CBP and Foreign Customs Administrations Have Jointly Developed Global Customs Security Standards and Initiatives and Work Cooperatively to Implement These Standards Worldwide

Working through the WCO and in cooperation with the international  customs community, CBP has taken a lead role in the development of  international standards in customs security practices and in customs-to- business partnership programs. To that end, CBP has taken a lead role in working with  foreign customs administrations, through the WCO, to establish the  framework of international standards designed to enhance the security of  the global supply chain while facilitating international trade. In June 2005,  the 173 member customs administrations of the WCO adopted the SAFE  Framework. Further, as of June 2008, 154 WCO member countries,  including the United States, had signed letters of intent for implementing  the SAFE Framework (see fig. Finally, CBP engages in activities to assist in the  development of a system of mutual recognition, such as pilot programs,  and in June 2007, CBP signed a mutual recognition arrangement with New  Zealand—the first ever such arrangement in the world—to recognize each  other’s customs-to-business partnership programs. CBP and International Organizations Have Defined Different Types of Mutual Recognition

CBP has worked with the international customs community to develop  and implement the SAFE Framework, a set of international customs  standards that calls for a system of mutual recognition, which the CBP and  the WCO define as the arrangement whereby the actions or decisions  taken by the customs administration of one country are recognized and  accepted by the administration of another. According to  officials from the European Commission and other European customs  officials, with the establishment of these common security practices, a  state of mutual recognition of customs controls between the European  Union and the United States would exist, and there would no longer be a  need to have CBP personnel stationed at European seaports as part of the  CSI program. CBP later signed mutual  recognition arrangements with Jordan and Canada in June 2008. While Working to Internationalize Customs Security Standards, CBP and International Partners Report Challenges in Balancing These Efforts with Other Legal Requirements

CBP has been actively engaged in the development and implementation of  international customs security standards; however, recent laws requiring  100 percent scanning of U.S.-bound container cargo at foreign seaports  may affect worldwide adoption of these standards. The act requires by 2012 100 percent scanning of all U.S.-bound  container cargo using nonintrusive inspection equipment, including  imaging equipment, which may use X-rays or gamma rays to create images  of the containers’ contents and radiation detection equipment at foreign  seaports. Given this situation, officials from the European  Commission and CBP stated that unless additional resources are made  available, 100 percent scanning could not be accomplished. According to a  senior WCO official, under the current risk-management system, customs  officers review the scanned images of high-risk containers in a very  thorough and detailed manner. Further, a  European customs administration official reported that 100 percent  scanning could have a negative impact on the flow of international  commerce, which under the 9/11 Act may be grounds for granting a 2-year,  renewable extension to the 100 percent scanning requirement at individual  seaports. The Department of  Homeland Security provided technical comments, which we incorporated  in this report where appropriate. Key contributors to this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

	Objectives

In response to a request from the Chairman and Vice Chairman, Senate  Committee on Commerce, Science, and Transportation; the Chairman and  Ranking Member, Senate Committee on Homeland Security and  Governmental Affairs; the Chairman and Ranking Member, Permanent  Subcommittee on Investigations of the Senate Committee on Homeland  Security and Governmental Affairs; and the Chairman, House Committee  on Energy and Commerce, we reviewed U.S. Customs and Border  Protection’s (CBP) programs—the Container Security Initiative (CSI)  program and the Customs-Trade Partnership Against Terrorism (C-TPAT)  program—and CBP’s efforts to promote international supply chain  security standards. What actions has CBP taken with international partners to achieve  mutual recognition of customs security practices? What issues do CBP and foreign customs administrations working to  internationalize customs security standards anticipate in implementing  100 percent scanning of U.S.-bound container cargo? Related GAO Products

Supply Chain Security: Challenges to Scanning 100 Percent of U.S.- Bound Cargo Containers. GAO-08-533T. GAO-08-187. GAO-08-171T. GAO-08-86T.
Why GAO Did This Study

Oceangoing cargo containers play a vital role in global trade but can also pose a risk of terrorist exploitation. U.S. Customs and Border Protection (CBP), part of the Department of Homeland Security (DHS), oversees security of the supply chain--the flow of goods from manufacturer to retailer. CBP anticipates that adoption of uniform, international customs security standards could eventually lead to a system of mutual recognition whereby the customs security-related practices and programs taken by one customs administration are recognized and accepted by another administration. In response to congressional requesters, GAO determined (1) actions CBP has taken to develop and implement international supply chain security standards, (2) actions CBP has taken with international partners to achieve mutual recognition of customs security practices, and (3) issues CBP and foreign customs administrations anticipate in implementing 100 percent scanning of U.S.-bound container cargo. To conduct its work, GAO analyzed CBP documents on supply chain security programs and international cooperation initiatives and met with CBP officials and foreign customs officials from various trading partner nations. Also, GAO drew upon its related reports and testimony on supply chain security issued earlier this year-- GAO-08-187 (Jan. 25), GAO-08-240 (Apr. 25), and GAO-08-533T (June 12). DHS provided technical comments on a draft of this report, which GAO incorporated where appropriate.

What GAO Found

To develop and implement international supply chain security standards, CBP has taken a lead role in working with foreign customs administrations and the World Customs Organization (WCO). Through the Container Security Initiative (CSI), CBP places staff at foreign seaports to work with host nation customs officials to identify high-risk container cargo bound for the United States, and through the Customs-Trade Partnership Against Terrorism (C-TPAT), CBP forms voluntary partnerships to enhance security measures with international businesses involved in oceangoing trade with the United States. In collaboration with 11 other members of the WCO, CBP developed the Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework), which is based in part on the core concepts of the CSI and C-TPAT programs and provides standards for collaboration among customs administrations and entities participating in the supply chain. The SAFE Framework was adopted by the 173 WCO member customs administrations in June 2005; and as of July 2008 154 had signed letters of intent to implement the standards. CBP has actively engaged with international partners to define and achieve mutual recognition of customs security practices. Broadly, for example, CBP contributed to development of the SAFE Framework, which calls for a system of mutual recognition. More specifically, in June 2007, CBP signed a mutual recognition arrangement with New Zealand--the first such arrangement in the world--to recognize each other's customs-to-business partnership programs. Furthermore, in June of this year, CBP signed mutual recognition agreements with Jordan and Canada. By early 2009, CBP anticipates obtaining a mutual recognition agreement with the European Commission, which represents the 27 member nations of the European Union. CBP actively engages in the implementation of international customs security standards, however recent law, such as The Implementing Recommendations of the 9/11 Commission Act of 2007 (9/11 Act) requiring that 100 percent of U.S.-bound container cargo be scanned at foreign seaports--using a nonintrusive inspection process involving equipment such as X-rays and radiation detection equipment--may affect worldwide adoption of international supply chain security standards. CBP and some foreign partners have stated that unless additional resources are made available, 100 percent scanning could not be met. Given limited resources, CBP and European custom administration officials said that 100 percent scanning may provide a lower level of security if customs officers are diverted from focusing on high-risk container cargo. Under the current risk-management system, for example, the scanned images of high-risk containers are to be reviewed in a very detailed manner. However, according to WCO and industry officials, if all containers are to be scanned, the reviews may not be as thorough. Further, a European customs administration reported that 100 percent scanning could have a negative impact on the flow of commerce and also would affect trade with developing countries disproportionately.