CBP maintains two overarching goals: (1) increasing security and (2) facilitating legitimate trade and travel. Disruptions to the supply chain could have immediate and significant economic impacts. For example, in terms of containers, CBP data indicates that in 2003 about 90 percent of the world’s cargo moved by container. In the United States, almost half of all incoming trade (by value) arrived by containers on board ships. Additionally, containers arrive via truck and rail. Both admitting dangerous cargo into the country and delaying the movement of cargo containers through ports of entry could negatively affect the national economy. Therefore, CBP believes it is vital to try to strike a balance between its antiterrorism efforts and facilitating the flow of legitimate international trade and travel. The terrorist events of September 11, 2001, raised concerns about company supply chains, particularly oceangoing cargo containers, potentially being used to move WMD to the United States. An extensive body of work on this subject by the Federal Bureau of Investigation and academic, think tank, and business organizations concluded that while the likelihood of such use of containers is considered low, the movement of oceangoing containerized cargo is vulnerable to some form of terrorist action. Such action, including attempts to smuggle either fully assembled WMD or their individual components, could lead to widespread death and damage. The supply chain is particularly vulnerable to potential terrorists because of the number of individual companies handling and moving cargo through it. To move a container from production facilities overseas to distribution points in the United States, an importer has multiple options regarding the logistical process, such as routes and the selection of freight carriers. For example, some importers might own and operate key aspects of the overseas supply chain process, such as warehousing and trucking operations. Alternatively, importers might contract with logistical service providers, including freight consolidators and nonvessel-operating common carriers. In addition, importers must choose among various modes of transportation to use, such as rail, truck, or barge, to move containers from the manufacturer’s warehouse to the port of lading. CBP has implemented a layered enforcement strategy to prevent terrorists and WMD from entering the United States through the supply chain. One key element of this strategy is the C-TPAT program. Initiated in November 2001, C-TPAT is a voluntary program designed to improve the security of the international supply chain while maintaining an efficient flow of goods. Under C-TPAT, CBP officials work in partnership with private companies to review their supply chain security plans to improve members’ overall security. In return for committing to making improvements to the security of their shipments by joining the program, C-TPAT members may receive benefits that result in reduced scrutiny of their shipments (e.g., reduced number of inspections or shorter border wait times for their shipments). C-TPAT membership is open to U.S.-based companies in the trade community, including (1) air/rail/sea carriers, (2) border highway carriers, (3) importers, (4) licensed customs brokers, (5) air freight consolidators and ocean transportation intermediaries and nonvessel-operating common carriers, and (6) port authorities or terminal operators. Of these companies, CBP grants importers key program benefits. According to CBP, program membership has grown rapidly, and continued growth is expected, especially as member importers are requiring their suppliers to become C-TPAT members. For example, as of January 2003 approximately 1,700 companies had become C-TPAT members. By May 2003, the number had nearly doubled to 3,355. According to CBP officials, as of April 2005, the C-TPAT program had over 9,000 members. For fiscal year 2005, the C- TPAT budget request was about $38 million, with a requested budget for fiscal year 2006 of about $54 million for program expansion efforts. As of August 2004, CBP had hired 40 supply chain specialists, who are dedicated to serve as the principal advisers and primary points of contact for C-TPAT members. The specialists are located in Washington, D.C., Miami, Florida, Los Angeles, California, and New York, New York. CBP has a multistep review process for the C-TPAT program. Applicants first submit signed C-TPAT agreements affirming their desire to participate in the voluntary program. Applicants must also submit security profiles— executive summaries of their company’s existing supply chain security procedures—that follow guidelines jointly developed by CBP and the trade community. These security profiles are to summarize the applicant’s current security procedures in areas such as physical security, personnel security, and education and training awareness. Next, CBP established a certification process in which it reviews the applications and profiles by comparing their contents with the security guidelines jointly developed by CBP and the industry, looking for any weaknesses or gaps in the descriptions of security procedures. Once any issues are resolved to CBP’s satisfaction, CBP signs the agreement and the company is considered to be certified C-TPAT member, eligible for program benefits. However, members that are importers must first complete another review, as described below, before benefits can begin. CBP encourages all members to conduct self-assessments of their security profiles each year to determine any significant changes and to notify CBP. For example, members may be using new suppliers or new trucking companies and would need to update their security profiles to reflect these changes. For certified importers, CBP has an additional review called the vetting process in which CBP reviews information about an importer’s compliance with customs laws and regulations and violation history. Conducted concurrently with the certification process, CBP requires the vetting process for certified importers as a condition of granting them key program benefits. As part of the vetting process, CBP obtains trade compliance and intelligence information on certified importers from several data sources. If CBP gives the importer a favorable review under both the vetting process and the certification process, benefits are to begin within a few weeks. If not, benefits are not to be granted until successful completion of the validation process, as described below. The final step in the review process is validation. CBP’s stated purpose for validations is to ensure that the security measures outlined in certified members’ security profiles and periodic self-assessments are reliable, accurate, and effective. In the validation process, CBP staff meet with company representatives to verify the supply chain security measures contained in the company’s security profile. The validation process is designed to include visits to the company’s domestic and, potentially, foreign sites. The member and CBP jointly determine which elements of the member’s supply chain measures will be validated, as well as which locations will be visited. Upon completion of the validation process, CBP prepares a final validation report it presents to the company that identifies any areas that need improvement and suggested corrective actions, as well as a determination if program benefits are still warranted for the member. Announced in January 2002, the CSI program was implemented to allow CBP officials to target containers at foreign seaports so that any high-risk containers may be inspected prior to their departure for U.S. destinations. Strategic objectives for the CSI program include (1) pushing the United States’ zone of security beyond its physical borders to deter and combat the threat of terrorism; (2) targeting shipments for potential terrorists and terrorist weapons, through advanced and enhanced information and intelligence collection and analysis, and preventing those shipments from entering the United States; (3) enhancing homeland and border security while facilitating growth and economic development within the international trade community; and (4) utilizing available technologies to leverage resources and to conduct examinations of all containers posing a high risk for terrorist-related activity. To participate in the CSI program, a host nation must utilize (1) a seaport that has regular, direct, and substantial container traffic to ports in the United States; (2) customs staff with the authority and capability to inspect cargo originating in or transiting through its country; and (3) nonintrusive inspection equipment. In addition, a host nation must meet several operational criteria, including a commitment to establishing an automated risk management system. To implement the CSI program, CBP negotiates and enters into bilateral arrangements with foreign governments, specifying the placement of CBP officials at foreign ports and the exchange of information between CBP and foreign customs administrations. CBP first solicited the participation of the 20 foreign ports that shipped the highest volume of ocean containers to the United States. These top 20 ports are located in 14 countries and regions and shipped a total of 66 percent of all containers that arrived in U.S. seaports in 2001. CBP has since expanded CSI to strategic ports, which may ship lesser amounts of cargo to the United States but may also have terrorism or geographical concerns. As shown in table 1, as of February 2005, CSI was operational at 34 ports, located in 17 countries or regions. For fiscal year 2005, the CSI budget was about $126 million, with a budget of about $139 million requested in fiscal year 2006. CBP then deploys a CSI team, which generally consists of three types of officials—targeters, intelligence analysts, and special agents. These officials come from either CBP or U.S. Immigration and Customs Enforcement (ICE). The team leader is a CBP officer or targeter who is assigned to serve as the immediate supervisor for all CSI team members and is responsible for coordinating with host government counterparts in the day-to-day operations. The targeters are team members responsible for targeting shipments and referring those shipments they determine are high-risk to host government officials for inspection. The targeter may also observe inspections of containers. The intelligence analyst is responsible for gathering information to support targeters in their efforts to target containers.