100% opposed

100% opposed World Customs Organization, European Union want repeal of U.S. scan-all mandate

By Eric Kulisch

   The World Customs Organization and the European Union are continuing their campaigns to convince the U.S. government to reverse the requirement to scan all sea containers, but homeland security analyst Stephen Flynn says such a move is unrealistic.
      Both multilateral groups have vigorously opposed the law since its enactment in 2007, arguing that the costs are not justified by any added security benefit, that cargo flows will be slowed and that other countries will have to bear the burden of securing the United States. Furthermore, they say, inspecting all containers undermines the risk-management approach to security that many customs administrations around the world have been trying to implement. WCO and EU officials, along with their counterparts at U.S. Customs and Border Protection, say the preferred method for preventing criminal or terrorist infiltration of the global shipping network is to target inspections on ocean boxes that pose the highest risk based on advance cargo information and intelligence.

Mikuriya

      WCO Secretary General Kunio Mikuriya pressed the United States to soften its stance on 100 percent scanning during a late October meeting with Acting CBP Commissioner Jayson Ahern in Washington and then again at WCO headquarters in Brussels with Homeland Security Secretary Janet Napolitano. Other officials continue to make their case during visits with congressional staff.
      During the past year, U.S. politicians have increasingly signaled that the law may have been a mistake, or that the 2012 deadline at least is unrealistic. In interviews and statements at hearings, several members of the House questioned whether overseas scanning of all imported containers makes sense.
      Congress expressed in the fiscal year 2010 Homeland Security Appropriations Act its understanding of the practical difficulties facing implementation of the 100-percent inspection mandate and directed CBP to report back by Feb. 1 on its strategy to achieve effective cargo and supply chain security.

Ahern

      'It has become increasingly clear that, at least for now, a 100 percent scanning goal is not feasible, and even if it were, would come at an unacceptably high cost monetarily and in the displacement of other efforts,' the House Appropriations Committee bluntly stated in its earlier version of the funding bill.
      Napolitano early in 2009 also suggested that the deadline should be pushed back because of significant technical, political, legal, environmental and funding challenges. In December she exercised her authority to grant waivers to ports that don't have a system in place to inspect containers with imaging technology.
      Opt-out clauses in the law cover issues of equipment availability, excessive false alarm rates, whether there is adequate port infrastructure to stage machines and cargo, the potential for disruption of trade and automatic detection capability.

Napolitano

   Until Napolitano's announcement, uncertainty over whether the United States would issue a blanket exemption or do so on a case by case basis after assessing more than 700 relevant ports around the world had left port operators in a quandary, Michael Schmitz, the WCO's director of compliance and facilitation, said Oct. 5 at a World Customs Forum in Seattle.
      A European port, for example, may invest in container imaging and radiation detection machines by 2012 to gain a competitive advantage attracting U.S.-bound cargo only to find other ports in the region have taken away their edge by asking for an exemption because they have not met the criteria, he said. The non-compliant ports would have an advantage because they could charge less to use their facilities.
      Large ports generally have some non-intrusive inspection equipment in place that can scan a portion of containers identified by risk management techniques, but couldn't check them all, Schmitz said after his presentation.
      The European Commission has determined that EU ports alone would have to spend 340 million euros ($503 million) for enough equipment to scan all U.S.-bound containers, and that they would incur annual operational costs of 180 million euros ($266.5 million), Walter Deffaa, director general of the Commission's Taxation and Customs Union, said Sept. 10 at a container security conference in Bremen, Germany.
      Studies conducted by the commission estimate that 100 percent scanning would add about 10 percent to the direct transport cost per shipment, Deffaa said.
      When the impact of delays for funneling containers to port areas with scanning machines or waiting to be processed are factored in the global cost for shippers and port operators equals $17 billion euros ($25 billion) per year, according to a copy of his prepared remarks.
      'If Europe were to follow the same approach as the U.S. and require 100 percent scanning at export for Europe-bound maritime containers, the cost would almost double,' he said. 'And if all countries worldwide would apply the 100 percent scanning policy, the total cost for the world would be about 150 billion euros ($222 billion) annually.'

'If all countries worldwide would apply the 100 percent scanning policy, the total cost for the world would be about 150 billion euros ($222 billion) annually.'

Walter Deffaa director general, Taxation and Customs Union, European Commission

      Deffaa said a comprehensive inspection regime is inefficient because it still is unable to detect biological and chemical threats, does not eliminate the possibility of tampering with cargo after the scan is performed and leaves unaddressed security for other modes of transport. Logistical challenges posed by marine terminals with limited space for staging containers on trucks or directly transferring boxes between ships, also reduce effectiveness, opponents argue.
      The WCO promotes its SAFE framework as a way for customs agencies around the world to standardize cargo data and risk management, and develop layered security approaches, such as trusted shipper programs, that go beyond a scan-all solution. The United States, through the Importer Security Filing rule, and the European Union are extending that approach by collecting more robust information about the origin and content of ocean imports. Customs officials believe the new targeting capabilities offer a viable alternative to imaging all containers.
      More customs agencies are at least starting to collect advance manifest information to help with their cargo analysis, Gareth Lewis, a technical officer at the WCO, told international traders at the Seattle conference.
      A recent WCO-commissioned survey of 29 countries shows two countries have fully completed implementation of an advanced cargo information environment as called for under SAFE, 45 percent are nearing completion, 31 percent are well underway and 17 percent, or five countries, are still in the early stage, he said.
      The survey was conducted by Crown Agents, a U.K.-based firm that provides technical assistance to international development agencies and governments.
      Asked why the U.S. Transportation Security Administration's rule to inspect 100 percent of cargo carried on passenger planes hasn't received the same level of condemnation as the container security mandate, Schmitz said much less trade moves by air and that there's an assumption that air cargo customers will be responsible for picking up the tab for inspections instead of being a pure government-run program.
      The WCO has agreed to help the International Air Transport Association voice similar concerns about the impact of inspections on air cargo movement, he said, because the organization wants to be a forum for all border management issues, not just those that are customs related.
      Flynn, who has testified about cargo security many times on Capitol Hill, said the political dynamic in Congress still does not favor a repeal of the scan-all law.
      Although there is some sentiment in Congress that it overreached on the inspection mandate, congressional leaders such as House Speaker Nancy Pelosi and Senate 'cardinals,' such as Charles Schumer of New York and New Jersey's Frank Lautenberg, still support the measure, Flynn said at the Seattle conference.
      According to his analysis, Napolitano may be able to get some wiggle room from Congress if she can show an alternative approach that accomplishes the law's intent, but lawmakers won't be satisfied by simply going back to a CSI regime that inspects less than 1 percent of containers.
      'You're asking the Democrats (who are generally perceived as weak on security) to take the political risk of reducing security' and open themselves to criticism, he elaborated in an interview.
      'Like Nixon going to China, it's a lot easier for Republicans to say we need to have some balance here. Democrats have a lot more difficult time without something as an alternative.
      'You're also potentially asking the president, who has a finite amount of political capital, to use some of that capital to get Congress to concede on a law signed by his predecessor without the overwhelming support of his party and the support of the opposition party.'
      Flynn said there can be a middle ground between the two extremes with his market-based approach to universal scanning, but adds that industry will be reluctant to endorse equipment and IT investments without a clear signal from the government.
      'Industry right now is looking at essentially a Tower of Babel' when it comes to non-aligned maritime cargo security and safety programs from different agencies, he said.
      They include the Department of Energy's Megaports Initiative that donates radiation portal monitors to other governments, the Defense Department's Proliferation Security Initiative for collaborating with other nations on boarding vessels at sea suspected of carrying ballistic missile or nuclear weapon technology, and the Coast Guard's push for, and subsequent enforcement of, international ship and port facility criteria while CBP takes a more bilateral approach that forces countries to supply their own detection equipment. Meanwhile, agencies such as the Food and Drug Administration and the Consumer Product Safety Commission want more advance data to get a handle on import safety.
      'People say, 'Why doesn't industry do it (scanning) if there's a business advantage?' but it's not a virgin piece of paper. They have to do it around this morass. And there's still a risk they make this investment and the government changes its mind and wants different technology.'
      A compromise that puts scanning in the hands of industry can provide shipment visibility in a less disruptive way than a government-run system for scanning all boxes, according to Flynn.
      'It's not that we need perfection,' but the American public is going to want to see progress in terms of inspection rates, he said.