U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

76–511 PDF 2013

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 

Available via the World Wide Web: http://www.gpo.gov/fdsys/ 
(II) 

COMMITTEE ON HOMELAND SECURITY 

PETER T. KING, New York, Chairman 

LAMAR SMITH, Texas 

DANIEL E. LUNGREN, California 

MIKE ROGERS, Alabama 

MICHAEL T. MCCAUL, Texas 

GUS M. BILIRAKIS, Florida 

PAUL C. BROUN, Georgia 

CANDICE S. MILLER, Michigan 

TIM WALBERG, Michigan 

CHIP CRAVAACK, Minnesota 

JOE WALSH, Illinois 

PATRICK MEEHAN, Pennsylvania 

BEN QUAYLE, Arizona 

SCOTT RIGELL, Virginia 

BILLY LONG, Missouri 

JEFF DUNCAN, South Carolina 

TOM MARINO, Pennsylvania 

BLAKE FARENTHOLD, Texas 

ROBERT L. TURNER, New York 

BENNIE G. THOMPSON, Mississippi 

LORETTA SANCHEZ, California 

SHEILA JACKSON LEE, Texas 

HENRY CUELLAR, Texas 

YVETTE D. CLARKE, New York 

LAURA RICHARDSON, California 

DANNY K. DAVIS, Illinois 

BRIAN HIGGINS, New York 

JACKIE SPEIER, California 

CEDRIC L. RICHMOND, Louisiana 

HANSEN CLARKE, Michigan 

WILLIAM R. KEATING, Massachusetts 

KATHLEEN C. HOCHUL, New York 

JANICE HAHN, California 

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 

MICHAEL T. MCCAUL, Texas 

PAUL C. BROUN, Georgia 

BEN QUAYLE, Arizona, Vice Chair 

SCOTT RIGELL, Virginia 

JEFF DUNCAN, South Carolina 

PETER T. KING, New York (Ex Officio) 

HENRY CUELLAR, Texas 

LORETTA SANCHEZ, California 

SHEILA JACKSON LEE, Texas 

BRIAN HIGGINS, New York 

HANSEN CLARKE, Michigan 

BENNIE G. THOMPSON, Mississippi (Ex Officio) 

PAUL ANSTINE, Staff Director 

DIANA BERGWIN, Subcommittee Clerk 

ALISON NORTHROP, Minority Subcommittee Director 
(III) 

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 

(1) 

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. 
2 

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? 
3 

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. 
4 

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 de-
5 

tails 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. 
6 

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 
7 

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. 
8 

• 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. 
9 

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. 
10 

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. 
11 

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, antismuggling, 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. 
12 

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. 
13 

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 
14 

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 Eyjafjallajo ̋kull 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 
15 

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 crossdesignated 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. 
16 

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 privatepublic 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 
17 

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 
18 

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 capacitybuilding 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 
19 

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 
20 

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 publicprivate 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 re-
21 

verted 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 
22 

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, 
23 

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. 
24 

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 mi-
25 

grant 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. 
26 

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 testi-
27 

mony 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 
28 

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. 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. 4Pub. L. No. 107–295, 116 Stat. 2064. 

5See 46 U.S.C. § 70116. 6Pub. L. No. 109–347, 120 Stat. 1884. 

7The 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). 

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). 9Pub. 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. 11The 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, 

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

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

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. 

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 
29 

or (3) use of the equipment will significantly impact trade capacity and the flow of cargo. See 

6 U.S.C. § 982(b)(4). 12DHS, Strategy to Enhance International Supply Chain Security (Washington, DC: July 

2007). 13The White House, National Strategy for Global Supply Chain Security (Washington, DC: 

Jan. 23, 2012). 14See the list of GAO’s related products included at the end of this statement. 15The National Targeting Center—Cargo is responsible for targeting high-risk shipments for 

inspection. 16See 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). 19The WCO is an independent international organization whose mission is to enhance the efficiency and effectiveness of customs administrations. 

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. 

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. 

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 state-
30 

20For 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). 21GAO, 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). 22We are conducting this work for the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, House of Representatives. 

ment. (Figure 1 illustrates where CBP’s container security programs intersect with 

the key points of transfer in the global supply chain.) 

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
31 

23Two 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. 24See 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). 25GAO, 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). 26Laboratory 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. 27 GAO–10–887. 28The 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. 

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. 

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 iden-
32 

29GAO, 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). 30GAO, Combating Nuclear Smuggling: Lessons Learned from DHS Testing of Advanced Radiation Detection Portal Monitors, GAO–09–804T (Washington, DC: June 25, 2009). 31GAO, Homeland Security: DHS Could Strengthen Acquisition and Development of New 

Technologies, GAO–11–829T (Washington, DC: July 15, 2011). 32We 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. 33GAO, 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). 

tified 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. 

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. 

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

Since 2005, DNDO was also engaged in trying to develop a more advanced nonintrusive 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 
33 

34For 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). 35GAO, 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). 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. 38GAO, 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). 39GAO, 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). 

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. 

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. 

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 program36—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

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 
34 

40For more information on the WCO Authorized Economic Operator Program, see World Customs Organization, Compendium of Authorized Economic Operator Programme, 2011 edition. 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/ 

cargolsecurity/ctpat/mr/. 42The 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). 43GAO–10–12. 

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

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

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. 

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 
35 

44For 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. 45GAO–11–140R. 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. 

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 riskbased 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. 

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. 

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.’’ 
36 

47The 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). 

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

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 Sec-
37 

retary 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. 
38 

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. 
39 

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. 
40 

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. 
41 

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. 
42 

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—— 
43 

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? 
44 

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. 
45 

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 
46 

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. 
47 

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. 
48 

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 
49 

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. 
50 

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. 
51 

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. 
52 

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 
53 

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. 
54 

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. 
55 

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? 
56 

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-aday 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. 
57 

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. 
58 

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 
59 

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.] 

(61) 

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 riskbased 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, riskbased 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. 
62 

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? 
63 

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. 
64 

Question 3. Please explain how you came up with this figure and provide any doc- umentation 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 
65 

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. 
66 

1 [sic] 

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 sideby-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 thirdparty 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. MILLER1

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? 
67 

2GAO, 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). 3The 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. 4GAO, 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). 

On the basis of work we performed as part of our last review of the CustomsTrade 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. 

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 
68 

6Pub. L. No. 109–347, 120 Stat. 1884 (2006). 

7GAO, 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). 8GAO, 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). 

other companies to join C–TPAT if the 100 percent scanning requirement were fully 

implemented. 

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 revalidation 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. 

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. 

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 reciprocitybased 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 
69 

9We 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. 10GAO, Combating Nuclear Smuggling: Lessons Learned from DHS Testing of Advanced Radiation Detection Portal Monitors, GAO–09–804T (Washington, DC: June 25, 2009). 11GAO, 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). 

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. 

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

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. 

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 
70 

12GAO, Transportation Worker Identification Credential: Internal Control Weaknesses Need to 

Be Corrected to Help Achieve Security Objectives, GAO–11–657 (Washington, DC: May 10, 2011). 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. 

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. 

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 MTSAregulated 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 MTSAregulated 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. 

Æ