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Home » Recent Law on Port Security

Recent Law on Port Security

by Joshua
December 1, 2008
in Uncategorized

The bill creating the new Department of Homeland Security (DHS), was passed by the Senate on November 19, 2002 and by the House on November 22, 2002, and signed into law as P.L. 107-296 on November 25, 2002. The DHS incorporates the Coast Guard, the former Customs Service, and TSA, among others. The Maritime Transportation Security Act of 2002 was passed by Congress on November 14, 2002 and signed into law as P.L. 107-295 on November 25, 2002.
The act creates a U.S. maritime security system and requires federal agencies, ports, and vessel owners to take numerous steps to upgrade security. The act requires the
Coast Guard to develop national and regional area maritime transportation security plans. It requires ports, waterfront terminals, and certain types of vessels to develop security and incident response plans with approval from the Coast Guard. The act authorizes CBP to require that cargo manifest information for inbound or outbound shipments be provided to the agency electronically prior to the arrival or departure of the cargo. This information may be shared with other appropriate federal agencies.
The legislation calls on the Department of Transportation to determine the level of funding needed for a grant program that will finance security upgrades. The act also authorizes $90 million in grants for research and development in improving cargo inspection, detecting nuclear materials, and improving the physical security of marine containers. A dispute over how to pay for the cost of enhancing port security was resolved by eliminating controversial user fee provisions from the conference report (funding issues are discussed further below). The Trade Act of 2002 (P.L. 107-210) was enacted into law on August 6, 2002.
Section 343 provides authority to CBP to issue regulations requiring the electronic transmission of cargo information to CBP prior to the shipments’ exportation or importation into the United States.

Addressing the Threat
A major concern for Congress is assessing whether the Nation is addressing the threat to maritime security with enough urgency. Despite the progress that has been made in strengthening port security thus far, many security officials still describe
CRS-15   seaports as “wide open” and “very vulnerable” to terrorist attack.44 Seaports, along with air cargo, general aviation, and mass transit were identified in a recent GAO report as the “major vulnerabilities” remaining in the nation’s transportation system.45
The GAO found that “an effective port security environment may be many years away.” While many agree that CSI, C-TPAT, OSC, and MDA, are sound strategiesn for addressing the threat, they contend that these programs represent only a framework for building a maritime security regime, and that significant gaps in security still remain. In the words of one security expert,
Right now, none of these initiatives has changed the intermodal transportation environment sufficiently to fundamentally reduce the vulnerability of the cargo container as a means of terrorism. However, all are important stepping-off points nfor building an effective risk management approach to container security — a foundation that simply did not exist prior to September 11, 2001.
In its oversight role, Congress is examining the effectiveness of these programs in addressing the terrorist threat, whether they are proceeding at sufficient pace, and whether enough resources are being provided to implement these and other security Initiatives.
Some observers and Members of Congress are concerned that initiatives to fill gaps in port security are not proceeding at a sufficient pace. TSA’s program to credential all transportation workers and its effort to develop a “smart-box” to ensure the integrity of container shipments has also been criticized for moving forward too slowly. Some argue that the security funding provided to seaports, especially when compared to the amount provided to airports, is woefully inadequate.
Others argue that current efforts to improve port security are proceeding at an unprecedented pace. They note that the IMO, with leadership from the U.S. Coast Guard, agreed to new international port security measures within a year. They also note that the Coast Guard issued final rules implementing MTSA within a year after becoming law. During Operation Liberty Shield, (March 17, 2003 through April 16, 2003) the Coast Guard and CBP demonstrated their ability to rapidly intensify port security operations by increasing ship and cargo inspections, increasing air and surface patrols, escorting more ships through harbors, and other activities.

Funding Port Security
According to many, the unresolved debate over how to pay for port security is stalling efforts to improve port security. The debate is over whether port security should be paid for with federal revenues, by state and local governments, by the maritime industry, or by a cost sharing arrangement among all of the above. The
Coast Guard roughly estimates the cost of implementing the new IMO security code and the security provisions in MTSA to be approximately $1.5 billion for the first year and $7.3 billion over the succeeding decade.48 Congress has provided over $650 million through FY2005 in direct federal grants to ports to improve their physical and operational security. This is in addition to the budgets of the Coast Guard, Bureau of Customs and Border Protection, TSA, and other federal agencies involved in port security.49 Advocates for more spending argue that the federal funds provided to port authorities thus far are woefully inadequate, particularly when compared to airports.
Skeptics of additional spending argue that taxpayers should not provide funds to large and profitable corporations to secure infrastructure that is in their own financial interest to do so.

Sources of Funds.
A dispute over how to finance security requirements arose during the conference committee on MTSA. Senator Hollings proposed creating a system of user fees on ship cargo as a means of generating funds for port security upgrades required in the legislation. Other conferees opposed this proposal, calling the user fees a tax. Some policymakers contend that without providing a funding source, the act amounts to an unfunded mandate.
Port authorities, ocean carriers, and shippers argue that port security is a national concern and therefore the federal government should finance it through general revenues. Others argue that the maritime industry should finance port security through user fees because it is a direct beneficiary of improved security as it reduces cargo theft and other economic damages.
Proponents of user fees contend that user surcharges are an effective means of ensuring improved security because they would provide a more secure and predictable source of funding than annual appropriations. They propose that a port security trust fund be created in a manner that prevents the user fees from being spent on anything other than port security. If such a port security trust fund were created, they argue, port security would not have to compete with other funding priorities in the annual appropriations process. Some economists contend that a user fee system is also more efficient than direct subsidies because the users of the service being provided (in this case port security) are likely to demand that policymakers spend the funds in the most productive manner.

 

Allocating Resources.
An issue of likely interest to Congress is how to allocate resources appropriately to the various ports. Maximum security is prohibitively expensive. Therefore, it is important to properly identify specific security areas that have the greatest vulnerability and apportion funds accordingly.
Criteria could include a port’s relative economic importance and its proximity to an urban or sensitive area. The 9/11 Commission criticized the TSA for lacking a strategic plan for systematically analyzing transportation assets, risks, costs, and benefits in order to allocate limited resources in the most cost-effective way. The
Inspector General of the DHS was critical of port security grant award decisions made thus far and made recommendations for improving them.

 

Resources for Foreign Ports.
In addition to funding security at U.S. ports, there is also the issue of finding resources for improving security at foreign ports, especially in developing countries that may not be able to afford the technology to improve their ports’ security. The IMO’s recent adoption of new security measures includes a statement inviting the Secretary General of the IMO to give early consideration to establishing a “Maritime Security Trust Fund” for the purpose of providing financial support in developing countries for strengthening their maritime security infrastructure.53

 

Balancing Security and Commerce
Security experts argue that perfect maritime security can only be achieved by shutting down the transportation system. As one observer stated, “a harbor without ships is safe, but that is not what harbors are built for.”54 The issue for Congress is how to increase port security to desired levels while minimizing the economic impacts associated with impeding the maritime trade system. When security experts speak of significant gaps still remaining in maritime security, they are often referring to the credibility problems associated with the container loading and screening process overseas and the true identity of ships and their crew on the high seas.

 

Point of Origin Cargo Security.
A major area of concern is ensuring the integrity of cargo as it begins its transit to the United States from its overseas origin.
Point of origin security is necessary because inspecting cargo on the high seas is practically impossible and inspecting cargo upon its arrival at a U.S. port could be too late to prevent a terrorist event. Ensuring that the container was not stuffed with illegitimate cargo at the overseas factory that the loaded container was not tampered with while trucked to the port of loading, and ensuring that the cargo information reported to CBP is not fraudulent are all critical challenges in supply chain security.
Congress is examining the effectiveness of C-TPAT, CSI, and OSC in ensuring the integrity of U.S. bound cargo at its overseas point of origin. Issues include what type of procedures are necessary to verify the legitimacy of cargo loaded into a container, what type of “smart box” devices should be required to ensure the physical integrity of the container while en route, and what specific information should cargo manifests contain to enable CBP to target shipments for closer inspection. The GAO investigated how the CSI and C-TPAT programs were being implemented and found several shortcomings that need correction.55 The GAO found that C-TPAT participants were benefitting from reduced scrutiny of their imported cargo after they had been certified into the program but before CBP had validated that the participants were indeed carrying out the promised security measures. The GAO also found that not all containers that CBP had targeted for inspection at the overseas loading port were being inspected by the host customs administration. The GAO found other flaws in these two programs and CBP has taken corrective action to address some of these flaws.

 

Vessels under Foreign Ownership and Control.
There is no single sovereign power that regulates international shipping. MTSA requires the Coast
Guard to report on foreign-flag vessels calling at U.S. ports, specifically those vessels with murky ownership histories, and to report on actions taken to improve the transparency of vessel registration procedures (section 112). In December 2002, as mentioned above, the IMO adopted more stringent international standards for the security of vessels and ports.

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