Technology Fights National Security Threat

The nature of national security threats against the United States has changed since Sept. 11, 2001. U.S. officials and citizens alike perceive the threat to be from terrorists who would attack with conventional explosives or weapons of mass destruction moving through the international supply chain.

The United States Government (USG) has responded through three developments; information technology plays a part in each.

1. Requirements for advanced electronic filing of cargo information. The 24-hour rule requires that a steamship company must electronically file a manifest with the Bureau of Customs and Border Protection of the Department of Homeland Security (CBP) 24 hours before lading at the foreign port. The manifest must contain detailed descriptions or the Harmonized Tariff System number of all products in the shipment. Since Feb. 2, 2003, shippers may no longer describe products as “general cargo.”

CBP asks for information electronically to profile a shipment quickly and determine whether to inspect it. CBP does not have time to key-stroke the information, and must use its algorithms on electronic data to profile the import. It must use tools, including automation, to determine where to focus its limited capacity to conduct inspections.

By Oct. 1, 2003, CBP will issue regulations requiring advanced electronic filing of cargo information for exports and imports in all transport modes.

In early 2003, CBP held open town meetings to discuss its eight so-called strawman proposals to implement Section 343 of the Trade Act of 2002. The strawman proposals call for filings at different lengths of time ranging from four hours to 24 hours before loading or departure.

The proposals, which received heavy trade criticism, will be issued in early summer 2003, and final regulations will be issued by Oct. 1, 2003. The time frames under these rules may change from those in the strawman proposals.

2. Interdiction of money that would otherwise fund terrorists. On May 9, 2003, the U.S. regulators of banks, broker dealers, insurance firms, and other financial institutions issued regulations under Section 326 of the USA Patriot Act. These require financial institutions to create compliance programs to avoid transfers to terrorists. The rules impose uniform requirements and standards for financial institutions to verify the identity of new account holders.

In addition, financial institutions will be required to screen account holders against federally issued lists of terrorists. The regulations become effective Oct. 1, 2003.

As a practical matter, the process of blacklist name screening has long been essential for banks and other parties to avoid prohibited dealing with named terrorists and other parties blacklisted as fronts for U.S.-embargoed countries such as Iran and Libya.

In addition, financial institutions are subject to longstanding requirements to block the funds of parties blacklisted by the Treasury Department and to report to law enforcement authorities all parties to such transactions. Name-matching software and a source for the changing lists are necessary tools to achieve compliance.

The United Nations blacklists terrorists and compels member nations to block funds destined to them. Each country implements this system at a slightly different pace, and the various lists change frequently but at different times. Providers of trade content and related technology help commercial firms and financial institutions stay abreast of these changes each day as the rules change around the world.

3. USG initiatives to urge other countries to block transshipments of items that are destined for terrorists. The multilateralization of the response to the changed national security threat is a trend in another respect. The USG has urged major ports such as Singapore to impose export control laws that prohibit transshipment of items to consignees such as terrorists or embargoed countries. The significant feature of the new Singapore system is that it applies to certain movements through the port from other countries and destined to third countries.

Keeping up with such changes around the world is more important than ever given the changed security threat and the efforts of other nations to address terrorism. Technology can help.

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