| LEGISLATIVE AND REGULATORY
RESPONSES TO TERRORISM IN THE UNITED STATES OF AMERICA By John P. Vayda |
The maritime industry is at the forefront of globalization. Indeed, globalization is carried in the holds of the ships with which we deal every day. The events of September 11, likely its genesis and possibly the reaction to it, are all anti-globalization forces.
The United States legislative reaction to September 11 has been enormous in many senses. The sheer number of statutes passed is huge. The number of issues with which the legislation deals, its sweep and scope are equally enormous. This, without any doubt, has created and will in the future create a range of problems from minor frustrations to seemingly insoluble issues. Luckily, the problems which have arisen to date are on the minor end of the scale. I suspect that the larger problems remain to be identified. Regardless, I believe that two important issues must be borne in mind.
1. First, these laws and rules are well intended and necessary in order to eliminate problems which were unidentified before September 11; and
2. The free flow of international commerce cannot be lost to the security procedures thereby necessitated.
The purpose of this paper is to outline the post-September 11 anti-terrorism laws and procedures which have been developed in the United States and govern the maritime industry. Hopefully, we can minimize the frustrations and complexities of these statutes and regulations and ensure that their purpose can be efficiently accomplished.
The anti-terrorism legislation consists of many, many statutes with many subparts. This paper will focus just on those aspects of five of those statutes (and their enabling regulations) which impact the maritime industry.
The Homeland Security Act[1] is essentially legislation designed to rearrange the federal bureaucracy so that it is more focused on terrorism. It created the Department of Homeland Security (“DHS”) with a Secretary of Homeland Security,[2] currently Tom Ridge, as a new Cabinet level position. DHS is responsible for protecting the movement of international trade across United States borders and for identifying and preventing security threats before they come to United States ports.[3] The structure of DHS and the rearrangement of the various agencies within the various departments in order to constitute DHS, is set out in Appendix I and II.
The great majority of the maritime related legislative responses to the terrorist activities of September 11 have been drawn together in the Maritime Transportation Security Act of 2002[4] (“MTSA”). In turn, the anti-terrorism portions of MTSA are contained within its “port security” section[5] though MTSA contains approximately fifty additional pages of legislation.
As with most United States legislation which creates entirely new statutory regimes, MTSA simply creates a framework which is to be fleshed out through regulations which are later written and implemented by the governmental department and agency having jurisdiction in the area. In the case of MTSA, this focuses on the Department of Homeland Security and in turn the Coast Guard though to a lesser degree, the Departments of Treasury and Commerce. Issuance of rules and regulations is a detailed process which is itself governed by statute.[6] Normally, the affected Department will issue a Notice of Proposed Rule Making (“NPRM”) together with a request for comments and scheduled hearing dates. After comments are received and published and hearings held, the proposed rule may be redrafted and republished and, in most circumstances, the proposed rule as revised only becomes effective on an appointed future date. However, because of the perceived urgency of this legislation, MTSA specifically required publication as soon as practicable of an immediately effective interim rule, without regard to the procedures of the Administrative Procedure Act.[7] Seven sets of those interim rules were issued on July 1, 2003 by the Coast Guard, DHS and are effective through November 25, 2003.[8] They will be discussed further below as they expand the corresponding MTSA provisions.
The Port Security features of MTSA are sweeping and apply to any “facility” or vessel as well as “any person owning, operating or chartering by demise such vessel.”[9] Like other legislation, such as the Oil Pollution Act of 1990, there is no attempt made to define “operate” which may conceivably include a voyage charterer, a pool operator/manager as well as a commercial operator/manager. MTSA revolves around the new phrase “transportation security incident” which is defined to mean a “security incident resulting in a significant loss of life, environmental damage, transportation system disruption or economic disruption in a particular area.”[10] This definition is significant and sweeping as it includes environmental damage as well as economic losses.
MTSA requires the Secretary to conduct an assessment of vessel types and United States facilities that pose a high risk of being involved in a transportation security incident.[11] As of July 1, United States Coast Guard reports that preliminary assessments have been completed at 55 crucial ports. Thereafter, a detailed vulnerability assessment is to be conducted of both the 5,000 facilities and 10,000 plus vessels which may be involved in a transportation security incident.[12] As of July 1, the Coast Guard reports it “is developing an assessment tool.”[13] Upon the completion of that assessment, a copy is to be provided to the vessel or facility owner or operator.[14] That information is, presumably, to be utilized by the vessel or facility owner or operator in its own security plan.
MTSA mandates creation of four separate types of security plans which apply on the National, Area and Vessel/Facility levels.[15]
The National Security Plan requires development of a system of surveillance and notice to safeguard against a transportation security incident and the imminent threat of such a security incident. Of more immediate importance to the maritime industry is the requirement that the
National Security Plan include “a recognition of certified systems of intermodal transportation”[16] as well as a plan to ensure “that the flow of cargo through United States ports is reestablished as efficiently and quickly as possible after a transportation security incident.”[17]
The Area Maritime Security Plan should be “adequate to deter a transportation security incident in or near the area to the maximum extend practicable.”[18] The July 1 Coast Guard Interim Rules (“IR”) provide that Area Maritime Security (“AMS”) means an “analysis that examines and evaluates the infrastructure and operations of a port taking into account possible threats, vulnerabilities, and existing protective measures, procedures and operations”.[19] The IR applies to all vessels and facilities “located in, on, under, or adjacent to waters subject to the jurisdiction of the U.S.”[20] The Coast Guard, Captain of the Port is designated as the federal maritime security coordinator whose responsibility it is to establish an AMS committee. The AMS committee must be composed of not less than 7 members, each having at least 5 years of experience related to maritime or port security operations. The AMS committee shall have the following responsibilities:[21]
1. Identify critical port infrastructure and operations;
2. Identify risks;
3. Determine mitigation strategies;
4. Continually evaluate overall port security; and
5. Provide advice to and assist the Captain of the Port in developing the AMS or port security plan.
The IR also direct the AMS committee to ensure development of a risk based AMS assessment as the first important step in developing an AMS or port security plan. The essential elements of an AMS assessment and the skills and knowledge that persons conducting an AMS assessment must possess are listed in the IR. The IR identifies the process of evaluation that must be performed in the course of conducting an AMS assessment including identification of activities or operations critical to the port areas including a threat assessment; a consequence and vulnerability assessment; a categorization of each target/scenario combination; and measures that will be implemented at all marine security levels.
The IR require the Captain of the Port to develop an AMS plan in consultation with the AMS committee. The core elements of the AMS plan include:[22]
1. Details of operational and physical measures that must be in place at all Marine Security (“MARSEC”) Levels;
2. Expected time frames for responding to security threats and changes of MARSEC Levels;
3. Communication procedures;
4. Measures to ensure the security of vessels, facilities and operations that are not covered by the security requirements;
5. Measures to ensure the security of the information in the AMS plan;
6. Periodic review, audit and updating procedures, and
7. Procedures for reporting security incidents.
These requirements are consistent with the elements of a “port facility security plan” established in the ISPS Code.
MTSA provides that security plans must be prepared and submitted to the Secretary of Homeland Security for his approval by an owner or operator of a vessel or facility[23] “for deterring a transportation security incident to the maximum extent practicable”[24] within six months after interim final regulations are issued. The facility or vessel cannot operate one year thereafter unless the plan has been approved by the Secretary of Homeland Security and the vessel is operating in compliance with the Plan.[25] The IR were issued on July 1, 2003 so that the submission date is January 1, 2004 and the compliance date is July 1, 2004.
The IR apply to the owner or operator of any United States facility that handles hazardous materials and dangerous cargo, such as LNG or transfers oil or hazardous material in bulk; receives vessels certified to carry more than 150 passengers; and that receives vessels on international voyages, including vessels solely navigating the Great Lakes.[26]
The IR require the facility owner or operator to complete a facility security assessment, which is an integral part of the process of developing and updating the required facility security plan (“FSP”).[27] The FSP must incorporate the result of the required facility security assessment and consider recommended measures appropriate to each facility. The plans must contain various security measures and procedures for responding to security threats. The FSP, including
the facility security assessment, must be submitted to the Captain of the Port for approval. The security plans must be reviewed by the Coast Guard every time the facility security assessment is altered or failures are identified during an exercise of the facility security plan or there is a change in ownership or operational control of the facility. A FSP that is approved is valid for 5 years from the date it is approved.
Each facility owner or operator is required to develop a “FSP” that incorporates detailed preparation, prevention and response activity for each MARSEC Level. Facility owner or operator responsibilities include:[28]
1. Designating a facility security officer (“FSO”);
2. Insuring that a facility security assessment is conducted;
3. Developing and submitting a facility security plan for approval;
4. Operating the facility in accordance with the approved facility security plan;
5. Implementing additional security measures required by changes in MARSEC Level;
6. Reporting all breaches of security and security incidents; and
7. Coordinating shore leave for vessel personnel or crew change, as well as access to the facility of visitors to the vessel including representatives of seafarers’ welfare and labor organizations in advance of a vessel’s arrival.
The FSO must have general knowledge on a range of issues such as security, administration, relevant international laws, domestic regulations, current security threats and patterns, risk assessment methodology, inspections, and control procedures in conducting audits.[29] The most important duties that must be performed by the FSO are implementing the FSP. The FSO is also required to ensure that facility security persons possess necessary training to maintain the overall security of the facility. Exercises are required to ensure the adequacy of the FSP and are required to be conducted at least once each calendar year with no more than 18 months between exercises. Security measures for specific activities must be scalable in order to provide increasing levels of security at increasing MARSEC Levels.
Each facility owner must also develop security incident procedures for responding to transportation security incidents.[30] The security incident procedures must explain the facility’s reaction to an emergency, including the notification and coordination with local, state and federal authorities and under Secretary of Emergency Preparedness and Response. The security incident procedures must explain actions for securing the facility and evacuating personnel, as well as actions for securing vessels moored to the facility and evacuating passengers and crew.
A Declaration of Security (“DOS”) is a written agreement between the facility and a vessel that provides a means for ensuring that critical security concerns are properly addressed prior to and during a vessel to facility interface. The DOS addresses security by delineating responsibilities for security arrangements and procedures within a vessel and facility. Only certain passenger vessels and vessels carrying certain dangerous cargoes in bulk will complete a DOS for every port call regardless of the MARSEC Level. At MARSEC Levels 2 and 3, all vessels and facilities will need to complete a DOS.[31]
The IR regulate the owners or operators of certain classes of vessels, in order to provide greater security to those vessels and to other vessels or ports at which those vessels call. Importantly, the IR attempt to integrate all of the port security requirements of MTSA such as the vessel security plan, with the International Ship and Port Facility Security Code (“ISPS”). Therefore, foreign flag vessels that have onboard a valid International Ship Security Certificate that attests to the vessel’s compliance with SOLAS and the ISPS Code will be deemed in compliance with the IR.[32] The Coast Guard will verify that foreign SOLAS vessels have an approved VSP that fully complies with SOLAS and the ISPS Code, and thereby meets the requirements of the IR through an aggressive port state control program. Non-compliance with the IR could subject the vessel to denial of entry into port. Regardless, in certain cases foreign vessels will be required to submit the vessel security plan to the United States for approval. Generally, these vessels fall into three categories:[33]
1. A commercial vessel meeting the applicability standards of the IR from a nation not signatory to SOLAS:
2. Commercial vessels meeting the applicability standards of the IR and which are not governed by SOLAS because they do not meet the tonnage or rate thresholds; and
3. Canadian commercial vessels of greater than 100 GRT or more than 12 passengers operating solely on the Great Lakes.
The IR require all vessels to conduct a vessel security assessment (“VSA”), which is an essential and integral part of the process for developing and updating the required vessel security plan (“VSP”).[34] The VSA identifies and evaluates in writing existing security measures; the likelihood of possible threats to key vessels’ operations and weaknesses, including human factors in the infrastructure, policy and procedures of the vessel. The VSA must be reviewed and updated each time the VSP is revised and when the VSP is submitted for reapproval every five years.
The IR also require each vessel owner or operator to develop an effective VSP that incorporates detailed preparedness, prevention and response activities for each MARSEC Level. The VSP must be a document written in English that is prepared in response to the VSA and approved by the Coast Guard. A single VSP can apply to more than one vessel to the extent that they share physical characteristics and operations. In addition to other things, the VSP must:[35]
1. Respond specifically to any recommendation made by the VSA;
2. Describe how at each MARSEC Level the vessel will apply the security measures required in these regulations;
3. State the master’s authority;
4. Detail the organizational structure of security for the vessel;
5. Detail the duties and responsibilities of all vessel and company personnel with a security roll;
6. Detail the vessel’s relationship with the company, facilities, the vessel’s and relevant authorities with security responsibility;
7. Provide regular audit of the VSP; and
8. Establish procedures needed to assess the continuing effectiveness of security procedures and all security related equipment and systems, including procedures for identifying and responding to equipment or systems failure or malfunction.
The VSP, including the VSA, must be submitted to and reviewed by the Coast Guard Commanding Officer, Marine Safety Center (“MSC”). If MSC finds that the VSP does not meet its security requirements, the plans will be returned to the vessel with the disapproval letter with an explanation of why the plan does not meet the regulations. The Coast Guard must review the VSP every time the VSA is altered, a problem is identified during exercise of the VSP, there is a change in ownership or operational control of the vessel or there are amendments to the VSP.
The IR also require that each vessel owner or operator designate in writing a company security officer (“CSO”) for their fleet of vessels or for each individual vessel that is owned or operated by the company.[36] The CSO may be a full time or collateral position and may perform other duties within the owner’s or operator’s organization provided he or she is able to perform the duties and responsibilities required of the CSO. The CSO must have general knowledge in a range of issues such as company security organization, relevant international laws, domestic regulations, current security threats and patterns, risk assessment methodology and conducting audits, inspections and control procedures. The CSO may delegate his or her duties but remains responsible for the performance of those duties. The most important duties of the CSO include ensuring that:[37]
1. A vessel security assessment is conducted;
2. A vessel security plan is developed, approved, maintained and implemented;
3. Vessel security activities are audited and problems identified and addressed in a timely fashion;
4. Adequate security training is parallel; and
5. Communication and cooperation is maintained between the vessels and facilities.
The IR also require that a vessel security officer (“VSO”) is designated in writing for each vessel who must have a general knowledge similar to that of the CSO described above. The most important duties that must be performed by the VSO include:[38]
1. Implementing a vessel security plan;
2. Ensuring that adequate training is provided to vessel personnel;
3. Ensuring the vessel is operated in accordance with the plan; and
4. Periodically auditing and updating the vessel security assessment and the vessel security plan.
The VSO may assign security duties to other vessel personnel, however, he remains responsible for those duties. Vessel owners or operators must certify that security personnel are properly trained to perform their duties and the VSO is also required to ensure that vessel security persons possess necessary training to maintain the overall security of the facility.
Each vessel owner or operator must ensure procedures established for requesting a Declaration of Security (“DOS”) and for handling DOS requests from a facility or other vessel. Only certain passenger vessels and vessels carrying certain dangerous cargoes must complete a DOS for every call regardless of the MARSEC Level. At MARSEC Levels 2 and 3, all vessels and facilities must complete a DOS. Vessels that frequently call on the same facility may execute a continuing DOS – a single DOS for multiple visits.[39]
MTSA seeks to establish a method by which to ensure that only “authorized persons” are allowed access to “an area of a vessel or facility that is designated as a secure area.”[40] MTSA creates transportation security cards as the methodology to identify those individuals and regulate access.
A biometric transportation security card, more recently called Transportation Worker Identification Credential (“TWIC”), shall be issued to individuals within the following categories unless the Secretary of Homeland Security decides that a particular individual poses a security risk warranting denial of the card.
(A) an individual allowed unescorted assess to a secure area designated in a vessel or facility security plan approved under section 70103 of this title;
(B) an individual issued a license, certificate of registry, or merchant mariners document under part E of subtitle II of this title;
(C) a vessel pilot;
(D) an individual engaged on a towing vessel that pushes, pulls, or hauls alongside a tank vessel;
(E) an individual with access to security sensitive information as determined by the Secretary; and
(F) other individuals engaged in port security activities as determined by the Secretary.[41]
MTSA provides for creation of teams “as are needed to safeguard the public and protect vessels, harbors, ports, facilities and cargo … from destruction, loss or injury from crime, or sabotage due to terrorist activity.”[42]
MTSA provides funding to “port authorities, facility operators and state and local agencies for up to 75% of projects costing more than $25,000.[43] Of particular note, MTSA does NOT provide any funding to vessel owners or their operators. This failure has been harshly
criticized, particularly as parallel owners and operators in the airline industry have been heavily subsidized both in their implementation of security plans as well as for their economic losses. To some extent, this gap can be overcome by a vessel owner or operator through a contract with a facility operator entitled to a “grant” for the security measures required by a vessel security plan.[44]
MTSA provides a sweeping and somewhat troubling series of provisions designed to impose United States safety criteria on foreign ports. Specifically, the Secretary of Homeland Security “shall access the effectiveness of the anti-terrorism measures maintained at foreign ports.”[45] In carrying out that assessment, the Secretary shall consult with the Secretaries of Defense and State with respect to the terrorist threat that exists in each country involved and to identify foreign ports that pose a high risk of introducing terrorism to international commerce. The Secretary shall then assess the effectiveness of:
(1) screening of containerized and other cargo and baggage;
(2) security measures to restrict access to cargo, vessels, and dockside property to authorized personnel only;
(3) additional security on board vessels;
(4) licensing or certification of compliance with appropriate security standards;
(5) the security management program of the foreign port; and
(6) other appropriate measures to deter terrorism against the United States.[46]
Additionally, the Secretary shall consult with both appropriate authorities of foreign governments and operators of vessels.[47] Curiously MTSA excludes “owners” of vessels from this consultative process.
If the Secretary after conducting such an assessment finds that a port in a foreign country does not maintain effective anti-terrorism measures, the Secretary shall notify the appropriate authorities of the government of the foreign country of the finding and recommend the steps necessary to improve the anti-terrorism measures in use at that port. In addition, the Secretary of Homeland Security, in cooperation with the Secretary of State, shall operate a port security training program for ports in those foreign countries which are found to lack effective anti-terrorism measures.[48]
The Secretary of Homeland Security can impose sanctions up to and including denying entry into the United States to any vessel arriving from or carrying cargo or passengers originating from or transshipped through a port which the Secretary of Homeland Security has found not to maintain effective anti-terrorism measures.[49]
As of July 1, 2003 the Coast Guard states “We will deploy verification teams to ensure that 2,500 foreign ports have effective recruiting programs.”[50]
MTSA requires crew members “to carry and present on demand any identification that the Secretary decides is necessary” and to “establish the proper forms and processes that shall be used for identification.”[51]
MTSA requires the Secretary of Homeland Security to “implement a system to collect, integrate and analyze information concerning vessels operating on or bound for waters subject to the jurisdiction of the United States including information related to crew, passengers, cargo and intermodal shipments.”[52] Again, this is an extremely broad and sweeping mandate. The President’s fiscal year 2004 budget request to Congress includes $34 million for this purpose.
MTSA requires that the following vessels “shall be equipped with and operate an automatic identification system”.[53]
(A) A self-propelled commercial vessel of at least 65 feet overall in length.
(B) A vessel carrying more than a number of passengers for hire determined by the Secretary.
(C) A towing vessel of more than 26 feet overall in length and 600 horsepower.[54]
While automatic identification systems (“AIS”) have been mandated for vessels participating in a Vessel Traffic Service which uses AIS, MTSA dramatically increased the number of vessels now required to have AIS.
The Coast Guard, DHS issued an Interim Rule on July 1, 2003 to detail the AIS requirements.[55] Significantly, its intent is to “amend AIS standards to those adopted by the IMO and SOLAS and defined in the International Telecommunication Union Radiocommunication Bureau (“ITU-R”) Recommendation ITU-RM.1371-1 and International Electrotechnical Commission (“IEC”) IEC 61993-2.”[56] Vessels must comply with the new AIS rules on staggered dates dependent on the port. The first trigger date is December 31, 2003 within VTS St. Marys River. The trigger dates in the Interim Rule vary from those enacted in MTSA in order to meet the internationally agreed dates set out in SOLAS.
MTSA requires the Secretary of Homeland Security, in consultation with the Transportation Security Oversight Board, to “establish a program to evaluate and certify secure systems of international intermodal transportation”[57] which includes:
(1) establishing standards and procedures for screening and evaluating cargo prior to loading in a foreign port for shipment to the United States either directly or via a foreign port;
(2) establishing standards and procedures for securing cargo and monitoring that security while in transit;
(3) developing performance standards to enhance the physical security of shipping containers, including standards for seals and locks;
(4) establishing standards and procedures for allowing the United States Government to ensure and validate compliance with this program; and …[58]
This “program” remains in the developmental stage. But already, as of July 1, 2003, has component statutes and regulations (including some already implemented, others proposed and yet others still in the discussion phase) which are vessel specific and thus within the jurisdiction of the Coast Guard and other components which fall within the purview of the Bureau of Customs and Border Protection. All are primarily designed to increase scrutiny and security of both containers and passengers entering United States ports.
The Coast Guard issued a Final Rule governing the notification of arrival and departure of vessels bound for or departing from ports or places in the United States.[59] Under these rules, owners, agents, masters, operators or persons in charge of vessels bound for United States ports must file a Notice of Arrival (“NOA”) before departure or at least 96 hours before they enter the port. The NOA must include the vessel’s name, name of registered owner, country of registry, call sign, official number, vessel operator, name of charterer and classification society. The NOA must also include for each port of arrival the name of the receiving facility, the port or place of destination, date of departure from last port, that port’s name, a listing of all persons onboard (crew and passengers) with date of birth, nationality, and passport number. [60] Another key requirement is that the name and telephone number of a 24-hour point of contact for each United States port must be provided in the NOA.[61] The NOA required information was expanded by the Coast Guard’s July 31, 2003 Interim Rules. For example, vessels subject to SOLAS and ISPS Code will now be required to provide a statement that the vessel is in compliance with the ISPS Code, that they are implementing their VSP prior to entry into ports in the United States and informing the National Vessel Movement Center of the type and status of its International Ship Security Certificate.[62] Further, vessels which hold consecutive interim International Ship Security Certificates will be required to explain why the vessel holds a consecutive interim certificate as it is not the intent of the ISPS Code to allow for such certificates.[63]
The NOA for vessels carrying certain dangerous cargoes must also include the name, amount and stowage location of each dangerous cargo carried.[64] The definition of dangerous cargo is very broad and includes those cargoes that currently pose the greatest risk to maritime safety and security.[65]
All vessels are required to submit the NOA to the National Vessel Movement Center (“NVMC”) either by telephone, fax or e-mail at sans@nvmc.uscg.gov.[66] When the submitted NOA information changes, vessels must submit a notice of change as soon as practicable, but at least 24 hours before entering the port.[67]
The Enhanced Border Security and Visa Entry Reform Act of 2002[68] requires all commercial vessels transporting any person to or from the United States, before arrival at or departure from a port, to provide a manifest to a United States border officer at the port.[69] The manifest must contain, with respect to each passenger, crewmember or other occupant, his/her date of birth, citizenship, gender, passport number and country of issuance, country of residence where applicable, United States Visa number, date and place of issuance and where applicable alien registration number and address in the United States.[70] This information must, as of January 1, 2003, be submitted electronically.[71] The Act also provides for electronic sharing of that information within the various United States agencies.[72]
The purpose of this Rule[73] is to permit United States authorities to know what cargo is actually on board a vessel before the cargo is loaded. United States Customs has amended its regulations to require ocean carriers to present a vessel cargo manifest (declaration) no later than 24 hours before cargo that will arrive in the United States is loaded onboard a vessel at a foreign port. Prior to this new rule, a vessel was not required to provide a manifest to United States Customs until 48 hours before arrival at the vessel’s first United States port of call.[74] The new rule stipulates that manifests must be prepared and submitted for every cargo to be loaded aboard a United States bound vessel. This effectively means that an advance manifest must be prepared and submitted to United States Customs for each port of loading and must include not only cargo destined to the United States but also cargo remaining on board for subsequent discharge at a foreign port as well.[75] As part of this rule, seeking to “know” the cargo, generic cargo descriptions such as “STC” (said to contain) are forbidden. Customs has issued a Notice of Proposed Rulemaking which provides that ocean carriers must present their cargo declarations to Customs by means of an approved electronic data interchange system, “24 hours before the cargo is laden aboard the vessel at the foreign port.”[76] The current approved system for presenting electronic cargo declaration information to Customs is the Vessel Automated Manifest System.
The 24 hour rule also applies to non-vessel operating common carriers (“NVOCCs”). However, bulk cargoes are exempted from the advance declaration requirement.[77]
Failure to submit a cargo manifest at the proper time may result in prohibition of the cargo’s discharge in the United States.[78] Failure to provide a proper manifest could result as well in a maximum civil penalty of $5,000 for the first offense and $10,000 for subsequent offenses.[79] An NVOCC who fails to provide a proper manifest can be fined $5,000 per offense.[80]
The principal purpose of this act[81] was to restore trade/permission authority (formally known as fast-track authority) to the United States President and to accelerate the negotiation of trade agreements with Latin American trading partners. However, it includes almost all of the same “24-hour” provisions now included within the above-described 24-Hour Rule. For instance, it requires that all waterborne cargo be “properly documented”.[82] Cargo is considered “properly documented” if the shipper submits to the carrier or its agent a complete set of shipping documents no later than 24 hours after the cargo is delivered to the marine terminal operator and in no circumstances longer than 24 hours prior to the vessel’s departure.[83] Any cargo that is not “properly documented” and has remained in the marine terminal for more than 48 hours after delivery to the terminal shall be subject to search, seizure and forfeiture and the shipper will be liable for demurrage and any other charges.[84] The Trade Act of 2002 also requires that the shipper submit that document through an electronic interchange system.[85] It goes on to require creation of a joint task force to:
1) Establish standards and then a process for screening cargo prior to its crossing any United States border;
2) Establish a system to monitor cargo and make sure it is secure while in transit; and
3) Establish a program to ensure compliance with these security measures.[86]
The Container Security Initiative (CSI) is an initiative that was developed by United States Customs in the aftermath of the terrorist attacks of September 11.[87] Under the CSI program, a small number of Customs and Border Protection officers are deployed to work with host nation counterparts to target high-risk cargo containers. Its purpose is to protect containerized shipping from exploitation by terrorists. Containerized shipping is a critical component of global trade because most non-bulk or refrigerated international trade moves or is transported in containers.
To date, 18 of the largest 20 container ports have agreed to join CSI and are at various stages of implementation. These ports are points of passage for approximately two-thirds of containers shipped to the United States. They include (by container cargo volume): Hong Kong, Shanghai, Singapore, Rotterdam, Pusan, Bremerhaven, Tokyo, Genoa, Yantian, Antwerp, Nagoya, Le Havre, Hamburg, La Spezia, Felixstow, Algeciras, Kobe and Yokohama.
CSI consists of four core elements:
1. Using intelligence and automated information to identify and target high-risk containers;
2. Pre-screening those containers identified as high-risk, at the port of departure, before they arrive at United States ports;
3. Using detection technology to quickly pre-screen high-risk containers; and
4. Using smarter, tamper evident containers.
The CSI initiative supports the “Cooperative G8 Action on Transport Security” adopted by G8 in June 2002.
Phase 2 of CSI began with the expansion of CSI to additional ports. Most recently, the governments of Malaysia and Sweden have joined CSI. In Europe, CSI will be expanded to at least 11 additional ports.
To be eligible for this second phase of CSI a country’s customs administration must:
1. Be able to inspect cargo originating, or being transshipped through a country;
2. Have or be in the process of acquiring non-intrusive inspection equipment – large x-ray-type systems – and radiation detection equipment in order to conduct security; and
3. The seaport must have regular, direct, and substantial container traffic to ports in the United States.
The Customs Service has developed the Customs – Trade Partnership Against Terrorism (“C-TPAT”) as part of the “program” to ensure safety of cargo entering United States ports. Its purpose is to build cooperative relations between Customs and the business community to strengthen the overall supply chain and border security.[88] In essence, it asks the business community to implement security measures in exchange for a reduced number of inspections and thereby reduced border times. Businesses must apply to participate in the C-TPAT and take the following actions:
· Conduct a comprehensive self-assessment of supply chain security using the C-TPAT security guidelines jointly developed by Customs and the trade community. These guidelines, which are available for review on the Customs website, encompass the following areas: Procedural Security, Physical Security, Personnel Security, Education and Training, Access Controls, Manifest Procedures, and Conveyance Security.
· Submit a supply chain security profile questionnaire to Customs.
· Develop and implement a program to enhance security throughout the supply chain in accordance with C-TPAT guidelines.
· Communicate C-TPAT guidelines to other companies in the supply chain and work toward building the guidelines into relationships with these companies.
The C-TPAT security recommendations that may be used by the C-TPAT Validation Team in the initial phase of outside validation are available online at http://www.customs.ustreas.gov/ImageCache/cgov/content/import/commericial_5fenforcement/ctpat/validation_5fprocess/validation_5fprocess_5fguidelines_2epdf/v1/validation_5fprocess_5fguidelines.pdf.
The USA Patriot Act[89] expanded the federal government’s powers to conduct searches and surveillance, for example, by obtaining a “roving” tap on any standard phone, mobile phone, computer modem or other communication device a targeted individual uses,[90] as part of a criminal investigation. In general, the Act is not addressed to the shipping industry, but many of its provisions are broad enough potentially to have an impact on non-United States shipowners, charterers and cargo owners. For example, the Patriot Act creates a new crime of “harboring or concealing terrorists,” which is committed by, among other things, concealing a person one has reasonable grounds to believe has committed or is about to commit certain offenses, including violence against maritime navigation.[91] While the Act thus affords some protection for the shipping industry, it is also conceivable that United States law enforcement agents would demand to search ships for such persons, which may lead to significant delay, even in cases in which no such person was on board. The crime is punishable by a fine, up to 10 years in prison, or both.[92]
The Patriot Act also expands the scope of money-laundering laws. These laws require United States banks, when “reasonable grounds” exist to conclude that, among other things, a class of international financial transactions primarily serves a money-laundering purpose, to take measures that include record-keeping, reporting and identification requirements and restrictions on opening certain types of accounts.[93] Through a bank’s error, these requirements might be incorrectly imposed on a shipping company needing to move and manage large amounts of cash within the United States banking system.
Out of the same concern regarding money laundering, the Patriot Act also creates a new crime of “bulk cash smuggling.”[94] An individual commits this crime when, with the intent to evade a currency reporting requirement, that individual knowingly conceals more than $10,000 in currency or other monetary instruments on that individual’s person, or in any conveyance, article of luggage, merchandise or other container, and transports such currency across United States borders.[95] This law may similarly ensnare those in the shipping industry whose operations require moving cash in excess of $10,000.
Further, the Act provides for mandatory detention of suspected terrorists.[96] This provision could obviously wreak havoc on ship owners, charterers and cargo owners if United States law enforcement believed a suspected terrorist was among the crew of a ship they own, or have chartered or are using to ship their cargo.
This Act[97] brought the United States into compliance with two international anti-terrorist conventions that the United States had signed after the 1998 embassy bombings in Kenya and Tanzania. Title I makes it a crime to deliver, place, discharge or detonate, with the intent to cause death, serious bodily injury or extensive destruction where such destruction results in or is likely to result in major economic loss, an explosive or other lethal device in, among other things, a public transportation system.[98] “Public transportation system” means all “facilities, conveyances and instrumentalities, whether publicly or privately owned, that are used in or for publicly available services for the transportation of persons or cargo.”[99]
Title I provides for jurisdiction over such an offense if, among other things, the offense takes place in the United States and is committed on board a vessel flying the flag of another state or the perpetrator is a national of another state.[100] There is also jurisdiction if the offense occurs outside the United States and is committed on board a vessel flying the flag of the United States; if a victim is a United States national; if a perpetrator is found in the United States or if the act is committed in an attempt to compel the United States to do or abstain from doing any act.[101]
Title II of this Act makes it a crime to finance terrorism.[102] Specifically, it provides that whoever directly or indirectly unlawfully and willfully provides or collects funds with the intention that such funds be used, or with the knowledge that such funds are to be used, in full or in part, to carry out any terrorist act commits a crime.[103] It includes as a covered act any act intended to cause death or serious bodily injury to a civilian when the purpose of such act is, by its nature or context, to intimidate a population or to compel a government or international organization to do or abstain from any act.[104] It provides for jurisdiction over perpetrators who committed offenses abroad but are later found within the United States.[105]
This paper has dealt with five statutes and accompanying regulations designed to fight terrorism. A large range of maritime interests will be obviously impacted by these statutes and regulations. I suspect that significant implications will be felt, some for better and some for worse, in numerous less obvious areas including:
1. Conflict between environmental regulation and the threat of terrorism;
2. Conflict between personal liberty and the threat of terrorism;
3. Reduction of trade in illicit goods;
4. Reduction of forged and/or improper documentation;
5. Reduced delays because of improper documentation;
6. Reduced instances where Letters of Indemnity are requested/needed to cover documentation problems;
7. Reduction of money laundering;
8. Reduction of Just-in-Time Movements;
9. Inventory Growth; and
10. Increase in Vessel Owner Transparency.
I anticipate that, in addition, many unforeseen areas will be impacted. Some of those will have a profound negative impact on some interested group. Those will be the challenge. However, it should be recognized that the legislation is intended to make commerce safe for all. It should be our common goal to ensure that the path to ever-increased commerce remains unblocked and as free and open as possible in the new age of terrorism.
APPENDIX I
DEPARTMENT OF HOMELAND SECURITY
STRUCTURE
a. Transportation Security Administration
b. Customs Service
c. Part of Immigration and Naturalization Service that deals with border security
d. Animal and Plant Health Inspection Service
e. Federal Law Enforcement Training Center
APPENDIX II
HOW AGENCIES HAVE BEEN MOVED
UNDER THE HOMELAND SECURITY ACT
(most of the transfers made by March 1, 2003)
Coast Guard |
From Department of Transportation to DHS |
Secret Service |
From Treasury to DHS |
Citizenship and Immigration |
From INS to DHS |
Customs |
From Treasury to DHS, Directorate of BTS |
Immigration and Naturalization Service (“INS”) |
From Department of Justice (“DOJ”) to several places. Most of the INS will go to DHS. Within DHS, the INS’s border enforcement functions, including Border Patrol and investigative agents, will be separated from its immigration services functions, with border enforcement going to the Directorate of BTS, and immigration services going to the Bureau of Citizenship and Immigration Services. A director of shared services will oversee information sharing between the two branches. INS functions dealing with unaccompanied alien children from DOJ to Health and Human Services (“HHS”). |
Transportation Security Administration |
From Department of Transportation to DHS, Directorate of BTS |
Federal Law Enforcement Training Center |
From Treasury to DHS, Directorate of BTS |
Federal Protective Service |
General Services Administration to DHS, Directorate of BTS |
Animal and Plant Health Service |
From Agriculture to DHS, Directorate of BTS |
Plant Health Inspection Service |
From Agriculture to DHS, Directorate of BTS |
FEMA |
From an independent agency to DHS, Directorate of Emergency Preparedness & Response (“EP&R”) |
National Communications System |
From Department of Defense (“DOD”) to DHS, Directorate of EP&R |
Parts of Critical Infrastructure Assurance Office |
From Department of Commerce to DHS, Directorate of EP&R |
Strategic National Stockpile and the National Disaster Medical System |
From HHS to DHS, Directorate of EP&R |
Nuclear Incident Response Team |
From Department of Energy to DHS, Directorate of EP&R |
Domestic Energy Support Teams |
From Department of Energy to DHS, Directorate of EP&R |
National Domestic Preparedness Office |
From FBI to DHS, Directorate of EP&R |
Plum Island Animal Disease Center |
From Agriculture to DHS, Directorate of Science & Technology (“S&T”) |
CBRN Countermeasures Program |
From Department of Energy to DHS, Directorate of S&T |
Environmental Measurements Lab |
From Department of Energy to DHS, Directorate of S&T |
National BW Defense Analysis Center |
From DOD to DHS, Directorate of S&T |
Critical Infrastructure Assurance Office |
From DOD to DHS, Directorate of IAIP |
Federal Computer Incident Response Center |
From Government Services Administration to DHS, Directorate of IAIP |
National Communications System |
From DOD to DHS, Directorate of IAIP |
National Infrastructure Protection Center |
From FBI to DHS, Directorate of IAIP |
Energy Security & Assurance Program |
From Energy to DHS, Directorate of IAIP |
Office of Science and Technology of the National Institute of Justice |
Abolished. Replaced with a new Office of Science and Technology that is under DHS |
Parts of Bureau for Alcohol, Tobacco & Firearms |
Law enforcement and the regulatory responsibility relating to firearms and explosives transferred from Treasury to DOJ |
[1] PL 107-296, 116 Stat. 2135 et seq.
[2] Id. at §§ 101-102, 116 Stat. 2142.
[3] Id. at § 426, 116 Stat. 2186-87; www.dhs.gov/dhspublic/display?theme=9&content=858&print=true.
[4] PL 107-295, 116, Stat. 2064 et seq.
[5] Id. at § 102, codified at 46 U.S. Code § 70101 through 70117.
[6] Administrative Procedures Act, 5 U.S. Code Chapter 5.
[7] MTSA § 102(d)(1).
[8] 68 Federal Register 39,240 et seq. (2003) (to be codified at 33 C.F.R. subchapter H) (proposed July 1, 2003).
[9] 46 USC § 70101(4)(A).
[10] Id. at § 70101(6).
[11] Id. at § 70102(a).
[12] Id. at § 70102(b).
[13] “Protecting America’s Ports”, MTSA, Homeland Security.
[14] Id. at § 70102(2).
[15] 46 USC § 70103.
[16] Id. at § 70103(a)(2)(I).
[17] Id. at § 70103(a)(2)(J).
[18] Id. at § 70103(b)(2)(A).
[19] 68 Fed. Reg. 39,279 (2003).
[20] Id. at 39,290.
[21] Id. at 39,291.
[22] Id. at 39,292.
[23] Defined as “any person owning, operating or chartering by demise, such vessel.” Id. at § 70101(4)(A).
[24] § 70103(c)(1).
[25] Id. at § 70103(e)(5)(A), (B).
[26] 68 Fed. Reg. 39,323 (2003).
[27] Id. at 39,324.
[28] Id. at 39,324.
[29] Id.
[30] Id. at 39,329.
[31] 68 Fed. Reg. 39,326 (2003).
[32] Id. at 39,303.
[33] Id. at 39,297.
[34] Id. at 39,312.
[35] Id. at 39,312.
[36] Id. at 39,304.
[37] Id. at 39,305.
[38] Id.
[39] Id. at 39,307.
[40] Id. at § 70105(a)(1).
[41] Id. at § 70105(b)(2).
[42] Id. at § 70106(a).
[43] Id. at § 70107(a), (c)(2)(I).
[44] See § 70103(c)(3)(D).
[45] Id. at § 70108(a).
[46] Id. at § 70108(b).
[47] Id. at § 70108(c)(1) through (4).
[48] Id. at § 70109.
[49] Id. at § 70110(a)(1), (2).
[50] “Protecting America’s Ports”, MTSA, Homeland Security.
[51] Id. at § 70111.
[52] Id. at § 70113.
[53] Id. at § 70114(a)(1).
[54] Id. at § 70114(a)(1).
[55] 68 Fed. Reg. 39,353 through 39,371 (July 1, 2003).
[56] Id. at 39,354.
[57] Id. at § 70116(a).
[58] Id. at § 70116(b).
[59] 68 Fed. Reg. 9,537 (February 28, 2003) (codified at 33 C.F.R. § 160 et al.).
[60] 33 C.F.R. § 160.206.
[61] Id.
[62] 68 Fed. Reg. 39,314 (2003).
[63] Id.
[64] 33 C.F.R. § 160.206.
[65] Id. at § 160.204.
[66] Id. at § 160.210.
[67] Id. at § 160.208.
[68] PL 107-173, 116 Stat. 543 et seq.
[69] PL 107-173 § 402; 8 USC § 1221 (2003).
[70] PL 107-173 § 402(a) and (c); 8 USC § 1221(a) and (c) (2003).
[71] PL 107-173 § 402(e); 8 USC § 1221(e) (2003).
[72] PL 107-173 § 201, 202; 8 USC § 1721, 1722 (2003).
[73] 19 C.F.R. § 4.7 (2003).
[74] 19 C.F.R. § 4.8 (2002).
[75] 19 C.F.R. § 4.7 (2003).
[76] 68 Fed. Reg. 43,594 (July 23, 2003).
[77] 19 C.F.R. § 4.7(b)(4)(i) (2003).
[78] Id.
[79] 19 C.F.R. § 4.7(e) (2003).
[80] Id.
[81] PL 107-210, 116 Stat. 933 et seq.
[82] PL 107-210 § 343(b)(1); 19 USC § 1431a (b)(1) (2003).
[83] PL 107-210 § 343(b)(2); 19 USC § 1431a (b)(2) (2003).
[84] PL 107-210 § 343(f); 19 USC § 1431a (f) (2003).
[85] PL 107-210 § 343(a)(1), 116 Stat. 981.
[86] PL 107-210 § 343A, 116 Stat. 985.
[87] www.customs.ustreas.gov/xp/cgov/import/cargo_control/csi/csi_factsheet.xml
[88] www.customs.ustreas.gov/xp/cgov/import/commercial_enforcement/ctpat/fact_sheet.xml
[89] PL 107-56, 115 Stat. 272.
[90] PL 107-56 § 206; 50 USC § 1805 (2003).
[91] PL 107-56 § 803; 18 USC § 2339 (2003).
[92] Id.
[93] PL 107-56 § 311 31 USC § 5318a (2003).
[94] PL 107-56 § 371; 31 USC § 5332 (2003).
[95] Id.
[96] PL 107-56 § 412; 8 USC § 1226a (2003).
[97] PL 107-197, 116 Stat. 721.
[98] PL 107-197 § 102(a); 18 USC § 2332f (a)(1) (2003).
[99] PL 107-197 § 102(a); 18 USC § 2332f (e)(7) (2003).
[100] PL 107-197 § 102(a); 18 USC § 2332f (b) (2003).
[101] Id.
[102] PL 107-197 § 201 et seq., 116 Stat. 724 et seq.
[103] PL 107-197 § 202(a); 18 USC § 2339c (a) (2003).
[104] Id.
[105] PL 107-197 § 202(a); 18 USC § 2339c (b) (2003).
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