Testimony

Before the Subcommittee on National Security,

Veterans Affairs, and International Relations, House

Committee on Government Reform

United States General Accounting Office

GAO

For Release on Delivery

Expected at 11:00 a.m. EST

in New York, New York,

Monday, November 18, 2002

CONTAINER SECURITY

Current Efforts to Detect

Nuclear Materials, New

Initiatives, and Challenges

Statement of JayEtta Z. Hecker

Director, Physical Infrastructure Issues

GAO-03-297T
U.S. ports have programs in place to detect illegal fissile material or

nuclear weapons, but these programs are limited in several respects.

They focus on screening a small portion of total cargo as it enters the

country, and they are carried out without the use of adequate detection

aids, such as equipment that can scan entire containers for radiation.

Efforts to target cargo for screening are hampered by the quality of

information regarding which cargo poses the greatest risk.

New initiatives are under way to supplement these programs. The

predominant focus of these initiatives has been to establish additional

lines of security in the supply chain of international commerce. In

essence, this means moving part of the security effort overseas, where

goods are prepared for shipment into this country. These initiatives

include such efforts as establishing international standards for ports,

carriers, and maritime workers; stationing Customs personnel overseas;

reducing security vulnerabilities all the way back to points of

manufacture; and using new technology to monitor the contents and

movement of containers from their point of origin.

The nation faces three key challenges to implementing efforts to improve

the security of ports and containers: creating and enforcing a set of

security standards, ensuring the cooperation of diverse groups with

competing interests when it comes to the specifics of how things are to

be done, and paying the increased security bill. Such challenges exist

both for strengthening domestic efforts and for developing new

initiatives that expand security on an international basis. GAO is

currently reviewing several aspects of port and container security, and

will report as those efforts are completed.

Overview of Supply Chain for Cargo Containers

Key parties involved:

Exporter

Freight consolidator

Inland carrier (truck/rail)

Terminal operator

Freight forwarder

Export side

Containerized goods 

ready for shipment Shipment aboard ocean carrier Delivery at receiving port

Key parties involved:

Customs broker

Customs inspection

Terminal operator

Inland carrier (truck/rail)

Importer

Import side

Source: GAO, (c) Nova Development Corporation and Corbis Images (DigitalStock).

CONTAINER SECURITY

Current Efforts to Detect Nuclear

Materials, New Initiatives, and Challenges

www.gao.gov/cgi-bin/getrpt?GAO-03-297T.

To view the full report, including the scope

and methodology, click on the link above.

For more information, contact JayEtta Hecker

at (202) 512-2834 or heckerj@gao.gov.

Highlights of GAO-03-297T, a testimony

before the Subcommittee on National

Security, Veterans Affairs, and

International Relations, House Committee

on Government Reform

November 2002

After the attacks of September

11th, 2001, concerns intensified

over the vulnerability of U.S. ports

to acts of terrorism. One particular

concern involves the possibility

that terrorists would attempt to

smuggle illegal fissile material or a

tactical nuclear weapon into the

country through a cargo container

shipped from overseas. This

testimony discusses the programs

already in place to counter such

attempts, new initiatives now

under way to enhance the nation’s

security against such attempts, and

the key challenges faced in

implementing these various efforts.
Page 1 GAO-03-297T

Mr. Chairman and Members of the Subcommittee:

I appreciate the opportunity to be here in New York City to discuss our

work on efforts to address security risks related to U.S. ports. These risks

are clearly serious ones that pose national security concerns. We have

issued several reports and testimony statements related to nuclear

smuggling and port security in general.

My testimony focuses on (1) the programs in place to prevent illegal fissile

material or a tactical nuclear weapon from being smuggled into the United

States through our ports; (2) new efforts under way to counter such

smuggling, both domestically and abroad; and (3) the key challenges faced

in implementing these various efforts. We have excluded information on

these topics that has been deemed law-enforcement sensitive by the U.S.

Customs Service (Customs), which precludes us from discussing it in an

open hearing such as this. My remarks are based on completed GAO work

on Customs efforts to detect hazardous materials at U.S. ports and federal

efforts to secure U.S. seaports, as well as challenges involved in

implementing these initiatives.1

 We are also presenting information based

on ongoing work regarding new initiatives that address overseas supply

chain security. See the appendix for a more detailed explanation of our

scope and methodology.

In summary:

• The programs already in place at U.S. ports for detecting illegal fissile

material or nuclear weapons are limited in a number of respects. They

focus on screening a small portion of total cargo as it enters U.S. ports,

and they are carried out without the use of adequate detection aids, such

as radiation-detection equipment that can scan the entire contents of cargo

containers. Instead, Customs personnel rely on small, handheld radiation

pagers that have a limited range and capability. Other screening programs

designed more broadly to identify any illegal or hazardous cargoes could

potentially help identify such nuclear material as well, but these programs

 1

Previous GAO reports and testimony statements on these issues include Nuclear

Proliferation: U.S. Efforts to Combat Nuclear Smuggling Need Strengthened

Coordination and Planning, GAO-02-426 (Washington, D.C.: May 16, 2002); Nuclear

Proliferation: U.S. Efforts to Combat Nuclear Smuggling, GAO-02-989T (Washington,

D.C.: July 30, 2002); Port Security: Nation Faces Formidable Challenges in Making New

Initiatives Successful, GAO-02-993T (Tampa, FL: August 5, 2002); and Customs Service:

Acquisition and Deployment of Radiation Detection Equipment, GAO-03-235T

(Washington, D.C.: October 17, 2002).
Page 2 GAO-03-297T

rely heavily on the availability of quality information for targeting those

cargoes posing the greatest risk. The Customs Service acknowledges that

the accuracy of such information still needs improvement.

• The predominant focus of most new initiatives has been to establish

additional lines of security in the supply chain of international commerce.

In essence, this means moving part of the effort overseas, where goods are

prepared for shipment into this country. These initiatives include such

efforts as establishing international standards for ports, carriers, and

maritime workers; stationing Customs personnel overseas to identify highrisk containers before inspection in foreign ports; reducing security

vulnerabilities along the overseas portion of the supply chain; and using

new technology to monitor the contents and movement of containers from

their points of origin. Because the United States functions in a global

economy where international organizations are addressing similar issues,

current U.S.-led efforts are evolving within that context.

• The United States faces considerable challenges to successfully implement

these existing and new efforts, both at home and abroad. Our reviews of

port security programs have shown that even on the domestic front, the

federal government faces challenges in creating and enforcing a set of

security standards, ensuring the cooperation of diverse groups with

competing interests when it comes to the specifics of how things are to be

done, and paying the increased security bill. Our preliminary work

indicates that these same challenges are likely to exist in efforts to extend

strong measures of security elsewhere. To make its programs work, the

United States is participating in and seeking to achieve consensus through

a variety of international organizations, across many countries.

Seaports are critical gateways for the movement of international

commerce. More than 95 percent of our non–North American foreign trade

arrives by ship. In 2001, approximately 5,400 ships carrying multinational

crews and cargoes from around the globe made more than 60,000 U.S. port

calls. More than 6 million containers (suitable for truck-trailers) enter the

country annually. Particularly with “just-in-time” deliveries of goods, the

expeditious flow of commerce through these ports is so essential that the

Coast Guard Commandant stated after September 11th, “even slowing the

Background
Page 3 GAO-03-297T

flow long enough to inspect either all or a statistically significant random

selection of imports would be economically intolerable.”

2

As indispensable as the rapid flow of commerce is, the terrorist attacks of

September 11th have served to heighten awareness about the supply

system’s vulnerability to terrorist actions. Drugs and illegal aliens are

routinely smuggled into this country, not only in small boats but also

hidden among otherwise legitimate cargoes on large commercial ships.

These same pathways are available for exploitation by a terrorist

organization or any nation or person wishing to attack us surreptitiously.

The Brookings Institution reported in 2002 that a weapon of mass

destruction shipped by container or mail could cause damage and

disruption costing the economy as much as $1 trillion.3

 Port vulnerabilities

stem from inadequate security measures as well as from the challenge of

monitoring the vast and rapidly increasing volume of cargo, persons, and

vessels passing through the ports. Against this backdrop, it is not

surprising that various assessments of national security have concluded

that the nation’s ports are far more vulnerable to terrorist attacks than the

nation’s aviation system, where most of the nation’s efforts and resources

have been placed since September 11th.4

Guarding against the introduction of nuclear or other dangerous cargo into

the United States involves having effective security measures at numerous

points along the supply chain. Transporting a shipping container from its

international point of origin to its final destination is a complex process

that involves many different participants and many points of transfer.

Many of these participants carry out their roles in the exporting country

(see fig. 1). The actual materials in a container can potentially be affected

not just by the manufacturer or supplier of the material being shipped, but

also by carriers who are responsible for getting the material to a port and

by personnel who load containers onto the ships. Others who interact with

the cargo or have access to the records of the goods being shipped include

exporters who make arrangements for shipping and loading, freight

 2

Admiral James M. Loy and Captain Robert G. Ross, U.S. Coast Guard, Global Trade:

America’s Achilles’ Heel (February 2002); and Meeting the Homeland Security Challenge:

A Principled Strategy for a Balanced and Practical Response (September 2001).

3

Michael E. O’Hanlon et al., Protecting the American Homeland: A Preliminary Analysis,

Washington, D.C.: Brookings Institution Press, 2002.

4

Independent Task Force Sponsored by the Council on Foreign Relations, America Still

Unprepared—America Still in Danger, October 2002.
Page 4 GAO-03-297T

consolidators who package disparate shipments into containers, and

forwarders who manage and process the information about what is being

loaded onto the ship. Review by the Customs Service, which traditionally

comes once the ship arrives at its destination, is likewise just one step in

the transportation chain on the domestic side.

Figure 1: Overview of Supply Chain for Cargo Containers

Detecting smuggled fissile material that could be used to make a nuclear

weapon is a difficult task not just because it is a potential needle in this

vast haystack of international trade. It is also difficult because one of the

materials that is of greatest concern—highly enriched uranium—has a

relatively low level of radioactivity and is therefore very difficult to find

with radiation-detection equipment. By contrast, radioactive materials that

could be used in conjunction with conventional explosives to create a socalled dirty bomb are somewhat easier to detect, because they have much

higher levels of radioactivity. Because of the complexity of detecting

nuclear material, the Customs officers or border guards who are

Key parties involved:

Exporter

Freight consolidator

Inland carrier (truck/rail)

Terminal operator

Freight forwarder

Export side

Containerized goods 

ready for shipment Shipment aboard ocean carrier Delivery at receiving port

Key parties involved:

Customs broker

Customs inspection

Terminal operator

Inland carrier (truck/rail)

Importer

Import side

Source: GAO, © Nova Development Corporation and Corbis Images (DigitalStock).
Page 5 GAO-03-297T

responsible for operating the equipment must also be trained in using

handheld radiation detectors to pinpoint the source of an alarm,

identifying false alarms, and responding to cases of illicit nuclear

smuggling.

Existing programs for detecting the smuggling of nuclear materials are

spearheaded by the Customs Service and are directed mainly at the import

side of the transportation chain. Some of these efforts focus specifically on

detecting nuclear materials, while others are directed at the wider range of

hazardous and illegal shipments. In addition, several other federal

agencies have efforts under way that are directed at the export side of the

transportation chain—that is, at detecting and stopping shipments of

nuclear materials before they leave the country of origin. We and others

have pointed out that these programs lack many components, such as the

best detection technology, for providing a more effective deterrent.

The Customs Service currently has some equipment in place for detecting

radioactive or nuclear materials in the nation’s ports and has begun

training its agents to recognize and respond to radioactive materials.

However, this equipment has limited effectiveness, and the agency’s

training programs, among other things, have not been integrated into a

comprehensive plan.5

Customs’ current screening program is based on several types of radiationscreening technology, only some of which are up and running:

• Radiation-detection pagers. Customs acquired radiation-detection

pagers, which are worn on a belt, have limited range, and were not

designed to detect weapons-usable radioactive material. Customs has

deployed about 4,200 pagers among its 7,500 inspectors and expects every

inspector to have a pager by September 2003. According to experts with

whom we have spoken, these pagers are more effectively used in

conjunction with other detection equipment rather than as a primary

means of detection.

 5

Customs Service: Acquisition and Deployment of Radiation Detection Equipment,

GAO-03-235T (Washington, D.C.: Oct. 17, 2002). We are continuing to conduct work on this

issue.

Existing Programs for

Countering Nuclear

Smuggling at

Domestic and

International Ports

Are Limited

Efforts Aimed Specifically

at Detecting Nuclear Cargo

Entering U.S. Ports
Page 6 GAO-03-297T

• X-ray–compatible detectors. These radiation detectors are installed on

X-ray machines that screen small packages. Customs has installed about

200 such detectors nationwide at border crossings and ports of entry.

These detectors are not large enough to screen entire containers or other

large cargo, however.

• Portal monitors. These detectors, which are not yet in place in ports or

other points of entry, are larger than those on X-ray machines and are

capable of screening the entire contents of containers, cars, or trucks.

Customs is now completing a pilot test of such a monitor at one border

crossing, and Customs officials told us that they plan to purchase up to 400

portal monitors by the end of fiscal year 2003.

According to Customs, about 5,000 of its approximately 7,500 inspectors

have been trained to identify materials and components associated with

the development and deployment of nuclear weapons. Customs also plans

to give specialized training in the detection of nuclear material to as many

as 140 of its inspectors, in cooperation with the Department of Energy’s

national laboratories. However, Customs has not yet developed an overall

plan that coordinates equipment purchases and personnel training. Such a

plan would also address such things as vulnerabilities and risks; identify

the complement of radiation-detection equipment that should be used at

each type of border entry point—air, rail, land, and sea—and determine

whether equipment could be immediately deployed; identify longer-term

radiation-detection needs; and develop measures to ensure that the

equipment is adequately maintained.

Customs has methods and machines that, although directed more broadly

at various types of hazardous or illegal cargoes, can be useful in finding

radioactive and nuclear materials. These efforts are based largely on an

approach of targeting a small percentage of containers for in-depth

screening. With more than 6 million containers a year entering U.S. ports,

examining them all has not been possible. Instead, Customs has

acknowledged that its approach relies on reviewing shipping manifests,

invoices and other commercial documents, and intelligence leads to target

approximately 2 percent of the containers that enter the country

nationwide for physical inspection, though the actual percentage varies

from port to port. To better address terrorist threats, Customs is modifying

its targeting approach, which was originally designed for counter-narcotics

efforts. Customs officials told us that one of their greatest needs was for

better information to more accurately target shipments. In a separate

effort, GAO is conducting a review of Customs’ processing of sea-borne

Efforts Focused More

Broadly on Detecting All

Hazardous Cargoes in U.S.

Ports
Page 7 GAO-03-297T

containerized, bulk, and break-bulk cargo bound for the United States,6

focusing on targeting criteria, procedures, and the use of screening

technology. On the basis of our preliminary work, GAO has identified a

number of challenges related to the implementation and effectiveness of

Customs’ initiatives to ensure the security of cargo entering U.S. seaports.

Customs has deemed the information we are collecting about that work as

law-enforcement sensitive, which precludes our discussing it in an open

hearing such as this.

To inspect the containers they target for closer scrutiny, Customs

inspectors use gamma ray and X-ray machines that are capable of

scanning the interior of a 40-foot container in less than a minute. The Port

of Newark has four such machines, called VACIS machines.7

 Starting in the

summer of 2002, Customs began deploying an additional 20 mobile gamma

ray imaging devices at U.S. ports to help inspectors examine the contents

of cargo containers and vehicles.8

 If necessary, containers can also be

opened and unloaded for a lengthy, more thorough item-by-item

inspection.

Aside from Customs’ efforts, the Coast Guard and other agencies are

undertaking a number of other fundamental actions domestically to

improve our line of defense. For example:

• The Coast Guard has its own screening process for identifying and

boarding vessels of special interest or concern. Shortly after the

September 11th terrorist attacks, the Coast Guard modified its ship arrival

notification requirement. The modification requires all vessels over 300

gross tons to contact the Coast Guard 96 hours—up from 24 hours—

before they are scheduled to arrive at a U.S. port. Each vessel must

provide information on its destination, its scheduled arrival, the cargo it is

carrying, and a roster of its crew members. The information, which is

 6

Bulk and break-bulk cargoes include liquid bulk (such as petroleum), dry bulk (such as

grain), and iron ore or steel.

7

VACIS is a gamma ray imaging system that uses radiographic images to help inspectors

examine the contents of trucks, containers, cargo, and passenger vehicles for hidden

contraband. Gamma ray systems are regarded as state-of-the-art for such applications.

8

Major ports are scheduled to receive additional VACIS systems, Mobile Truck Gamma

Systems, Mobile Truck X-ray systems, High Energy Sea Container X-ray systems, and Pallet

Inspections Systems. Additional deployments of equipment are planned over the next

several years.

Efforts in Nation’s Ports

Remain a Key Line of

Defense
Page 8 GAO-03-297T

processed and reviewed by the Coast Guard’s National Vessel Movement

Center, is used in conjunction with data from various intelligence agencies

to identify “high-interest” vessels. Decisions on appropriate actions to be

taken with respect to such vessels, such as whether to board, escort, or

deny entry to them, are made based on established criteria and

procedures.

• Coast Guard officials are continuing to conduct vulnerability assessments

of the nation’s ports. These assessments help identify where local ports

are most susceptible to security weaknesses and provide a blueprint of

actions that need to be taken to make the ports more secure.

• Individual ports are taking a number of actions, often using newly

provided federal funding to help pay for them. Three Department of

Transportation (DOT) agencies—the Maritime Administration, the Coast

Guard, and the Transportation Security Administration (TSA)—recently

awarded grants to 51 U.S. ports for security enhancements and

assessments. For example, in 2002, the Port Authority of New York and

New Jersey received $3.5 million for such activities as developing devices

for scanning containerized cargo for radioactivity, conducting

preparedness training, and installing camera surveillance systems.9

But actions such as these and the systems now in place at local ports to

effectively identify, intercept, examine, and deal with ships and cargoes

that arouse suspicion, or otherwise do not meet established standards,

remain a work in progress. The recent incidents at the Port of New York

and New Jersey involving the Palermo Senator and the Mayview Maersk

illustrate that basic questions remain about how actions should be carried

out at domestic ports. In both cases, the Coast Guard had concerns about

the vessels but allowed them to enter the port. In the case of the Palermo

Senator, the ship remained at the dock for 18 hours after testing showed

high levels of radioactivity.10 For the Mayview Maersk, the ship remained

at the dock for 6 hours while the Coast Guard checked for explosives.11

 9

More recently, Congress passed legislation authorizing an additional $125 million for port

security grants, including $20 million for port incident training and exercises. According to

a Maritime Administration official, the grant application process has not begun, but he

expects that grant awards will be made in the April 2003 time frame.

10The ship was subsequently towed to a security zone 6 miles offshore, where inspectors

found that the radiation was natural radiation emanating from the ceramic cargo.

11The inspection showed that containers had previously held explosive cargo, but no

explosives were found aboard the ship.
Page 9 GAO-03-297T

These incidents illustrate the need for clearer definitions of responsibility

and procedure. Port Authority of New York and New Jersey officials, for

example, cited a need for clearer guidance on the conditions under which

ships can be denied entry into U.S. ports and the protocols for where and

how to examine and unload ships suspected of carrying explosives or

weapons of mass destruction.

Finally, turning to efforts outside U.S. borders, our ongoing work indicates

that U.S. agencies have taken steps to address nuclear smuggling by

attempting to ensure that nuclear materials do not leave some other

countries, especially the former Soviet Union. Under its Second Line of

Defense program, the U.S. Department of Energy (DOE) has installed 70

portal monitors at 8 border crossings in Russia since fiscal year 1997.

These 8 crossings are the first of about 60 sites in Russia where DOE plans

to install such portal monitors. According to DOE officials, the monitors

provided to Russia have resulted in more than 275 cases involving

radioactive material, including contaminated scrap metal, irradiated cargo,

and other materials. The State Department and Department of Defense

(DOD) have also provided detection equipment and other assistance

primarily to former Soviet countries.

In our July 2002 report, we noted a lack of effective coordination among

the overseas assistance programs.12 That is, DOE, DOD, and the State

Department have pursued separate approaches to installing radiation

detection at border crossings, leaving some crossings more vulnerable

than others to nuclear smuggling. Moreover, according to agency officials,

U.S. assistance has sometimes lacked effective follow-up to ensure that

the equipment delivered was properly maintained and used. Some

equipment has sat idle for months or years for want of final agreements,

reliable power supplies, or appropriate placement. For example, some

equipment given to Estonia sat in an embassy garage for 7 months while

an agreement governing its release was finalized; portal monitors sat in the

U.S. embassy in Lithuania for 2 years because officials disagreed about

whether a new $12,600 power supply was needed to run them; and one

portal monitor delivered to Bulgaria was installed on an unused road. In

many cases, countries that have received U.S. radiation-detection

equipment were not systematically providing information to U.S. agencies

 12Nuclear Nonproliferation: U.S. Efforts to Combat Nuclear Smuggling, GAO-02-989T

(Washington, D.C.: July 30, 2002).

Efforts Aimed at

Intercepting Shipments

before They Leave the

Export Country
Page 10 GAO-03-297T

about the nuclear materials they detect, making it difficult to determine

the equipment’s impact and effectiveness. DOE and other agencies

providing the equipment have identified these and other problems and are

taking actions to address them.

In responding to the ongoing challenges of preventing radioactive and

nuclear materials from entering the United States, the federal government

has recognized that it must take a multi-pronged approach, including

changes on the domestic as well as the international front. Concentrating

on a small percentage of all containers, even with efforts to target highrisk cargoes, may not provide sufficient coverage. To widen coverage

without bringing international commerce to a virtual halt, federal agencies

are beginning to address those parts of the overseas supply chain that have

received relatively limited attention, including country of origin. The main

thrust of several new initiatives has been to create multiple lines of

defense by pushing security beyond U.S. docks to include points of

departure and, ultimately, places of manufacture. This is a fundamental

change that involves viewing cargo security as an international effort

rather than a national effort. Recognizing the important role that

international organizations play in setting standards and procedures to

facilitate international trade and enhance the security of the global supply

chain, the United States is participating in these forums to help achieve

these dual goals. To develop such international efforts, part of the federal

government’s effort must be on the diplomatic front as it seeks to forge

security-related agreements in international forums, such as the

International Maritime Organization (IMO). As the federal government is

engaged in this new approach, it is also attempting to improve the lines of

defense inside our nation’s ports. Although various efforts to do so are

under way, these efforts are in their preliminary stages. Currently, we are

conducting a separate review for the Senate Committee on Finance and

the House Committee on Ways and Means of Customs’ Container Security

Initiative (CSI) and Customs Trade Partnership Against Terrorism (CTPAT) programs, focusing on their efforts to address concerns about the

vulnerabilities of the international supply chain without impeding global

commerce. We have obtained data from Customs’ headquarters and have

begun foreign fieldwork.

New Efforts Are

Under Way to Address

the Entire Supply

Chain
Page 11 GAO-03-297T

The fundamental shift in the approach to cargo security means that a

program must be developed to put in place the additional checkpoints and

procedures needed in the supply chain. The Customs Commissioner has

emphasized the importance of such an effort in testing for the cargoes,

stating, “If a cargo container has been used to smuggle a weapon of mass

destruction set to go off upon arrival in the United States, it may be too

late to save American lives and the infrastructure of a great seaport.

Accordingly, we must change our focus and alter our practice to the new

reality.”

On this front, three primary initiatives are under way. Although all three

initiatives focus on activities that affect the overseas supply chain, they

differ somewhat in their focus and application.13

• The Container Security Initiative (CSI) focuses on placing U.S. Customs

inspectors at the ports of embarkation to target containers for inspection.

• The Customs Trade Partnership Against Terrorism (C-TPAT) focuses on

efforts by importers and others to enhance security procedures along their

supply chains.

• The Operation Safe Commerce (OSC) focuses more heavily on using new

technology, such as container seals, to help shippers ensure the integrity

of the cargo included in containers being sent to the United States.

The CSI program that was announced in January 2002 is a new initiative

intended to detect and deter terrorists from smuggling weapons of mass

destruction via containers on ocean-going vessels before they reach the

 13An additional effort, the outcome of which is classified as law-enforcement sensitive, is an

interagency Container Working Group established by the Secretary of Transportation to

address the security issues surrounding the movement of marine cargo containers through

the international and intermodal transportation system. This effort is co-chaired by the

Departments of Transportation and of the Treasury. According to DOT officials, the

Container Working Group’s activities are focused on information technology, security,

business practices, and international affairs. On February 1, 2002, the group made

recommendations to the Office of Homeland Security on ensuring the security of cargo

container transportation. The recommendations addressed improving the coordination of

government and business container security activities, enhancing cargo data collection,

and improving the physical security of containers. The recommendations also support

international container security efforts and the increased use of advanced technologies to

improve the profiling of containers. In August 2002, a status report was forwarded to the

Office of Homeland Security that detailed the progress on the twenty-four action items that

were recommended in the original report.

New Initiatives Focus on

Enhancing Security of

Overseas Supply Chain

CSI Places U.S. Customs

Personnel in Foreign Ports
Page 12 GAO-03-297T

United States. The United States is attempting to enter into bilateral

agreements with foreign governments to place U.S. Customs personnel at

key foreign seaports where, based on U.S. and foreign data, they will work

with their foreign counterparts to target and inspect high-risk containers

bound for the United States. By working at foreign ports with local

customs, this program is designed to facilitate the early detection and

examination of containers that are considered high-risk. Other key

elements of CSI include developing criteria intended to enable Customs

inspectors to better target high-risk containers suspected of transporting

weapons of mass destruction, using technology to quickly screen high-risk

containers at foreign ports, and developing and using smart and secure

containers.

Customs is currently working to put such agreements in place. Customs

has placed inspectors at 3 ports in Canada (Vancouver, Montreal, and

Halifax) and is now focusing on efforts to cover the 20 ports with the

highest volume of containers arriving into the United States. To date, eight

governments, representing 13 of the top 20 ports, have entered into CSI

agreements,14 and Customs has placed inspectors in the Netherlands.15

Agreements are currently under negotiation with six other governments,

representing the remaining 7 ports. Customs also plans to expand the

program to other ports deemed to be strategically important.

Another Customs initiative is the C-TPAT program, a partnership between

the business community and Customs designed to enhance the security of

international supply chains. Through this initiative, which began in April

2002, importing businesses, freight forwarders, carriers, and other logistics

providers enter into agreements with Customs to voluntarily undertake

measures that will reduce security vulnerabilities. Companies participating

in the program must complete a self-assessment of their supply chain and

submit to Customs a profile that describes their current security practices.

Customs then reviews these profiles, certifies applicants, and provides

them with feedback about security-related issues that need to be resolved.

 14These ports are: Rotterdam in the Netherlands; Antwerp in Belgium; Le Havre in France;

Bremerhaven and Hamburg in Germany; La Spezia and Genoa in Italy; Singapore; and Hong

Kong. Japan has sealed the declaration of principles to participate in CSI by stationing, on a

pilot basis, U.S. Customs officers at the ports of Tokyo, Nagoya, Kobe, and Yokohama. In

addition, the Customs Service announced on October 25, 2002, that China is joining CSI, in

principle.

15In December 2001, the Canadian Deputy Prime Minister and the U.S. Homeland Security

Director signed the “Smart Border Declaration.”

C-TPAT Seeks to Improve

Security Measures along the

International Supply Chain
Page 13 GAO-03-297T

Once they are certified, C-TPAT members must still address Customs

concerns on these issues. Customs plans to work jointly with companies

to track their progress in making security improvements along their supply

chains, but the emphasis is on self-policing rather than Customs

verifications. Overall, Customs views the C-TPAT program as an

incremental means to strengthen the international supply chain.

According to Customs, by participating in C-TPAT, certified importers and

their supply chain partners could benefit from a reduced likelihood that

Customs officials looking for weapons of mass destruction will delay the

movement of their containers for inspection. Furthermore, in the event of

an incident, C-TPAT members would likely be among the first allowed to

resume their import operations.

As of early November 2002, approximately 1,100 companies had agreed to

participate in C-TPAT, and Customs had certified 197 importers, 16

brokers, and 22 carriers. C-TPAT is currently open to all importers,

brokers, freight forwarders, and non-vessel–owning common carriers, as

well as most other types of carriers.16 Customs, in consultation with

private-sector partners, plans to expand the program to port authorities,

terminal operators, warehouse operators, and foreign manufacturers.

OSC was initiated by the private sector as an attempt to make the supply

chain more secure. OSC is administered by TSA within DOT and is funded

by $28 million appropriated by the Congress in July 2002. Like the two

Customs initiatives, OSC seeks to move the primary reliance away from

control systems at U.S. ports of entry and toward improved controls at

points of origin and along the way. OSC relies on using new technology

such as electronic container seals to strengthen the security of cargo as it

moves along the international supply chain. Efforts center on the

following:

• ensuring that containers are loaded in a secure environment at the point of

product origin, with 100 percent verification of their contents;

 16C-TPAT is open to carriers involved in air, rail, and sea transportation as well as to U.S.-

Canadian border highway carriers.

OSC Applies New Technology

to Provide Greater Assurance

That Cargoes Are Safe
Page 14 GAO-03-297T

• using such technology as pressure, light, or temperature sensors to

continually monitor containers throughout their overseas voyage to the

point of distribution in the United States; and

• using cargo-tracking technology to keep accurate track of containers at all

points in the supply chain, including distribution to their ultimate

destinations.

The nation’s three largest container port regions (Los Angeles/Long Beach,

New York/New Jersey, and Seattle/Tacoma) are involved in the OSC pilot

project, which will address the security vulnerabilities posed by containers

entering these U.S. port regions. According to the port officials, they are

working together with federal agencies to determine which procedures

and technologies constitute the best practices in supply chain security.

According to TSA, the OSC final grant award criteria will be contained in

the Request for Applications, which is expected to be released in

December 2002.17

According to the Associate Deputy Secretary of DOT, who serves as the

principal policy adviser to the Secretary of Transportation as well as cochair of the Operation Safe Commerce Executive Steering Committee,

meaningful improvement in global transportation security will involve

actions of many international organizations and governments. The

Administration, including various federal agencies, is working with

regional and global leaders and international organizations to further this

critically important transportation security agenda. Key initiatives are

being pursued in the International Maritime Organization, the World

Customs Organization, the International Organization for Standardization,

the International Labor Organization, and the United Nations SubCommittee of Experts on the Transportation of Dangerous Goods.

To encourage the broadest possible international consensus regarding the

importance of enhancing transportation security on a global basis, the

 17Separately from the OSC effort, the world’s three largest seaport operators, representing

70 percent of the world’s container traffic, are collaborating to demonstrate and deploy

automated tracking detection and security technology for containers entering U.S. ports.

Driven and initially funded by industry, this initiative, called Smart and Secure Tradelanes,

is focused on container security and tracking and will be built on existing infrastructure

and technologies that are proven, available for immediate deployment, and adaptable to

emerging new technologies.

International Approach

Requires ConsensusBuilding Efforts

Seeking Consensus with

Regional and Global Leaders
Page 15 GAO-03-297T

Administration has promoted a transport security agenda both at the most

recent G8 Summit in Canada (June 2002)18 and the recent meeting of Asia

Pacific Economic Cooperation leaders in Los Cabos, Mexico (October

2002). DOT officials report that in both forums, participants endorsed the

importance of adopting aggressive measures to combat the terrorist threat

to transportation on a global basis—notably, through the work of

international organizations—and to accelerate, where possible, the

deadlines for implementation of important new requirements.

The International Maritime Organization is responsible for improving

maritime safety, including combating acts of violence or crime at sea. The

Coast Guard and DOT spearhead U.S. involvement in the IMO. Ninetyeight percent of the world’s international shipping fleet operates under the

agreements it promulgates. Following the September 11th attacks, IMO

started determining new regulations needed to enhance ship and port

security and to prevent shipping from becoming a target of international

terrorism. Consideration of these new regulations is expected at a

diplomatic conference scheduled for December of this year. According to

Coast Guard officials, the new regulations will contain mandatory

requirements for ships engaged in international voyages and for port

facilities that serve such ships. The structure of the measures includes a

family of plans. Port facilities and ships will assess their vulnerabilities and

then develop security plans to address those vulnerabilities at specified

threat levels. Port facilities and ships will also assign personnel as security

officers to ensure development and implementation of these security

plans.

According to a Coast Guard official participating in the IMO negotiations,

IMO’s work is central to much of the international strategy propounded by

the administration and the Congress. For example, the Port and Maritime

Security Act of 2001,19 which is being finalized in conference committee

action, calls for the Secretary of Transportation to assess the acceptability

of foreign port security “based on the standards for port security and

 18The G8 includes representatives from the governments of Canada, France, Germany, Italy,

Japan, Russia, the United Kingdom, the United States, and the European Union.

19S. 1214, a bill introduced by Senator Ernest F. Hollings, was aimed at amending the

Merchant Marine Act of 1936 to establish a program to ensure greater security for U.S.

seaports; it passed in the Senate on December 20, 2001. The House version of S. 1214, the

Maritime Antiterrorism Act of 2002, does not contain a similar requirement.

Forming New Security

Consensus through the

International Maritime

Organization
Page 16 GAO-03-297T

recommended practices of the IMO and other appropriate international

organizations.”

The World Customs Organization (WCO) is an independent

intergovernmental body whose mission is to enhance the effectiveness and

efficiency of customs administrations. Among other things, WCO

establishes and maintains international instruments to make customs

procedures more uniform. In September 2002, WCO organized a task force

that is expected to be the first step in developing new guidelines for supply

chain security. The task force, which plans to complete its work by June

2003, will examine numerous security-related topics, including

enhancement of import, export, and in-transit controls; improvement of

technology; and development of better data and techniques for selecting

which cargoes to inspect. The Customs Service is a participant on this task

force.

Although much of the framework for port security is established by these

first two agencies, the International Organization for Standardization (ISO)

is another important international body involved in improving

international supply-chain security. ISO, a worldwide nongovernmental

federation of national standards bodies from more than 140 countries,

attempts to standardize various activities and products with a view toward

facilitating the international exchange of goods and services. In this role,

ISO would be responsible for developing standards for devices such as

electronic container seals. ISO is currently participating in a pilot project

dealing with these electronic seals.

The International Labor Organization (ILO), a United Nations agency, is

the agency that determines the requirements to be included in

identification documents for seafarers. Still another aspect of the

expanded security system involves checking on the background of crew

members aboard ships transporting cargo destined for the United States.

ILO and IMO have been working on the issue of seafarer documents since

February 2002. Also, ILO may consider standards for port worker

identification documentation.

A senior DOT official reports that based on the G8 consensus of June 2002,

the United Nations Sub-Committee of Experts on the Transport of

Dangerous Goods (U.N. Sub-Committee) considered steps it could take to

enhance security through international regulations on the transport of

dangerous goods (hazardous materials). At its July 2002 meeting, the U.N.

Sub-Committee agreed to consider specific measures for inclusion in the

United Nations Recommendations on the Transport of Dangerous Goods

Establishing Stronger Customs

Procedures through the World

Customs Organization

Developing New SecurityRelated Standards through the

International Organization for

Standardization

International Labor

Organization Sets

Requirements for Persons

Working Aboard Ships

U.N. Sub-Committee of Experts

on Transportation of

Dangerous Materials
Page 17 GAO-03-297T

at its meeting in early December 2002. In preparation for the December

meeting, the DOT Research and Special Programs Administration, which

leads the U.S. delegation to the U.N. Sub-Committee, worked

collaboratively with other governments to gain consensus on security

requirements that could be accepted at the December meeting. These

proposed amendments have now been formally proposed to the U.N. SubCommittee through a United Kingdom submission.

The proposed amendments call for hazardous-materials employees to be

trained in security at a level commensurate with their responsibilities, and

it requires shippers and carriers of high-hazard materials to assess their

security vulnerabilities and develop a security plan to address

vulnerabilities identified. These requirements mirror those proposed by

the Research and Special Programs Administration for inclusion in U.S.

DOT Hazardous Materials Transportation Regulations, which are expected

to be finalized later this year.

In our August 2002 testimony on security actions being taken to improve

security within domestic ports, we found indications that there could be

considerable challenges.20 These include implementation of standards

defining what safeguards should be in place and how they should operate,

difficulties in establishing effective coordination among the many entities

that have a stake in port security, and availability of sufficient funding to

carry out the full range of actions that may be needed. The attempts to

improve existing nuclear-detection programs and to implement the new

initiatives now under way could face challenges domestically and

internationally in these three areas as well. The United States is working

through a variety of international organizations, each with a certain set of

responsibilities, to establish consensus and to encourage compliance on

security issues.

Adequate standards, consistently applied, are important because lax

security at even a handful of ports could make them attractive targets for

terrorists interested in smuggling dangerous cargo, damaging port

infrastructure, or otherwise disrupting the flow of goods. On the domestic

front, development of a set of national standards that would apply to all

 20Port Security: Nation Faces Formidable Challenges in Making New Initiatives

Successful, GAO-02-993T (Washington, D.C.: Aug. 5, 2002)

Key Challenges

Include Creating and

Implementing

Standards, Ensuring

Cooperation of

Diverse Groups, and

Securing Resources

Implementing Security

Standards Could Prove

Difficult
Page 18 GAO-03-297T

ports and all public and private facilities is well under way. The Coast

Guard, through a contractor, has been developing a set of standards since

May 2002 as part of its efforts to conduct vulnerability assessments at 55

major U.S. ports. The standards will cover such things as preventing

unauthorized persons from accessing sensitive areas, detecting and

intercepting intrusions, checking backgrounds of those whose jobs require

access to port facilities, and screening travelers and other visitors to port

facilities. In the past, the level of security has largely been a local issue,

and practices have varied greatly. The standards are to be performancebased, meaning that they describe the desired outcome and leave the ports

considerable discretion in how to accomplish the task.

In our earlier work, we reported that effectively implementing such

standards in U.S. ports, even with the authority of the federal government

behind them, poses challenges. For example, at the Port of Tampa some

major employers, such as ship repair companies, hire hundreds of workers

for short-term projects as needs arise. Historically, according to port

authority officials, these workers have included people with criminal

records. However, new state requirements for background checks, as part

of the credentialing process, could deny such persons access to restricted

areas of the port.21 From a security standpoint, excluding such persons

may be advisable; but from an economic standpoint, a company may have

difficulty filling jobs if it cannot include such people in the labor pool.

Around the country, ports will face many such issues, ranging from these

credentialing questions to deciding where employees and visitors may

park their cars. To the degree that stakeholders disagree on specific

methods, or believe that specific security actions are unnecessary or

conflict with other goals and interests, achieving consensus about what to

do will be difficult.

Developing and implementing standards across international lines is likely

to present a formidable challenge as well, but doing so is essential to

protecting the integrity of the international supply chain. Efforts to

develop international standards are under way on several fronts, but much

 21The House-passed version of S. 1214, the Maritime Transportation Antiterrorism Act,

contains a provision that requires transportation security cards for entry to any secure area

of a vessel or facility. The bill requires the Secretary of Transportation to issue a card to an

individual who applies for one unless, after a background check, it is found that this

individual poses a terrorism security risk. The Senate-passed version of this bill does not

contain a similar provision, and it is unclear how the conference committee will decide this

issue.
Page 19 GAO-03-297T

still remains to do. For example, security procedures for loading and

sealing a container at the manufacturer’s or consolidator’s warehouse, or

for transferring cargo from one mode of conveyance to another, are still

under development. Likewise, international standards covering

documentation on the contents of cargo containers and the credentialing

of cargo handlers and port workers are still being discussed. Because of

the number and diversity of nations and stakeholders involved in the

international supply chain, achieving consensus on these and other

standards could be difficult and time consuming.

Effective cooperation is essential—and not ensured—even at the domestic

level. As we have reported, one challenge to achieving national

preparedness and response goals hinges on the federal government’s

ability to form effective partnerships among many entities.22 If such

partnerships are not in place—and equally important, if they do not work

effectively—those who are ultimately in charge cannot gain the resources,

expertise, and cooperation of the people who must implement security

measures.

Our reviews of domestic seaports have found that such partnerships can

break down even when procedures are supposedly in place. For example,

at the Port of Honolulu, a security plan exists that calls for notifying the

Coast Guard and local law enforcement authorities about serious

incidents. One such incident took place in April 2002 when, as cargo was

being loaded onto a cruise ship, specially trained dogs reacted to possible

explosives in one of the loads, and the identified pallet was set aside.

Despite the notification policy, personnel working for the shipping agent

and the private company providing security at the dock failed to notify

either local law enforcement officials or the Coast Guard about the

incident. A few hours after the incident took place, Coast Guard officials

conducting a foot patrol found the pallet, and, when told about the dogs’

reaction, immediately notified local emergency response agencies. Once

again, however, the procedure was less than successful because the

various organizations were all using radios that operated on different

frequencies, making coordination between agencies much more difficult.

Fortunately, the Honolulu incident did not result in any injuries or loss.

 22U.S. General Accounting Office, Homeland Security: Intergovernmental Coordination

and Partnership Will Be Critical to Success, GAO-02-899T (Washington D.C.: July 1, 2002);

GAO-02-900T (Washington D.C.: July 2, 2002); and GAO-02-901T (Washington D.C.: July 3,

2002).

Shared Responsibilities

Place a Premium on

Effective Cooperation
Page 20 GAO-03-297T

Just as efforts to enhance port security in the domestic environment

require the collaboration of many public and private parties, the

challenges internationally require cooperation and collaboration by a wide

array of stakeholders. Clearly, there are important initiatives moving

forward in the four major international institutions outlined above—on

port and carrier standards in the IMO, on customs procedures in the WCO,

on seafarer and port worker documentation in the ILO, and on standards

for electronic container seals in the ISO. Each organization is made up of

individual nations contributing different levels of development, maritime

activity, and economic capacity. Admiral James M. Loy, former

Commandant of the Coast Guard and current Acting Director of TSA, has

emphasized that reaching global agreements is critical, noting that

“international and domestic cooperation, both civil and military, is

essential...because we can’t hope to ensure our security by working alone

or by waiting until the threats have already crossed the thresholds of our

ports.”

23 Although many cooperative efforts are under way to address

supply chain security, achieving consensus among the diverse parties on a

number of matters in this area and forging comprehensive agreements to

address them will be challenging.

Many of the planned security improvements at seaports will require costly

outlays for infrastructure, technology, and personnel. Even before

September 11th, the Interagency Commission on Crime and Security in

U.S. Seaports24 estimated that the costs for upgrading security

infrastructure at U.S. ports will range from $10 million to $50 million per

port.25 Officials at the Port of New York and New Jersey estimate their

capital costs for bringing the port’s security into compliance with the

port’s vulnerability assessment at $73 million. The federal government has

already stepped in with additional funding for port security, but demand

has far outstripped the additional amounts made available.

International ports also may face funding challenges similar to those faced

by ports in the United States. Recently, at an Asia Pacific Economic

 23“The Unique Challenges of Maritime Security,” speech by Admiral James M. Loy, Propeller

Club of the United States, Washington, D.C., October 31, 2001.

24On April 27, 1999, the President established the Interagency Commission on Crime and

Security in U.S. Seaports. The Commission issued its report on August 28, 2000.

25Estimated range varies on the basis of port size and cost of the technology component of

the security upgrade.

Funding Issues Are Pivotal
Page 21 GAO-03-297T

Cooperation conference, Secretary of Transportation Norman Y. Mineta

echoed this sentiment, saying that implementation of security measures to

ensure safety of passengers and goods may challenge the resources of

foreign economies. However, the extent of any fiscal challenges faced by

specific foreign ports is unknown at this point.

In summary, Mr. Chairman, the nation’s approach to dealing with nuclear

smuggling is both to develop entirely new lines of defense overseas and to

shore up those defenses that are already in place in the nation’s ports. The

challenges domestically are well known and well chronicled: ports remain

susceptible to weapons of mass destruction, with neither our best

technology nor a set of clear standards and procedures in place. The

challenges overseas could be much the same. Just as inconsistent

standards and security vulnerabilities among domestic ports could lead

terrorists to seek the path of least resistance, overseas ports that do not

adopt strong security standards may attract the attention of those hoping

to inflict harm on America. At the domestic level, the challenges faced can

be mitigated somewhat by the fact that stakeholders ultimately share the

same goals of national security. Although all countries involved in

international commerce may share the basic goal of secure trade and may

share commitment, foreign countries may vary greatly in their

understanding of, vulnerabilities to, and capabilities to address the threats

involved.

Mr. Chairman, this completes my prepared statement. I would be pleased

to respond to any questions you or other Members of the Subcommittee

may have.

For information about this testimony, please contact JayEtta Z. Hecker,

Director, Physical Infrastructure Issues, at (202) 512-2834. Individuals

making key contributions to this testimony include Gene Aloise, Jonathan

Bachman, Seto Bagdoyan, Christine Broderick, Steven Calvo, Howard

Cott, Laurie E. Ekstrand, Etana Finkler, Gary Jones, Stan Stenersen, Eric

Wenner, Randy Williamson, and Loren Yager.

To determine the programs in place to prevent illegal fissile material or a

tactical nuclear weapon from being smuggled into the United States

through our ports, we relied on issues raised in a number of GAO-issued

products, as indicated in footnote 1.

Contacts and

Acknowledgments

Scope and

Methodology
Page 22 GAO-03-297T

To determine new efforts under way to improve port and container

security, both domestically and abroad, we talked with senior DOT, TSA,

and Coast Guard officials, including the Coast Guard representative to the

IMO on international initiatives, a senior TSA official regarding the status

of rulemaking to govern the Operation Safe Commerce pilot program, and

the Deputy Undersecretary of DOT who co-chairs the Container Security

Group on international initiatives to advance U.S. recommendations for

enhancing port and container security. We also met with representatives

from the Ports of Los Angeles, New York and New Jersey, and Seattle—the

three ports that are participating in the Operation Safe Commerce pilot

program—and discussed the new international and domestic initiatives.

We also obtained key documents and “white papers” on initiatives from

Coast Guard and DOT officials and from the Coast Guard, Customs, IMO,

WCO, ILO, and ISO Internet Web sites.

To determine the key challenges to implementing these initiatives and

efforts, we met with senior DOT, TSA, and Coast Guard officials, including

the Coast Guard representative to the IMO on international initiatives and

the Deputy Undersecretary of DOT who co-chairs the Container Security

Group on international initiatives to advance U.S. recommendations for

enhancing port and container security. We also met with representatives

from the Ports of Los Angeles, New York and New Jersey, and Seattle and

discussed the new international and domestic initiatives. We obtained key

documents and “white papers” on initiatives from Coast Guard and DOT

officials and from the Coast Guard, Customs, IMO, WCO, ILO, and ISO

Internet Web sites. We also relied on our previously issued product on port

security, GAO-02-993T, August 5, 2002.

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