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Cablegate: Gos Letter to Dhs Regarding New Cargo Scanning Legislation

VZCZCXRO5021
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #1612/01 2430020
ZNR UUUUU ZZH
R 310020Z AUG 07
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 3897
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHHK/AMCONSUL HONG KONG 6244
RUEHGV/USMISSION GENEVA 0852
RUEAHLC/DEPT OF HOMELAND SECURITY CENTER WASHINGTON DC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 SINGAPORE 001612

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958 N/A
TAGS: PREL PGOV PTER PHSA ETRD EWWT SN
SUBJECT: GOS LETTER TO DHS REGARDING NEW CARGO SCANNING LEGISLATION

REF: STATE 119837

1. (U) Transportation Minister Raymond Lim recently sent the letter
in paragraph 2 to Secretary Chertoff highlighting Singapore's
concerns about our new cargo scanning legislation. Per State
119837, we will report other local reactions septel.

2. (SBU) Begin text of letter:

MINISTER FOR TRANSPORT
REPUBLIC OF SINGAPORE

6 August 2007

The Honorable Secretary Michael Chertoff
Department of Homeland Security
The United States of America

LEGISLATION REQUIRING 100% SCANNING FOR CONTAINERS
BOUND FOR THE UNITED STATES

Dear Mr. Chertoff:

We have noted with concern the requirement for all containers bound
for the United States to be pre-scanned at foreign ports from 1 July
2012, which has been included in the legislation that was recently
passed in Congress. I am writing to share our serious concerns
about the significant negative impact that this 100% container
scanning requirement will have on maritime trade efficiency and
consumers.

Feasibility study still in progress
-----------------------------------

You would be aware that when Congress passed the SAFE Port Act on 13
October 2006, the Department of Homeland Security (DHS) was tasked
to conduct pilots at six foreign ports under the Secure Freight
Initiative (SFI) to evaluate the feasibility of 100% scanning for
containers bound for the United States. As a major transshipment
port and partner of the United States in many key security
initiatives, Singapore agreed to participate at the request of DHS
to assist in evaluating the feasibility of implementing 100%
container scanning in a transshipment hub.

With the SFI pilot study only just beginning, the necessary data to
evaluate the feasibility and viability of 100% scanning is still
unavailable. The United States and other participating countries
therefore do not yet have a good appreciation of the full slate of
issues that could arise, although there is already considerable
feedback from the ground operators on the negative impact of such a
regime on global trade and business. This would be detrimental to
all parties concerned, including the United States.

Higher cost for shippers and consumers
--------------------------------------

Already, we can expect 100% scanning of containers bound for the
United States to undermine operational efficiencies in ports and for
shippers. In the absence of data from the SFI pilot study, we will
not be able to assess the full implications of this regime and
undertake measures to mitigate its possible disruptions to maritime
trade. For example, longer container handling time will result in
longer berth time and shipping charges. This will inevitably
translate into higher costs for American consumers. In this regard,
we note that several American and international business and
industrial groups have also raised similar concerns over this issue.
Furthermore, the requirement on 100% container scanning could also
encourage other ports to adopt similar measures for containers bound
for their countries, including those originating from the United
States. Such retaliatory measures would have adverse impact on
international trade.

Impact on effective risk assessment
-----------------------------------

In addition, implementing a 100% scanning regime without the
requisite technology to undertake an intelligent risk analysis of
the data collected will in fact undermine efforts to improve
security. In such circumstances, the surge of data can actually
degrade our risk assessment ability. This would potentially put us
in a situation worse off than with the targeted risk-based approach
which we employ today.

As the largest container port in the world handling more than 24
million containers annually, Singapore is fully committed to

SINGAPORE 00001612 002 OF 002


ensuring security in the global supply chain. Since the United
States is Singapore's 2nd largest trading partner, with total trade
amounting to S$90 billion in 2006, the impact of the legislation on
trade between Singapore and the United States is therefore very
significant.

Some of the technical concerns associated with a 100% scanning
regime are outlined in the attached document. Singapore will
appreciate the Administration's consideration of these points, and
the subsequent findings of the SFI trial, in assessing the
feasibility of implementing 100% container scanning requirements at
the Singapore Port.

Yours sincerely,

RAYMOND LIM
Minister for Transport
Singapore

Technical Concerns in Implementing 100% Scanning of Containers Bound
for the United States:

1. Current Scanning Technology Inadequate. Existing scanning
technology does not support the fast and efficient scanning of
containers. The portal-based system not only creates chokepoints in
port operations but also increases handling and movement times of
containers. All these factors will inevitably translate into higher
port charges for shippers and cargo owners. Ultimately, consumers
will end up bearing this increased cost of movement through the
supply chain.

2. Duplication of Programmes. The US already has several security
initiatives in operation in many ports around the world, including
but not limited to the Container Security Initiative (CSI), Megaport
Radiation Detection Initiative (RDI), Proliferation Security
Initiative (PSI), and Customs-Trade Partnership Against Terrorism
(C-TPAT). These measures provide for a layered approach to security
today. To further mandate an additional blanket measure like 100%
container scanning will result in duplication of resources for
marginal gains.

3. Prohibitive Cost of Implementation. To effectively impose 100%
scanning in a major port will require a significant number of
non-intrusive imaging and radiation detection equipment in order to
minimize the impact to operational efficiency. In a port like
Singapore with a throughput of more than 24 million containers a
year, the number of scanners required would be extremely
prohibitive. The shipping industry will also be hurt by such
expensive measures.

4. Lack of Clarity on Funding. The bill does not address the issue
of funding for 100% scanning. The cost of implementing such a
programme will be significant and many ports will turn to the US to
fund this requirement.

5. Total Supply Chain Security Approach. A total supply chain
approach to security -- one where all stakeholders in the supply
chain play their part to secure the shipment from node to node -- is
a more viable option. The Authorised Economic Operators (AEO)
programmes advocated by the World Customs Organisation (WCO) and a
recognition of each country's secure supply chain procedures will
provide a more effective and robust security approach. This,
coupled with effective risk-targeting of containers, will serve the
world trading community better, both in terms of security and
trade.

End text of letter.
SHIELDS

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