A Report Card on DHS Security Policies, Standards and Programs
Part 4 of 5: a look at CBP’s In-bond standard; and the Science and Technology Directorate CSD standard. By Dr. Jim Giermanski, Chairman of Powers Global Holdings, Inc. and President of Powers International, LLC, an international transportation security company.
– Jason P. Ahern, Acting Commissioner, Customs and Border Protection
Although the introductory quotation of J. Ahern represents just one issue of this country’s treatment of container security, it is based on the standards against which Ahern and others in DHS form their conclusions. It is not the issue of only standards that influence their decisions, laws and policies are equally important. In the case of container security, Ahern’s statement demonstrates the lack of knowledge of container and cargo security technology and practice that relates directly back to standards established by DHS. If one looks seriously at the claimed standards of technology and/or practices of Congress, the Department of Homeland Security (DHS), and Customs and Border Protection (CBP) in the global container and cargo security arena, it becomes obvious that the standards and practices to which they adhere are either unsupportable scientifically, or practically, or at best, weak in light of standards in the rest of the world. Of course, this is easy to say. Therefore, to be reasonable, honest, and convincing, it is necessary to treat with specificity examples of laws, standards, programs or practices of Congress, CBP or DHS. My analysis will examine only eight standards or criteria against which security decisions are made:
• CBP’s False Positive Standard;
• Legislation on 100% Scanning;
• CBP’s Container Management Standard;
• CSI and The 24-hours Manifest;
• Sealed-Door Standard;
• RFID Standard;
• In-bond standard; and the
• Science and Technology Directorate CSD standard.
7. In-bond or In-Transit Model
In-bond shipments to and within the United States are shipments not intended to enter the commerce of the United States and, thus, do not bear the requirement of payment of the appropriate import duties and taxes required under the law. To ensure the U.S. collects its duties in case an in-bond shipment does enter the commerce of the United States, U.S. Customs (Customs and Border Protection, or CBP) requires the posting of an import bond as security to guarantee payment. Bonded cargo is carried in sealed containers or trailers. Ordinarily, these conveyances with their cargo have a final destination outside the United States, but can transit through the United States to a border port of export or to a U.S. seaport for export. In-bonds also could have a temporary destination in the United States but not technically in the Customs territory of the United States, destinations like Foreign Trade Zones, or bonded warehouses.
The focus of CBP is on the identification of contents with respect to their value in the case of an “ad valorem” assessment of duty or their weight or size if it is a “specific” tariff. In effect, CBP is fundamentally concerned with tax collection, and thwarting the escape and evasion of taxes through smuggling operations. This was evidenced by CBP’s March 3, 2008 announcement of seizing more than $67 million dollars worth of clothing illegally brought to the United States via the in-bond system. The shipment was supposed to transit through the U.S. Southwest to a Mexican destination. “This is a significant example of yet another attempt to evade the U.S. textile trade laws,” said Kevin Weeks, CBP director of field operations in Los Angeles.
Unfortunately for us, this CBP model or standard emphasizes revenue collection, not security. We have today, thousands of sealed containers from foreign shippers moving on our highways, at hundreds of foreign trade zones and bonded warehouses, and in motor carriers’ bonded distribution sites in the middle of cities and population concentrations like Yellow-Roadways distribution center in Charlotte, North Carolina. Regrettably, we don’t really know what these conveyances contain! We only know, as with the 24-hr. manifest, what they are said to contain. We also don’t know where they have been or what could have been placed in them at foreign transshipment ports or while in transit within the United States.
Following an investigation by the Government Accountability Office (GAO) that agency stated in its Report GAO GAO-07-561 of May 17, 2007: The limited information available on in-bond cargo also impedes CBP efforts to manage security risks and ensure proper targeting of inspections. In-bond goods transit the United States with a security score based on manifest information and do not use more accurate and detailed entry type information to re-score until and unless the cargo enters U.S. commerce. As a result, some higher risk cargo may not be identified for inspection, and scarce inspection resources may be used for some lower risk cargo.
There is no obvious excuse except the lack of knowledge or virtual incompetence of CBP’s leadership that can be blamed for the present in-bond situation. The consequence is that CBP has not been able to improve our security by solving the in-bond problem. Both shallow knowledge and questionable leadership must be assumed. Even Mexico has recently implemented legislation to monitor arrival and departure, container location, length of stops, and access to the container or trailer while transiting Mexico.
8. Container Security Devices (CSDs) and the Science and Technology Directorate (S&T)
My final example of DHS activity that is quite believable in light of what has been said so far is an example of an absolute waste and abuse of our taxes: the Science & Technology Directorate. One of the functions of the Science & Technology Directorate is to develop CSDs. S&T began this process in 2006. To date, it has not developed anything that can be used today as a container security device. However, the private sector, on its own, has! Because of what appeared to be DHS being out of touch with the reality of container security and the private sectors’ advancement in this area, in September, 2009, DHS was requested to respond to 4 questions by a member of the U.S. House of Representatives. I think it’s best to use the actual question and response from DHS to highlight the failure of S&T in developing a container security device, as follows:
1. How much money has DHS spent since 2003 in creating CSDs, including the evaluation and development phases?
DHS S&T began developing Container Security Device (CSD) technology in 2006 in response to a requirement from CBP. The numbers reported below for CSD development, testing and evaluation are approximate as work (primarily T&E) for the CSD the Advanced Container Security Device technologies were funded via a single contract and conducted in tandem.
(a.) FY06: $3.9M
(b.) FY07: $1.9M
(c.) FY08: $1.9M
(d.) FY09: $2.0M
Total Obligated to Date: $9.7M
2. Have manufacturers received funding for the creation of CSDs?
Yes. DHS S&T is funding two vendors to develop CSDs, Georgia Tech Research Institute and Science Applications International Corporation.
3. Have the products used been found viable from these efforts?
Yes, DHS S&T believes that at least one vendor will meet the performance requirements set forth by CBP. DHS S&T will deliver Open Performance Standards to CBP in Nov-Dec 2010 that will define the performance and operational characteristics for approved CSD technology.
4. Have any of these products been deployed by the private sectors?
Not yet.
I applaud them on their honesty. It is quite clear that they have, so far, failed even with a $9.7 million dollar budget for this development. And assuming that they would have succeeded, we would likely have only a sophisticated (one hopes) door lock.
What is profoundly incredible is that DHS does not know that the world already has forms of CSDs that do more. Industry has already developed and is using containers that detect entry through any portion of it, report it automatically by satellite or satellite/cellular technology. Therefore, the containers talk and respond to a central control center and can send alerts of all types including radiation detection, etc. to whomever is set up to receive those messages. These containers also provide a literal chain-of-custody feature from stuffing at foreign origin with the identity of the person accountable for supervising and verifying the cargo sent to the authorized, identified, accountable person opening and verifying the cargo at destination.
And all of this not only exists but is being demonstrated in Europe and Asia and soon in South Africa, but particularly here on the Mexican border where it is being used today. Unfortunately, there is ignorance of the technological specifications of these technologies within DHS and CBP. Additionally, the engineering tests of the units actually operating in Europe have been found to be 100% effective and accurate.
Unlike the Department of Defense, homeland security has no industrial complex to develop its technology. It seems industry has done this for them free. Smart containers as they exist today, not only provide the security DHS can’t seem to develop, but also make the supply chain visible and cheaper, making money for the user. It so happens to also provides security for the nations employing their use, including the United States. So what did we get for $9.7 million dollars?
NEXT WEEK: Conclusion and Final Grades for all 8 performance categories (fully footnoted).
LAST WEEK – Part Three; CBP’s Sealed-Door Standard and the RFID Standard.
SECOND WEEK – Part Two; CBP’s Container Management Standard; and CSI and The 24-hours Manifest.
FIRST WEEK – Part One; CBP’s False Positive Standard, and Legislation on 100% Scanning.
• About Dr. Giermanski:
Dr. Giermanski is the Chairman of Powers Global Holdings, Inc. and President of Powers International, LLC, an international transportation security company. He served as Regents Professor at Texas A&M International University, and as an adjunct graduate faculty member at the University of North Carolina at Charlotte. He was Director of Transportation and Logistics Studies, Center for the Study of Western Hemispheric Trade at Texas A&M International University.
Dr. Giermanski is co-inventor of a patent issued in the U.S. and in 32 other countries connected to transport container security. He is a recognized expert in global supply chain and container security by the World Bank and the World Customs Organization (WCO). He has frequently given invited testimony on NAFTA, transportation, and other international business issues before the U.S. Senate and House, the Texas Senate and House, EPA, and the U.S. International Trade Commission. He served as the co-chairman of the Texas Transportation Committee of the Task Force to prepare for NAFTA, sat for 5 years on the Texas Office of the Attorney General’s Trans-border Trucking International Working Group, and for three years as a member of the Research Advisory Committee on Management and Policy, Technical Advisory Panel, Texas Department of Transportation. He consults on international transportation and transportation security, border logistics, and trade matters involving Mexico, and has served as a border expert to assist the Arizona Department of Transportation in developing concepts and practices to improve the border crossing activities on the Arizona-Mexico border. And at the request of the White House, Council of Economic Advisors, he provided insight on trade issues and barriers on the southern border.
He has authored over 130 articles, books, and monographs with most focusing on container and supply chain security, international transportation and trade issues and for five years wrote the International Insight column in Logistics Management. He has appeared nationally as a special guest on the FOX News Channel’s Special Report with Brit Hume, CNN, NBC, CBS, NPR, BBC, Voice of America and the Canadian Broadcasting Corporation in addition to many local and regional affiliates.
Finally, with his background as a former FBI special agent, OSI special agent and a Colonel in the Office of Special Investigations where he handled counterintelligence matters, He currently provides transportation security lectures on C-TPAT, and other Customs and Border Protection (CBP) programs.
Dr. Giermanski has a Masters degree from the University of North Carolina in Charlotte, a Masters from Florida International University, and a Doctorate from the University of Miami. He is a graduate of Air Command and Staff College, and The Air War College. And while serving as a visiting scholar at the Center of Aerospace Doctrine, Research, and Education, (CADRE), an Air Force think tank, he wrote a book on the counterintelligence training of Air Force Office of Special Investigation Special Agents which was published by the Department of Defense.