Port and Maritime Security: Background and Issues for Congress
Released: 2005-05-27T00:00:00

Introduction

This report (1) provides background information and discusses potential issues for Congress on the topic of portsecurity, which has emerged as a significant part of the overall debate on U.S. homelandsecurity. (2) The terroristattacks of September 11, 2001 heightened awareness about the vulnerability to terrorist attack ofU.S. ports and the ships in them. The issue for Congress is providing oversight on port security andproposals for improving it. Port security legislation can have significant implications for publicsafety, the war on terrorism, the U.S. and global economy, and federal, state, and local homelandsecurity responsibilities and expenditures.

Background

Concerns for Port Security

Government leaders and security experts are worried that the maritime transportation systemcould be used by terrorists to smuggle personnel, weapons of mass destruction, or other dangerousmaterials into the United States. They are also concerned that ships in U.S. ports, particularly largecommercial cargo ships or cruise ships, could be attacked by terrorists. Experts are concerned thata large-scale terrorist attack at a U.S. port could not only cause local death and damage, but alsoparalyze global maritime commerce. The 9/11 Commission reported that, "While commercialaviation remains a possible target, terrorists may turn their attention to other modes. Opportunitiesto do harm are as great, or greater, in maritime and surface transportation. Initiatives to secureshipping containers have just begun." (3)

In response to concerns for port security, on November 14, 2002, Congress passed S. 1214 , as amended, the Maritime Transportation Security Act of 2002 (MTSA), andthe President signed it into law as P.L. 107-295 on November 25, 2002. The Coast Guard andMaritime Transportation Act of 2004 was signed into law as P.L. 108-293 on August 9, 2004. TitleVIII of the act adds specificity to some of the provisions in MTSA. On December 17, 2004, theIntelligence Reform and Terrorism Prevention Act of 2004 ( P.L. 108-458 ) was signed into law. Thisact implements the transportation security-related recommendations of the 9/11 Commission withrespect to maritime transportation.

There is continuing debate about whether current efforts to improve port security areadequate in addressing the threat. While many agree that Coast Guard and CBP initiatives to addressthe threat are strengthening the security of the maritime transportation system, they contend thatthese initiatives represent only a framework for building a maritime security regime, and thatsignificant gaps in security still remain.

Features of the U.S. Maritime System

U.S. Ports. The U.S. maritime system includesmore than 300 sea and river ports with more than 3,700 cargo and passenger terminals and more than1,000 harbor channels spread along thousands of miles of coastline. (4)

Transportation firms tend to concentrate traffic through major cargo hubs because of the highcost of their infrastructure. (5) The top 50 ports in the United States account for about 90% of allcargo tonnage and 25 U.S. ports account for 98% of all container shipments. (6) Energy products areconcentrated at particular ports. For instance, almost one-quarter of California's imported crude oilis offloaded in one geographically confined area. (7)

Commercial Ships Using U.S. Ports. In 2003,approximately 6,000 commercial ships made approximately 60,000 U.S. port calls. (8) Most ships calling at U.S.ports are foreign owned and foreign crewed; less than 3% of U.S. overseas trade is carried onU.S.-flag vessels. (9)

Cargo Containers. Container ships are a growingsegment of maritime commerce -- and the focus of much of the attention on seaport security. Container ships carry stacks of marine containers loaded with a wide variety of goods. A largecontainer ship can carry more than 3,000 containers, of which several hundred might be offloadedat a given port.

A marine container is similar to a truck trailer without wheels; standard sizes are 8 x 8 x 20feet or 8 x 8 x 40 feet. Once offloaded from ships, they are transferred to rail cars or tractor-trailersor barges for inland transportation. Over-the-road weight regulations generally limit the cargo loadof a 40 foot container to approximately 45,000 pounds. The estimated world inventory of containersis about 12 million. Container ships tend to carry higher-value cargo than other types of cargo ships. While they represent only 11% of annual tonnage, they account for 66% of the total value of U.S.maritime overseas trade. Containerized imports are dominated by consumer goods, such as clothing,shoes, electronics, and toys. U.S. automakers also import large quantities of parts in containers. Containerized exports are dominated by wastepaper, forest products, chemicals, and agriculturalproducts. (10)

More than 9 million cargo containers enter U.S. sea ports each year. For comparison, over13 million trucks and rail cars cross the Canadian and Mexican borders. CBP analyzes cargomanifest information for each container to decide which to target for closer inspection, based on suchfactors as origin, destination, shipper, and container contents. Only a small portion have theircontents physically inspected by CBP. Physical inspection could include scanning the entirecontainer with a sophisticated x-ray or gamma ray machine, unloading the contents of a container,or both. (11)

Importance of the U.S. Maritime System

Economic Importance. Ships are the primarymode of transportation for world trade. Ships carry approximately 80% of world trade byvolume. (12) The UnitedStates is the world's leading maritime trading nation, accounting for nearly 20% (measured in tons)of the annual world ocean-borne overseas trade. Ships carry more than 95% of the nation'snon-North American trade by weight and 75% by value. Trade now accounts for 25% of U.S. GrossDomestic Product (GDP), up from 11% in 1970. Over the next two decades, the total volume ofdomestic and international trade is expected to double.

Given the importance of maritime trade to the U.S. and world economies, disruptions to thattrade can have immediate and significant economic impacts. (13) By one estimate, the costto the U.S. economy of port closures on the West Coast due to a labor- management dispute wasapproximately $1 billion per day for the first five days, rising sharply thereafter. (14)

The container shipping system is designed for speed and efficiency. Transportation servicesare a critical component of the global, low-inventory (i.e., just-in-time) distribution model that manymanufacturers have adopted. Most industries in the United States use some imported componentsfrom overseas suppliers. By bringing parts to a plant just before they are needed for assembly,manufacturers can save money on warehouse space and inventory carrying costs. Transportefficiencies permit warehouse requirements to be minimized. Lean inventories in turn havecontributed to business productivity. From 1980 to 2000, according to one study, business logisticscosts dropped from 16.1% of U.S. GDP to 10.1%. (15)

Given the dependence of the United States and the global economy on a highly efficientmaritime transportation system, many experts acknowledge that slowing the flow of trade to inspectall inbound containers, or at least a statistically significant random selection would be "economicallyintolerable." (16) Supplychain analysts are concerned that increased security-related delay at seaports could threaten theefficiency gains achieved in inventory management over the past two decades by forcing companiesto hold larger inventories.

Enhanced security has benefits as well as costs. Many experts see economic benefits totighter control over maritime commerce. Resources put towards seaport security can also reducecargo theft, narcotic and migrant smuggling, trade law violations, the accidental introduction ofinvasive species, and the cost of cargo insurance. Improved planning for responding to a terroristattack at a seaport could also improve responses to other emergencies, such as natural disasters ortransportation accidents. New technologies intended to convert the sea container into a "smart box,"such as electronic seals, sensors, or tracking devices, could also improve shipment integrity, helpcarriers improve their equipment utilization, and help cargo owners track their shipments. Inresponse to the terrorist threat, the CBP has accelerated development of its new informationmanagement system, the Automated Commercial Environment (ACE). This system will assist CBPin evaluating cargo manifest information for high risk shipments but will also speed the customsfiling process for U.S. importers. (17)

National Security Importance. In addition to itseconomic significance, the marine transportation system is vital for national security. TheDepartments of Defense and Transportation have designated 17 U.S. seaports as strategic becausethey are necessary for use by DOD in the event of a major military deployment. Thirteen of theseports are commercial seaports. During Desert Storm, 90% of all military equipment and supplieswere shipped from U.S. strategic ports. The deployment required over 312 vessels from 18commercial and military ports in the United States. As the GAO has reported, "If the strategic ports(or the ships carrying military supplies) were attacked, not only could massive civilian casualties besustained, but DOD could also lose precious cargo and time and be forced to rely heavily on itsoverburdened airlift capabilities." (18)

Port Security Threat Scenarios

Security experts are concerned about a variety of terrorist threat scenarios at U.S. ports. Among other things, they are concerned that terrorists could:

use commercial cargo containers to smuggle terrorists, nuclear, chemical, orbiological weapons, components thereof, or other dangerous materials into the UnitedStates;

seize control of a large commercial cargo ship and use it as a collision weaponfor destroying a bridge or refinery located on the waterfront;

sink a large commercial cargo ship in a major shipping channel, therebyblocking all traffic to and from the port;

attack a large ship carrying a volatile fuel (such as liquefied natural gas) anddetonate the fuel so as to cause a massive in-port explosion;

attack an oil tanker in a port or at an offshore discharge facility (19) so as to disrupt the worldoil trade and cause large-scale environmental damage;

seize control of a ferry (which can carry hundreds of passengers) or a cruiseship (which can carry more than 3,000 passengers, of whom about 90% are usually U.S. citizens)and threaten the deaths of the passengers if a demand is not met;

attack U.S. Navy ships in an attempt to kill U.S. military personnel, damageor destroy a valuable U.S. military asset, and (in the case of nuclear-powered ships) cause aradiological release.

use land around a port to stage attacks on bridges, refineries located on thewaterfront, or other port facilities.

Some of these scenarios (or similar ones) have already come to pass elsewhere. For example,in October 2002, the French oil tanker Limberg appears to have been attacked by a bomb-laden boatoff the coast of Yemen, killing one crewman aboard the tanker, damaging the ship, and causing anoil spill. (20) In October2001, Italian authorities arrested on terrorism charges an Egyptian-born Canadian citizen found withhigh-tech equipment (including a satellite phone and a computer) and other personal possessions ina cargo container in an Italian port. (21) In October 2000, the U.S. Navy destroyer Cole was attacked bya bomb-laden boat during a refueling stop in the harbor of Aden, Yemen, killing 17 sailors, injuring39 others, and causing damage to the ship that cost about $250 million to repair. (22) In 1985, terrorists seized the cruise ship Achille Lauro in the Mediterranean and held its passengers hostage, killing one ofthem.

Much concern has focused on the threat that a sea container could be used to smuggle anuclear weapon into the United States. Experts are concerned that if a nuclear weapon in a containeraboard a ship in port is detonated, it could not only kill tens of thousands of people and causemassive destruction, but could also paralyze the movement of cargo containers globally, therebyshutting down world trade. (23)

Port and Ship Vulnerabilities to Terrorist Attack

Port Facilities. Port areas and ships in ports havemany vulnerabilities to potential terrorist attack. Port areas have very large landside perimeters tosecure, giving terrorists many potential landside points of entry. Some ports are located immediatelyadjacent to built-up urban areas, giving terrorists places to hide while approaching or escaping fromport areas. Large numbers of trucks move in and out of ports, making it possible for terrorists to usea truck to bring themselves and their weapons into a port. Many ports harbor fishing and recreationalboats that terrorists could use to mask their approach to a target ship.

Ships. Commercial cargo ships at pier or atanchorage in harbor are stationary, and those moving through port do so at slow speeds, makingthem easy to intercept by a fast-moving boat. Commercial cargo ships are generally unarmed andhave very small crews, making them vulnerable to seizure by a small group of armed people, asproven by modern-day pirates. In the 1990s, the number of reported attacks on cargo ships by piratestripled. (24) Most pirateattacks occur while the ship is in port. Although most attacks occur in Southeast Asian waters onforeign-flag freighters, U.S. shippers are likely to be among the owners of cargo onboard. It can alsobe noted that some experts believe there is a link between piracy and terrorism -- that the goal ofsome acts of piracy may be to raise money to finance terrorist operations. The Financial Times hasreported an incident where a chemical tanker in the south Pacific was boarded by pirates whopracticed steering the vessel at varying speeds for several hours. (25)

The lack of transparency in ship registration has been a longstanding concern. AnOrganization for Economic Cooperation and Development (OECD) study on the ownership andcontrol of ships reports that:

Not only does perfect transparency not exist, but in factanonymity seems to be the rule rather than the exception, and not only is it permitted, but in manycases positively encouraged. This enables terrorists and would be terrorists to remain intimatelyinvolved in the operation of their vessels, while maintaining totally hidden, through the use ofrelatively simple mechanisms that are readily available and legally tolerated in almost alljurisdictions. (26)

Unscrupulous ship owners are known to mask their identity by re-registering their vesselsunder fictitious corporate names and renaming and repainting their ships. Shipowners can registertheir vessels in "flag of convenience" countries which may have lax regulations and require littleinformation from the applicants. According to press reports, U.S. intelligence officials believe theyhave identified 15 cargo ships that have links to al Qaeda. (27)

Container Shipments. The complexity of theprocess for completing containerized shipments makes it more difficult to ensure the integrity of thistype of cargo. (28) Unlikeother cargo ships whose loading process occurs at the port and whose cargo is often owned by asingle company, container ships carry cargo from hundreds of companies and the containers areloaded away from the port at individual company warehouses. A typical single container shipmentmay involve a multitude of parties and generate 30 to 40 documents. A single container could alsocarry cargo for several customers, thus multiplying the number of parties and documents involved. The parties involved in a shipment usually include the exporter, the importer, a freight forwarder,a customs broker, a customs inspector, inland transportation provider(s) (which may include morethan one trucker or railroad), the port operators, possibly a feeder ship, and the ocean carrier. Eachtransfer of the container from one party to the next is a point of vulnerability in the supply chain. The security of each transfer facility and the trustworthiness of each company is therefore critical inthe overall security of the shipment. It is also important to keep in mind that not all U.S.-boundcontainers arrive at U.S. ports. Half of the containers discharged at the Port of Montreal, forinstance, move by truck or rail for cities in the northeastern or mid-western United States. (29) Also, many containers thatenter U.S. waters are bound for other nations.

Maritime Crimes. Security experts warn thatterrorists attempting to use a container to smuggle a weapon of mass destruction or componentsthereof into the United States could purchase a known exporter with a long and trustworthy shippingrecord. Drug smugglers have been known to employ this strategy to disguise their contraband inotherwise legitimate cargo. While both the Coast Guard and CBP are experienced in the marineenvironment with the "war on drugs," they recognize that terrorism is a different kind of threat. Among other things, drug smugglers are often interested in finding a smuggling method that can beused over and over to make multiple shipments. This permits the Coast Guard and CBP to look forcertain patterns of operation among drug smugglers. Terrorists, on the other hand, are more likelyto be interested in using a particular method of attack only once, to carry out a particular terroristoperation. This makes the tactic of looking for patterns of operation potentially much less useful. Another difference concerns the potential consequences of failure to detect and intercept. Given thetremendous amount of cargo arriving at seaports, the mission of interdicting illegal drugs or aweapon of mass destruction is often described as searching for the needle in the haystack. In the caseof the weapon of mass destruction, however, the potential consequence of not finding the so-calledneedle is much greater.

The incidence of other shipping-related crimes also attests to the challenges faced inimproving port security. The National Cargo Security Council estimates that cargo theftdomestically ranges between $10 billion and $15 billion annually. (30) The FBI believes muchof this theft occurs in or near seaports. (31) Identifying where cargo theft occurs in the transportation systemmay help identify where terrorist infiltration could occur.

Government Authorities at Seaports

Port Governance and Financing. In consideringhow to enhance seaport security, it is important to know how they are governed and operated. Thegoverning structure of ports varies from place to place. While the federal government hasjurisdiction over interstate and foreign commerce and designated federal waterway channels, stateor local governments have ownership over ports. There are ports which are part of state governmentand others which are part of city government. The Port Authority of New York and New Jersey andthe Delaware River Port Authority are examples of bi-state or regional port agencies.

Ports can be a subsidiary of a public agency but may be structured to act as a private sectorcorporation. Most ports are "landlord ports," which means the port provides the basic services andinfrastructure but the tenant, such as a terminal operator, performs most of the activity. "Operatingports" both generate and carry out most of the activity at the port. In addition to city lawenforcement personnel, some port authorities also have their own police forces.

Depending on how they are structured, ports finance infrastructure improvements througha variety of means. Some may levy taxes, if they are granted this authority. Ports may also pay forinfrastructure with the general funds they receive from the governments they are a part of, fromoperating revenues, general obligation bonds, revenue bonds, trust fund monies, or loan guarantees. Most ports generally break even or are minimally profitable. (32)

Federal Agencies Involved in Port Security. Federal agencies involved in port security include the Coast Guard, the Bureau of Customs andBorder Protection (CBP), and the Transportation Security Agency (TSA), all of which are housedin the Department of Homeland Security (DHS), and the Maritime Administration (MARAD). TheCoast Guard and CBP are the two federal agencies with the strongest presence at seaports.

Coast Guard. The Coast Guard is the nation'sprincipal maritime law enforcement authority and the lead federal agency for the maritimecomponent of homeland security, including port security. (33) Among other things, the Coast Guard is responsible forevaluating, boarding, and inspecting commercial ships as they approach U.S. waters, for counteringterrorist threats in U.S. ports, and for helping to protect U.S. Navy ships in U.S. ports. Ahigh-ranking Coast Guard officer in each port area serves as the Captain of the Port (COTP), whois lead federal official responsible for the security and safety of the vessels and waterways in his orher geographic zone. Under the terms of the Ports and Waterways Safety Act of 1972 (P.L. 92-340)and the recently enacted Maritime Transportation Security Act of 2002, the Coast Guard hasresponsibility to protect vessels and harbors from subversive acts.

Bureau of Customs and Border Protection. TheBureau of Customs and Border Protection (CBP) is the federal agency with principal responsibilityfor inspecting cargoes, including cargo containers, that commercial ships bring into U.S. ports andfor the examination and inspection of ship crews and cruise ship passengers for ships arriving in U.S.ports from any foreign port. Prior to the establishment of the CBP, customs and immigrationfunctions at U.S. borders were conducted separately by the Department of the Treasury's U.S.Customs Service and the Department of Justice's Immigration and Naturalization Service.

Transportation Security Administration. TSA is anagency created by the Aviation and Transportation Security Act of 2001 ( P.L. 107-71 ). Initially, itsfocus was the security of air transportation but it is responsible for the security of all modes oftransportation, cargo and passenger.

Maritime Administration. MARAD, which is partof the Department of Transportation (DOT), is a civilian agency that supports the U.S. commercialmaritime industry. MARAD publishes regular Maritime Security Reports and a national planningguide on port security. MTSA requires MARAD to publish a revised version of its national planningguide on port security.

Port Security Initiatives by Federal Agencies

Coast Guard. In response to the terrorist attacksof September 11, 2001, the Coast Guard created the largest port-security operation since World WarII. Coast Guard cutters and aircraft were diverted from more distant operating areas to patrol U.S.ports and coastal waters. The Coast Guard began to maintain security zones around watersidefacilities, Navy ships, and cruise and cargo ships entering or leaving port. Coast Guard port securityteams began to inspect certain high-interest vessels, and Coast Guard sea marshals began escortingcertain ships transiting the harbor.

To counter the terrorist threat, the Coast Guard and CBP have sought to improve the qualityand advance the timing of information submitted to them by shippers and carriers so that they canbetter evaluate the terrorist risk of ships, cargo, or crew bound for the United States. By increasingtheir knowledge of the various parties in the marine environment it is hoped that federal authoritieswill be better able to separate the bad from the good without impeding the flow of legitimatecommerce.

In support of this goal, the Coast Guard has instituted new reporting requirements for ships enteringand leaving U.S. harbors. The former 24-hour advance Notice of Arrival (NOA) has been extendedto a 96-hour NOA. The NOA includes detailed information on the crew, passengers, cargo, and thevessel itself.

The Coast Guard has also developed the concept of maritime domain awareness (MDA). MDA involves fusing intelligence information with information from public, private, commercial,and international sources to provide a more complete picture of potential maritime security threats. The Coast Guard will use this picture to support a risk-management approach to preventing ormitigating terrorist threats through the use of actionable knowledge. (34) In support of the MDAeffort, the Coast Guard is expanding a vessel tracking system (the Automatic Identification System)to monitor ship traffic in harbors and is underway on a multibillion dollar effort (the Deepwaterprogram) to replace and modernize its aging vessels and aircraft. (35)

On October 22, 2003 the Coast Guard issued final rules implementing MTSA. (36) These regulations becameeffective on November 21, 2003.

Bureau of Customs and Border Protection. Among the programs CBP has initiated to counter the terrorist threat are the Container SecurityInitiative (CSI) and the Customs-Trade Partnership Against Terrorism (C-TPAT). CSI is a seriesof bilateral, reciprocal agreements that, among other things, allow CBP personnel at selected foreignports to pre-screen U.S.-bound containers. In order to give inspectors the data and time they needto pre-screen containers, CBP issued a new rule requiring that information about an ocean shipmentbe transmitted to CBP 24 hours before the cargo is loaded at a foreign port onto a U.S.-bound vessel. Previously, ocean carriers did not submit this information until the ship arrived at a U.S. port. CBPis also requiring more comprehensive and specific cargo information so it can more efficientlyevaluate individual container shipments for risks of terrorism. More detailed descriptions areintended to help speed up non-intrusive inspections of high risk containers by reducing the numberof containers inspectors need to unload for closer examination. The rationale of CSI is that a nuclearweapon or a radiological "dirty bomb" (37) that enters a U.S. port could be detonated, before the ship isinspected. (38)

C-TPAT, initiated in April 2002, offers importers expedited processing of cargo if theycomply with CBP guidelines for securing their entire supply chain. Businesses that sign up for theprogram are required, among other things, to conduct a comprehensive self-assessment of theirsupply chain and submit a completed questionnaire to CBP that describes their current securitypractices. If CBP certifies an applicant, they may benefit from a reduced number of cargoinspections, thus reducing the risk of shipment delay.

Transportation Security Administration. TheTransportation Security Administration in conjunction with CBP is conducting the Operation SafeCommerce (OSC) pilot project. (39) The goal of OSC is to verify the contents of containers at theirpoint of loading, ensure the physical integrity of containers in transit, and track their movementthrough each mode of transport from origin to final destination. Container tracking is a key area ofdebate on cargo security. Various "smart container" devices are being developed that would providereal-time location information and container tampering notification. The challenge is developinga device that can withstand the harsh ocean environment, be relatively inexpensive, and reliableenough not to trigger false alarms. TSA is also field-testing a Transportation Worker IdentificationCredential (TWIC) for workers in all modes of transportation that will be used to control access tosecure areas of cargo and passenger facilities. The agency has developed a "MaritimeSelf-Assessment Risk Module" to assist port terminal and vessel owners in developing their securityplans as required by MTSA.

Maritime Administration. MARAD, along withthe Coast Guard, CBP, and TSA, is part of the Container Working Group which has made classifiedrecommendations on how best to ensure the security of marine container transportation. MARADhas also developed a curriculum for training maritime security personnel.

International Institutions. In June 2002, theGroup of Eight Nations identified the IMO and the World Customs Organization (WCO) as twoinstitutions that should develop global initiatives to improve maritime security.

At its December 2002 conference, the IMO adopted a new chapter to the Safety of Life at Sea(SOLAS) Convention entitled International Ship and Port Facility Security (ISPS) Code. (40) The code contains bothmandates and voluntary measures to improve maritime security. IMO member governments haduntil July 1, 2004 to implement the new regulations. The code largely parallels the requirementscalled for in MTSA. (41)

The World Customs Organization is a Brussels-based entity that has been working towardssimplifying and harmonizing customs procedures to improve the efficiency of cross-bordertrade. (42) Currently, 164countries accounting for 99% of world trade are members of the WCO. In June 2002, the WCOcreated a task force to draft a "Resolution on Security and Facilitation of the International SupplyChain" which they completed in June 2003. In May 2005, the WCO issued its Framework ofStandards to Secure and Facilitate Global Trade. The framework sets out principles for advance,electronic reporting of cargo and shipper data and requires importers to verify security measurestaken by its suppliers.

Recent Law on Port Security

The bill creating the new Department of Homeland Security (DHS), was passed by the Senateon November 19, 2002 and by the House on November 22, 2002, and signed into law as P.L.107-296 on November 25, 2002. The DHS incorporates the Coast Guard, the former CustomsService, and TSA, among others. (43)

The Maritime Transportation Security Act of 2002 was passed by Congress on November14, 2002 and signed into law as P.L. 107-295 on November 25, 2002. The act creates a U.S.maritime security system and requires federal agencies, ports, and vessel owners to take numeroussteps to upgrade security. The act requires the Coast Guard to develop national and regional areamaritime transportation security plans. It requires ports, waterfront terminals, and certain types ofvessels to develop security and incident response plans with approval from the Coast Guard. Theact authorizes CBP to require that cargo manifest information for inbound or outbound shipmentsbe provided to the agency electronically prior to the arrival or departure of the cargo. Thisinformation may be shared with other appropriate federal agencies. The legislation calls on theDepartment of Transportation to determine the level of funding needed for a grant program that willfinance security upgrades. The act also authorizes $90 million in grants for research anddevelopment in improving cargo inspection, detecting nuclear materials, and improving the physicalsecurity of marine containers. A dispute over how to pay for the cost of enhancing port security wasresolved by eliminating controversial user fee provisions from the conference report (funding issuesare discussed further below).

The Trade Act of 2002 ( P.L. 107-210 ) was enacted into law on August 6, 2002. Section 343provides authority to CBP to issue regulations requiring the electronic transmission of cargoinformation to CBP prior to the shipments' exportation or importation into the United States.

The Coast Guard and Maritime Transportation Act of 2004 was signed into law as P.L.108-293 on August 9, 2004. Title VIII of the act contains a number of provisions related to maritimesecurity, many of which add specificity to provisions in MTSA. Among other things, the act requiresthe DHS to submit a plan to Congress implementing a maritime intelligence system (section 803);it requires the DHS to submit a plan for a maritime security grant program, includingrecommendations on how funds should be allocated (section 804); it requires the Coast Guard toreport on the implementation and use of joint operational centers at certain U.S. ports (section 807);it requires the DOT to investigate and examine sensors that are able to track marine containersthroughout their supply chain and detect hazardous and radioactive materials within the containers(section 808); it requires the DHS to report on the costs of vessel and container inspections, and aplan for implementing secure systems of transportation, including the need for and feasibility toinspect and monitor intermodal shipping containers within the United States (section 809).

The week of December 6, 2004, Congress passed the Intelligence Reform and TerrorismPrevention Act of 2004 ( P.L. 108-458 ). The act imposes an urgency on DHS's efforts instrengthening maritime security by imposing deadlines on the agency in planning and carrying outcertain maritime security activities that were called for in MTSA. This includes a deadline of April1, 2005 for completion of a national maritime security plan; a deadline of December 31, 2004 forcompletion of facility and vessel vulnerability assessments; and deadlines for a deployment plan forTWIC, a status report on standards for seafarer identification, and a status report on establishingperformance standards for container seals and locks. The act also requires DHS to create a terrorism"watch list" for passengers and crew aboard cruise ships.

Issues for Congress

The challenge of port security raises several potential issues for Congress. Some Membersof Congress, who have introduced their own versions of maritime security legislation, are concernedthat MTSA does not go far enough in its requirements. In addition to considering further portsecurity legislation, Congress is debating whether the federal government is providing enough fundsto port authorities and border agencies for improving port security. Congress is also considering howto pay for port security.

Addressing the Threat

A major concern for Congress is assessing whether the Nation is addressing the threat tomaritime security with enough urgency. Despite the progress that has been made in strengtheningport security thus far, many security officials still describe seaports as "wide open" and "veryvulnerable" to terrorist attack. (44) Seaports, along with air cargo, general aviation, and mass transitwere identified in a recent GAO report as the "major vulnerabilities" remaining in the nation'stransportation system. (45) The GAO found that "an effective port security environment may be many years away." While manyagree that CSI, C-TPAT, OSC, and MDA, are sound strategies for addressing the threat, they contendthat these programs represent only a framework for building a maritime security regime, and thatsignificant gaps in security still remain. In the words of one security expert, (46)

Right now, none of these initiatives has changed theintermodal transportation environment sufficiently to fundamentally reduce the vulnerability of thecargo container as a means of terrorism. However, all are important stepping-off points for buildingan effective risk management approach to container security -- a foundation that simply did not existprior to September 11, 2001.

In its oversight role, Congress is examining the effectiveness of these programs in addressingthe terrorist threat, whether they are proceeding at sufficient pace, and whether enough resources arebeing provided to implement these and other security initiatives.

Some observers and Members of Congress are concerned that initiatives to fill gaps in portsecurity are not proceeding at a sufficient pace. TSA's program to credential all transportationworkers and its effort to develop a "smart-box" to ensure the integrity of container shipments hasalso been criticized for moving forward too slowly. Some argue that the security funding providedto seaports, especially when compared to the amount provided to airports, is woefully inadequate.

Others argue that current efforts to improve port security are proceeding at an unprecedentedpace. They note that the IMO, with leadership from the U.S. Coast Guard, agreed to newinternational port security measures within a year. They also note that the Coast Guard issued finalrules implementing MTSA within a year after becoming law. During Operation Liberty Shield,(March 17, 2003 through April 16, 2003) the Coast Guard and CBP demonstrated their ability torapidly intensify port security operations by increasing ship and cargo inspections, increasing air andsurface patrols, escorting more ships through harbors, and other activities. (47)

Funding Port Security

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

Sources of Funds. A dispute over how to financesecurity requirements arose during the conference committee on MTSA. Senator Hollings proposedcreating a system of user fees on ship cargo as a means of generating funds for port security upgradesrequired in the legislation. Other conferees opposed this proposal, calling the user fees a tax. Somepolicymakers contend that without providing a funding source, the act amounts to an unfundedmandate.

Port authorities, ocean carriers, and shippers argue that port security is a national concern andtherefore the federal government should finance it through general revenues. Others argue that themaritime industry should finance port security through user fees because it is a direct beneficiary ofimproved security as it reduces cargo theft and other economic damages. (50)

Proponents of user fees contend that user surcharges are an effective means of ensuringimproved security because they would provide a more secure and predictable source of funding thanannual appropriations. They propose that a port security trust fund be created in a manner thatprevents the user fees from being spent on anything other than port security. If such a port securitytrust fund were created, they argue, port security would not have to compete with other fundingpriorities in the annual appropriations process. Some economists contend that a user fee system isalso more efficient than direct subsidies because the users of the service being provided (in this caseport security) are likely to demand that policymakers spend the funds in the most productive manner.

Allocating Resources. An issue of likely interestto Congress is how to allocate resources appropriately to the various ports. Maximum security isprohibitively expensive. Therefore, it is important to properly identify specific security areas thathave the greatest vulnerability and apportion funds accordingly. Criteria could include a port'srelative economic importance and its proximity to an urban or sensitive area. The 9/11 Commissioncriticized the TSA for lacking a strategic plan for systematically analyzing transportation assets,risks, costs, and benefits in order to allocate limited resources in the most cost-effective way. (51) The Inspector General ofthe DHS was critical of port security grant award decisions made thus far and maderecommendations for improving them. (52)

Resources for Foreign Ports. In addition tofunding security at U.S. ports, there is also the issue of finding resources for improving security atforeign ports, especially in developing countries that may not be able to afford the technology toimprove their ports' security. The IMO's recent adoption of new security measures includes astatement inviting the Secretary General of the IMO to give early consideration to establishing a"Maritime Security Trust Fund" for the purpose of providing financial support in developingcountries for strengthening their maritime security infrastructure. (53)

Balancing Security and Commerce

Security experts argue that perfect maritime security can only be achieved by shutting downthe transportation system. As one observer stated, "a harbor without ships is safe, but that is notwhat harbors are built for." (54) The issue for Congress is how to increase port security to desiredlevels while minimizing the economic impacts associated with impeding the maritime trade system. When security experts speak of significant gaps still remaining in maritime security, they are oftenreferring to the credibility problems associated with the container loading and screening processoverseas and the true identity of ships and their crew on the high seas.

Point of Origin Cargo Security. A major area ofconcern is ensuring the integrity of cargo as it begins its transit to the United States from its overseasorigin. Point of origin security is necessary because inspecting cargo on the high seas is practicallyimpossible and inspecting cargo upon its arrival at a U.S. port could be too late to prevent a terroristevent. Ensuring that the container was not stuffed with illegitimate cargo at the overseas factory, thatthe loaded container was not tampered with while trucked to the port of loading, and ensuring thatthe cargo information reported to CBP is not fraudulent are all critical challenges in supply chainsecurity. Congress is examining the effectiveness of C-TPAT, CSI, and OSC in ensuring theintegrity of U.S. bound cargo at its overseas point of origin. Issues include what type of proceduresare necessary to verify the legitimacy of cargo loaded into a container, what type of "smart box"devices should be required to ensure the physical integrity of the container while en route, and whatspecific information should cargo manifests contain to enable CBP to target shipments for closerinspection.

The GAO investigated how the CSI and C-TPAT programs were being implemented andfound several shortcomings that need correction. (55) The GAO found that C-TPAT participants were benefitting fromreduced scrutiny of their imported cargo after they had been certified into the program but beforeCBP had validated that the participants were indeed carrying out the promised security measures. The GAO also found that not all containers that CBP had targeted for inspection at the overseasloading port were being inspected by the host customs administration. The GAO found other flawsin these two programs and CBP has taken corrective action to address some of these flaws. (56)

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

Congress is likely to examine the effectiveness of Coast Guard and international efforts atraising the security level of ship operators. Skeptics contend that the new IMO regulations mostlyoffer the illusion of increased security. They contend that "flag of convenience" countries lack theresolve to enforce these standards and that the compliance documentation is too easy to manipulatein order to appear as legitimate operators. (57) While the United States enforces its standards when the CoastGuard selects arriving ships for boarding, their burden is greater if there is no effective internationalshipping regime that pre-screens sub-standard shipping.

International Considerations

In the wake of the terrorist attacks of September 11, 2001, a consensus emerged amongexperts involved in the issue that an effective solution for securing maritime trade requires creatingan international maritime security regime. This regime would rely not on a single solution, such asincreasing the number of container inspections, but rather on a layered approach with multiple linesof defense from the beginning to the final destination of a shipment. The first security perimeter inthis "defense in depth" strategy would be at the overseas point of origin. (58) Security experts argue thatan effective solution must start with preventing undesired items from entering the maritimetransportation network, because if some of these items -- particularly nuclear weapons or dirty bombs-- reach a U.S. seaport, they could be detonated before inspectors could find them.

A related issue is whether raising international port security standards should become partof international trade agreements. Thus far, the United States' strategy has been to raise standardsby working within the maritime transportation industry, such as through the IMO. However, someassert that given the strong link between maritime security and international trade, the United Statescould also pursue international port security standards as part of international trade agreements.

Standard vs. Site-Specific Measures

An additional issue for Congress is determining what elements of port security might be bestaddressed through across-the-board requirements that establish common standards and practices tobe applied at all seaports, versus those elements of port security that might be best addressed througha tailored, bottom-up approach that employs measures that are designed to fit the specificcircumstances and meet specific needs of each seaport.

Some observers, while acknowledging the need for site-specific measures, argue that acertain amount of uniform measures are necessary to help ensure that no seaport remains excessivelyvulnerable to terrorist attack. Other observers argue that while standardized measures make senseup to a point, the effort to implement such measures must not come at the expense of efforts todevise and implement site-specific security measures that respond to the unique characteristics ofeach port. Compared to commercial airports, seaports are generally more diverse in terms of theirphysical infrastructure and operations. As a result of this diversity in characteristics, each ship andport facility presents different risks and vulnerabilities.

Port authorities are also very concerned with finding the right balance between standard andport specific security regulations. Ports seek a level of uniformity in security requirements becausethey are concerned that their customers will move their business to competing ports where theirgoods may be cleared more quickly. At the same time, ports do not want to be held to inflexiblefederal standards. They are concerned that setting security benchmarks may waste time andresources if those benchmarks are not applicable at their port given their particular commodity mixor other unique circumstances.

Security Cards. In addition to improving thesecurity infrastructure of U.S. ports, there is also the issue of ensuring the trustworthiness of thepeople who work in them. Issuing credentials for port workers illustrates the challenge ofimplementing standard security measures. One of the difficult questions is what should disqualifysomeone from holding a job in a port area. MTSA (Section 70105) requires the Secretary ofHomeland Security to develop a transportation security card for port workers that would be used tolimit access to secure areas in a port. (59) Among the items that would disqualify a port worker fromobtaining a card would be a felony conviction within the last seven years that the Secretary believescould cause the individual to be a terrorism risk. (60) The USA PATRIOT Act ( P.L. 107-273 ) passed in October 2001,requires background checks for truckers carrying hazardous materials. The TSA is developing a"Transportation Worker Identification Credential" (TWIC) Program that will use biometric cardsissued to all transportation workers to limit access to secure areas in the nationwide transportationnetwork.

Issuing transportation ID cards is an example of an across-the-board requirement. However,the difficulty of implementing such measures at specific ports is illustrated below: (61)

...Tampa offers a good example. Some of the port'smajor employers consist of ship repair companies that hire hundreds of workers for short-termprojects as the need arises. Historically, according to port authority officials, these workers haveincluded persons with criminal records. However, new state requirements for background checks,as part of issuing credentials, could deny such persons needed access to restricted areas of the port. From a security standpoint, excluding such persons may be advisable; but from an economicstandpoint, a company may have difficulty filling jobs if it cannot include such persons in the laborpool.

Roles and Responsibilities

A major concern for U.S. policymakers is assigning roles and responsibilities for maritimesecurity among federal agencies, among federal, state, and local agencies, and between governmentagencies and private industry. Clear roles and responsibilities are needed to prevent overlap,duplication of effort, and conflicting regulations. It is critical that the maritime trade communityperceives that federal agencies are working in concert, otherwise the DHS's goal of a closepartnership with industry in fighting terrorism may be frustrated.

Intelligence Sharing. The difficulty of detectingterrorist activity once it has entered the maritime system may point to the value of intelligence. Mostacknowledge that there is just too much cargo, coming from all corners of the globe, to scrutinizeeach shipment thoroughly. Uncovering terrorist activity is likely to require "actionable" or preciseintelligence identifying exactly which shipment to intercept. The GAO reports that "in surfacetransportation, timely information-sharing has been hampered by the lack of standard protocols toexchange information among federal, state, and local government agencies and private entities." (62) One barrier to moreeffective intelligence sharing with local port authorities may be that state and local governmentofficials do not have the required security clearances.

Private Industry's Role. A broad policy questionfor Congress is how much of a role the private sector should have in enhancing maritime security. Many observers believe that businesses will worry more about near term profits than the remotepossibility that their property will be attacked. (63) At the same time, most experts acknowledge that there are justtoo many cargo movements for the government to monitor on its own. Security experts believe thattightening control over maritime commerce requires that security be "embedded" into everydaybusiness processes. CBP's C-TPAT program is intended to enlist the effort of the many companiesinvolved in international container shipments. In its oversight responsibilities, Congress mayevaluate the effectiveness of this program, particularly in ensuring the due diligence of maritimetraders over the long term. Congress may consider how best to ensure sustained follow through onthe part of C-TPAT participants. A "trust but verify" approach utilizing regular CBP security auditsmay be one strategy policymakers consider.

Selected Port Security Legislation Introduced in the 109th Congress

Several proposals have been introduced in the 109th Congress to improve port security. Inthe House, H.R. 163 , introduced by Representative Millender-McDonald, would createa pilot program for the sealing of empty containers. H.R. 173 , introduced byRepresentative Millender-McDonald, would amend the criminal code to include certain terroristrelated acts in the marine environment as unlawful, require the Attorney General to coordinateport-related crime data collection, as well as other port security related provisions. H.R. 478 , introduced by Representative Millender-McDonald, authorizes federal port security grants andthe issuance of letters of intent to fund port security projects. H.R. 785 , introduced byRepresentative Stearns, would create a federal database for the collection of cargo crime data. H.R. 1731 , introduced by Representative Harman, authorizes federal port security grantsto be funded from Customs import duties. H.R. 1817 , the DHS Authorization Act forFY2006, which passed the House on May 18, 2005, contains numerous provisions related to portsecurity.

In the Senate, S. 3 , introduced by Senator Gregg, makes unlawful certain actsrelated to maritime security. S. 12 , introduced by Senator Biden, would accelerate thedeployment of radiation detection portal equipment at U.S. and foreign seaports and establish atanker security initiative, among other provisions. S. 376 , introduced by SenatorHutchinson, requires the DHS to develop a strategy to ensure the security of intermodal shippingcontainers, whether imported, exported, or shipped domestically and requires that no less than halfof all imported containers be equipped with "smart box" technology by 2007. S. 378 ,introduced by Senator Biden, and reported by the Committee on the Judiciary on April 21, 2005,increases penalties for certain maritime crimes. S. 744 , introduced by Senator Nelson,requires the Maritime Administration to create a Caribbean Basin Port Security Assistance Program. S. 855 , introduced by Senator Collins, parallels H.R. 1731 . S. 1052 , introduced by Senator Stevens, would establish additional joint harbor operational centers forport security, establish a deadline of January 1, 2006 for the issuance of the TWIC card, requireimporters to submit additional manifest data as part of the 24 hour rule, increase the number of CSIinspectors, establish and develop a plan for the random inspection of shipping containers, requireDHS to conduct a study on the desirability of creating a user fee for funding port security, as wellas other provisions related to port security.