Port and Border Security Needs and Programs Homeland Security Financing Briefing National Press Club

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Port and Border Security Needs and
ProgramsHomeland Security Financing
BriefingNational Press ClubWashington, DCJune
18, 2002

• Carol Fuchs Government Relations Counsel
• Katten Muchin Zavis Rosenman
• 1025 Thomas Jefferson St., NW
• East Lobby, Suite 700
• Washington, DC 20007
• 202-625-3635
• carol.fuchs_at_kmzr.com

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Trade Environment Pre 9/11

• Based on statutory and regulatory requirements.
• Strict trade compliance measurement.
• Separate from admissibility.
• Separate from revenue.
• Almost every violation viewed as material.
• Hefty fines, penalties and other sanctions.
• Close scrutiny.
• Constant process of filing corrections.
• Burdensome, intrusive audits.
• Processes from the distant past.

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Trade Environment Post 9/11

• Attention largely shifted to security.
• Heavy reliance on voluntary programs.
• Customs-Trade Partnership Against Terrorism
  (C-TPAT).
• FAST, STEP, CSI, NEXUS, and many others.
• Success measured by high compliance, not revenue.
• Less intrusive trade compliance audits.
• Focus on internal controls limited transaction
  sampling.
• Voluntary self assessment program.

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Why is C-TPAT fundamentally different?

• Participation is voluntary.
• Government offers benefits, but no penalty for
  non-participation.
• Customer driven down the supply chain.
• Based on flexible guidelines/recommendations, not
  rigid standards.
• Applicants prepare their own profiles.
• Acceptance based on government review of
  application.
• No government or third party audit required.
• Program integrity maintained through validation
  process.
• Is the partner doing what the partner promised
  to do?

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Challenges for Trade

• Resources focused on security, yet legal
  requirements for trade compliance remain.
• Increasing pressure to participate in voluntary
  programs.
• New requirements for advance submission of cargo
  information.
• Detailed data elements.
• Long advance lead times.
• Heavy emphasis on automation.
• Not limited to high risk cargo.
• Data exchanges and delays create security risks.

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Special Challenges

• Maintaining flexibility of voluntary programs.
• Minimizing cost and burden associated with
• Automation.
• Staffing.
• Duplication.
• Policing.
• Managing interagency coordination.
• Worldwide harmonization.
• TRADE SHARES SECURITY CONCERNS AND SUPPORTS
  GOVERNMENT EFFORTS.