that the targeting is effectively isolating risk. And it really hasn’t been subjected to that kind of scrutiny,’ the border security analyst said.
      SFI is also conceptually flawed, he said, because the foreign government or terminal operator is simply acting as a landlord that hosts equipment paid for by the U.S. government. While SFI demonstrated it’s possible to reliably introduce non-intrusive inspection equipment into gate operations without disrupting throughput, the problem for CBP is what to do with the data. The agency never wanted too much raw data to analyze, he argued, because of the potential strain on resources and criticism it could face if a terrorist weapon slipped through the supply chain and was used to attack a U.S. city. Nonetheless, its position is that cargo security is a governmental function and that private companies can’t be trusted to manage security.
      ‘They never had an appetite for that data. So they wanted commercial data they could leverage for several other types of missions,’ he said.
      In that vein, CBP last year implemented the Importer Security Filing regulation requiring shippers to provide advance data about their cargo’s origin, loading location, destination and contents.
      As for C-TPAT, CBP has requested that funding be reduced by $12 million ‘ $10 million for support funds such as equipment and supplies, and $2 million for the Web-based C-TPAT member portal ‘ to $51.1 million. The agency said the portal is mostly built out and that six of eight outside software programmers are no longer needed to simply maintain the system.
      Owen said C-TPAT also doesn’t need money for extra leases, computer links and other services because there are no plans to expand beyond the seven existing national offices.
      The agency plans to use the savings for other needs.