The following was reported on in today’s edition of ST&R’s “WorldTrade Interactive”.
The European Commission (EC) issued a working paper this month that blasts a U.S. statute that requires all foreign cargo containers shipped to the United States (except U.S. and foreign military cargo) to be scanned by non-intrusive imaging equipment and radiation detection equipment at the foreign port before being loaded on a U.S.-bound vessel by July 1, 2012. The EC believes that if 100 percent scanning were implemented in European ports “it would be excessively costly, would be unlikely to improve global security, would absorb resources currently allocated to EU security interests, and would disrupt trade and transport within the EU and worldwide.” The report states that the EU does not contemplate implementing 100 percent scanning of containers at export and will instead prioritize investments to enhance multilayered risk management systems for targeting and inspecting dangerous cargo and strengthening international cooperation to facilitate this process.
The report indicates that European port procedures and regulations would have to be fundamentally redesigned to comply with the 100 percent scanning requirement. This would represent a considerable financial burden, including 430 million for investments for scanning and radiation detection and an increase of 200 million per year in operational costs. The EC also estimates that the direct transport costs of U.S.-bound consignments would increase by approximately 10 percent and observes that ports unable to implement 100 percent scanning would lose access to the U.S. market, increasing congestion and environmental costs for other ports. Furthermore, the EC believes that the annual welfare loss from trade disruption could total some 10 billion for the EU and U.S. combined and some 17 billion worldwide. According to the report, these welfare costs could skyrocket to about &euro150 billion per year if 100 percent scanning were replicated on a world scale.!
The report favors a system where all exports and imports undergo comprehensive and effective multilayered risk management processed using a range of methods and technologies. The EU is working to fully deploy such a system by the end of this year that will (1) combine electronic systems and practical tools of collection of information prior to arrival to and departure from the EU; (2) enhance risk analysis and risk management procedures; (3) develop new technologies; and (4) coordinate enforcement by customs authorities in all EU member states.
In addition, the EU is seeking to intensify international cooperation with the United States and other countries to “maximize effectiveness and efficiency” and may also consider strengthening bilateral cooperation on such matters as ensuring effective collection of quality data; exchanging relevant security information; implementing mutual recognition of trade partnership programs and other security controls; developing and spreading utilization of new security technologies, including scanning; and building capacities and training of staff for effective implementation.
Secretary of Homeland Security Janet Napolitano told the Senate Commerce, Science and Transportation Committee on December 2, 2009, that her agency will seek a two-year extension of the July 2012 deadline for achieving 100 percent scanning of all inbound ocean-borne cargo containers. Napolitano explained that the Department of Homeland Security would require significant additional human and technological resources that do not currently exist, as well as the redesign of many ports, to be able to comply with the current deadline. The law allows Napolitano to extend the 100 percent cargo scanning deadline by two years and to renew this extension in additional two-year increments if she certifies to Congress that systems to scan containers (at least two of the following criteria would have to be met).
-are not available for purchase and installation
-do not have a sufficiently low false alarm rate for use in the supply chain
-cannot be purchased, deployed or operated at ports overseas, including, if applicable, because a port does not have the physical characteristics to install such a system
-cannot be integrated, as necessary, with existing systems
-will significantly impact trade capacity and the flow of cargo
-do not adequately provide an automated notification of questionable or high-risk cargo as a trigger for further inspection by appropriately trained personnel
