Cfr - Border Control Intro

GLOBALIZATION AND THE FUTURE OF BORDER CONTROL by Stephen E. Flynn, Ph.D. Senior Fellow, National Security Studies Council on Foreign Relations The post-Cold War momentum towards open economies, open technologies, and open societies1 have accentuated an important new reality-that despite the prerogatives of sovereignty, the capacity nations possess to control the movement of people and goods is eroding. Stated succinctly, the traditional tools for policing transborder flows are no match for: (1) modern transportation and logistics systems, and (2) the market imperatives for facilitating trade and travel. Everywhere the fiction of control is becoming more apparent as efforts to filter the legal from illegal have become an exercise in looking for needles in a growing haystack. Eroding border control has sobering implications for a wide range of security, crime, and economic development interests. For centuries governments have sought to control their maritime and terrestrial borders for reasons of security, law enforcement, immigration control, public safety, and revenues. For many governments, patrolling borders is seen as vital to deter aggression, particularly since friction with neighboring states or ethnic groups often involves disputes over boundaries. Also, border control has always been an important part of managing the flows of contraband that the host society perceives as threatening, such as weapons and drugs. States traditionally have had a keen interest in regulating who comes and goes across their borders. Passports and visas are closely scrutinized at points of entry. Additionally, public health strategies that aim to manage the spread of disease by people, livestock, and agricultural products generally include border control measures. More recently, safety and environmental threats such as hazardous waste spills and the spread of invasive species caused by ships, planes, and trucks have made the border the locus for regulating the transportation sector. Finally, states seek to control borders so they can generate revenues. Collecting duties, tolls, and other fees at the border is often an important means for governments to acquire the resources to bankroll their activities. Traditionally, the prerogatives of sovereignty have meant that each state has developed its own approach to policing its borders. The result is that international travelers and freight daily confront a complex array of unique rules, norms, and regulations. But there is little basis for optimism that the sum of these local practices will equal a whole in achieving control over the rising tide of transborder movements of goods and people. In fact, the prevalence of distinctive local approaches are likely contributing to the problem by creating barriers for international cooperation in combating common transnational challenges. There may be an alternative. Transportation and logistics firms are embracing new information, communications, and navigational technologies to track the movements of people and goods in near-real time. They are doing this to improve the efficiency of their

internal operations and to satisfy their customers that they can deliver goods or passengers on time. But, these same technologies could be enlisted to provide border control agents with timely, detailed electronic information on licit cargo and people movements. Such information would have the result of making transborder flows "transparent" and could serve two purposes. First, it would allow cargo and passenger manifests to be examined well in advance of arrival so that non-suspicious flows could be cleared for entry without delay at the border. Second, for suspicious flows, it would provide the means to pinpoint interdiction efforts. The need to explore such an alternative stems from four important developments associated with globalization that have created daunting challenges for border control at sea, land, and air commercial entry points. First, there has been an explosive growth in the volume of goods and people moving internationally. The pressures of global competitiveness have led companies to focus on their core businesses and cast off functions they feel would be more profitable to contract out. Modern corporations shop the globe for sub-contractors who offer the best product at the best price. This practice of outsourcing has fueled overseas trade and business travel. Similarly, fewer governmental restrictions on travel combined with a growing number of people with greater disposable incomes have made tourism one of the world's leading industries. Modern transportation has contributed to these developments by making it easier and cheaper to move across vast distances. Second, the globalization of trade and travel have placed a premium on speed and efficiency. Cargo and passengers increasingly move through hubs that are designed to link the air, rail, surface, and in many instances, sea modes of transportation. Timing is critical to keeping these huge, complex logistical centers running smoothly. Also, companies on the receiving end are demanding that shippers deliver their goods on time, as the business practice of maintaining smaller inventories and relying upon "just-intime" deliveries becomes more commonplace. Third--and largely as a result of the first two developments--globalization has highlighted the economic benefits states derive from facilitating trade and travel. As countries jockey to attract cargo movements or tourists through their ports or air terminals, they are under enormous pressure to reduce inspections that could cause delays. In many modern ports, gantry cranes can unload thousands of containers from a single ship in just a few short hours and load those containers on outbound tractor-trailers or on railcars without any physical inspection by customs authorities. Once on the road, the chance that these cargoes will be inspected along land borders has become more remote as well. The European Community has led the way on this by eliminating border inspections altogether for transporters who belong to their member states. NAFTA contains provisions scheduled to be enacted on January 1, 2000, that would allow Mexican, Canadian, and U.S. trucks to move their cargoes anywhere on the continent. Fourth and finally, there is a growing number of borders to police. The collapse of the Soviet Union and the end of the Cold War has brought with it a growing array of separatist groups who seek autonomy. Kosovo and East Timor are but the most prominent recent examples of this phenomenon. In many instances, these newly emerging states lack the training or the resources to enforce laws at the border.

No nation dedicates more resources to border control activities than the United States and no nation faces so great a border control challenge. For the world's largest economy, the difficulty of policing its borders is illustrated by the following statistics. There are over 300 ports, with more than 3700 terminals that handle passenger and cargo movements in the United States. The nation's land and sea borders total 9600 miles with more than 1 billion metric tons of overseas trade moving across them.2 Five million commercial trucks and 4 million ocean containers arrived across those borders in 1996. That same year, more than 400 million people entered the United States, up from 225 million in 1980.3 If these numbers are not intimidating enough, current projections have the amount of air cargo at least tripling over the next 20 years and the domestic and international marine trade doubling. Thus, on its face, it would seem that even if the number of border control agents were expanded dramatically, and they were equipped with the latest tools for conducting comprehensive physical inspections, the share volume of these flows would make more never enough. Here are some indicators that current practices to police U.S. borders are already under significant strain: The Immigration and Naturalization Service estimates there are 5 million undocumented aliens illegally in the United States, representing nearly 2 percent of the U.S. population.4

Despite the nearly one-quarter trillion dollar investment in drug control programs by federal, state and local governments since 1983, cocaine and heroin are just as available and more affordable than they were a decade ago.5

The National Insurance Crime Bureau estimates 200,000 stolen automobiles are illegally transported out of the United States every year.6

The National Cargo Security Council estimates that U.S. corporations lost $10 billion of cargo due to theft during transport in 1998-the vast majority of this cargo was either imported or exported cargo.7

10,000-20,000 metric tons of chloroflourocarbons (CFCs) are smuggled into the United States each year to supply the large black market in these ozone depleting products.8

Of course, it is not just illegal migrants and smugglers of contraband that are finding it easier to reach their final destinations. This same system could be readily exploited by America's adversaries. In January 1999, two international terrorists were apprehended trying to enter the United States as stowaways in a commercial container. Weapons of mass destruction could be easily smuggled into the United States via containers as well. Why should a rogue state or terrorist organization invest in ballistic missile technologies when a weapon of mass destruction could be loaded into a container with a small global position system (GPS) device and sent anywhere in the world? Hypothetically, based on current U.S. Customs Service practices, Usama bin Laden could have a front company in Karachi load a biological agent into a container ultimately destined for Newark, NJ with virtually no risk the container would be intercepted. Under this scenario, he could use a Pakistani exporter with an established record of trade within the United States. The container could be sent via Singapore or Hong Kong to merge in among the 1 million containers that are handled by these ports each month. It could arrive in the United States via the Port of Long Beach or Port of Los Angeles and be loaded directly onto a bonded rail or truck for the transcontinental trip. Since its "entry" port is Newark, the U.S. Customs Service does not require a cargo manifest on file until it reaches the East Coast. And the carrier has up to 60 days after the goods arrive to make any changes to the manifest including what and how much actually were shipped. The container could be diverted or the weapon activated anywhere enroute long before it was officially identified to be in the country. This scenario and the preceding statistics point out one of the central dilemmas of the current age. For drugs, thugs, and terrorists-borders pose little in a way of a barrier. In most instances they can find ways to move about the international system with virtual impunity. However, states are still bound by the rules of sovereignty and must conduct their activities within clearly established jurisdictional boundaries. When they operate beyond those boundaries, they can do so only in accordance with a very complex and highly restrictive set of rules. Thus, a comprehensive reformulation of how the United States and other nations practice border control is long overdue. Attention will be required at four levels. First, any strategy to reduce risks along the sea, land, and terrestrial borders must be supportive of the need to move goods and people. There will be substantial resistance to any border control initiative that is perceived as compromising the competitive position of private sector actors. Accordingly, it will be essential to identify appropriate incentives for industry players to be supportive of new requirements. Second, efforts to improve security at the border entry points require that parallel security efforts be undertaken in the rest of the transportation and logistics network. If they are not, inspectors will continue to be overwhelmed by the enormity of the task of identifying and intercepting illicit goods at arrival. Also, if security improvements are limited to the ports, airports, and land-border crossings, the result will be generate the "balloon effect;" i.e., pushing illicit activities horizontally or vertically into the transportation and logistics systems where there is a reduced chance of detection or interdiction. Instead, a "layereddefense" approach is essential.

Third, border control initiatives must be pursued in a regional and international context. Unilateral efforts to tighten security along one state's borders without commensurate efforts to improve security in neighboring countries may lead carriers to "port-shop;" i.e., to move their business to other market-entry points (e.g., Canada, the Bahamas, and Mexico in the case of the United States) where their goods are cleared more quickly. Thus the result for the more security-conscious state would be to find itself in the unenviable position of watching the competitive position of its transportation centers erode while the locus of the security risk simply shifts outside its reach. In short, states that attempt only to bolster their conventional approaches to the growing border control threat will only be disappointed. National or locally-directed measures such as: (1) requiring shippers and carriers to comply with unique local security requirements, (2) subjecting a greater number of goods and people to more intrusive inspections by customs and immigration authorities, and (3) imposing stiffer fines and penalties for non-compliance will, at a minimum, be actively resisted by the private sector and will, likely spawn a cat-and-mouse game where companies constantly adapt their logistical operations to access the market where controls are weakest. So what is to be done? Doing nothing should not be an option-the stakes associated with weak border control are too high. But, doing something to reduce the risk of criminals and terrorists infiltrating legitimate transportation and logistics systems has two seemingly daunting preconditions: the private sector must be a willing partner; and regional governments must be willing to work towards common security goals. Since the traditional state-centric responses work against these two ends, they must be ruled out. In their place nations need to commit themselves to doing three things. First, they must work with the private sector, appropriate non-governmental organizations, and international organizations and reach agreement on common security guidelines to reduce the risk that the global transportation and logistics networks will be targeted or exploited by terrorists and criminals. Second, the capacity for appropriate authorities to monitor the international flows of goods and people must be improved. Third, states must commit themselves to undertaking steps to remove physical and procedural barriers to transborder movements for shippers and carriers who comply with the new guidelines. At first brush, advocating an approach that calls for simultaneously raising the bar on security, making the transportation and logistic networks more open, and facilitating cross-border flows of goods and people appears counter-intuitive. Typically security is often associated with tightening controls over information, not making it more available. And greater facilitation appears at odds with the implication of the earlier analysis; i.e, that it is the sheer volume of these flows and the market-imperative for minimizing the costs associated with structural and procedural delays the has made identifying and intercepting illicit activity at the border like searching for a needle in the haystack. The implications of this analogy would seem to mandate shrinking the haystack. Facilitating trade and travel presumably would have the opposite result.

Upon closer examination, however, enhancing security by requiring greater transparency is not contradictory. While there is the occasional criminal or terrorist who brazenly commits a crime or acts of terror in the plain of day, once the advantage of tactical surprise has been lost, these activities are hard to repeat by the same actors. Thus, most illicit activities tend to gravitate to where there are shadows. Accordingly, by requiring carriers and shippers: (1) to maintain detailed information on the contents and movements of goods, and (2) to make that information available to border control authorities when there is a legitimate requirement for it, there will be fewer places within logistical flows in which to hide. Also, in the event of a lapse in security, it will be much easier to determine responsibility and hold the appropriate transgressors accountable. Nor are security and facilitation inversely related. Clearly the absence of security works against facilitation. If criminals and terrorists are free to do their worst in a country, most shippers and carriers will avoid it. Those who do not will have to bear the cost of hiring their own security forces to guard their goods in transit-a phenomenon that is becoming commonplace in contemporary Russia. Conversely, border control measures-however well-intentioned-that significantly slow the movements of goods may actually compromise security since the opportunity to steal goods or place contraband among them is greatest when cargo is at rest. Too, if such measures are too onerous, they create substantial incentives for corruption which inevitably leads to less security. Confronted by long queues and lengthy delays, officials will be routinely tempted by bribes for the "privilege" to move to the head of the line or to obtain early release of legitimate commerce. Those who are willing to accept these payments become easy targets for organized criminals with more nefarious interests. Not only are facilitation and transparency not necessarily at odds with security-and security with facilitation and openness-increasingly they are all mutually reinforcing. This is the natural outgrowth of new information, communications, and navigational technologies that are becoming more commonplace within the transportation and logistics industries. Shippers and carriers are embracing tracking technologies and sophisticated electronic data-bases to improve the efficiency of internal business operations and to satisfy customers that they can deliver their goods or their passengers on time. But, these same technologies hold out the potential of making the international flows of cargo and passengers "transparent" and could serve two purposes. First, it would allow cargo and passenger manifests to be "virtually" inspected well in advance of arrival so that nonsuspicious flows could be cleared for entry without delay at the border-a boon for legitimate transporters. Second, for suspicious flows, it would provide the means to pinpoint interdiction efforts, which lowers the risk of collateral damage or disruption to legitimate cargo and passenger traffic. In other words, it would help to optimize limited enforcement resources by shrinking the haystack and eliminating many of the shadows within licit flows where illicit activities could flourish. Getting from where we are to where we need to be will not be easy. Profits margins in the transportation and logistics industries are generally quite thin and many shippers and carriers-particularly smaller firms-are likely to resist any new security initiative that raises their overhead costs. Moving away from traditional practices is also likely to be

resisted by the government agencies and enforcement officials who are charged with border control responsibilities. Few within government understand the dynamic global forces behind the changes within in the transportation industry and many believe that the current challenges can be readily met by a greater commitment to providing more resources to their agencies. In some locales where corruption is common, new practices that create "transparency" would threaten to undermine the lucrative ways many officials supplement their incomes. (For instance, in Albania, 60 percent of customs authorities admit paying substantial bribes to get their jobs.) In short, many private sector and government actors are likely to have a substantial interest in preserving the status quo. However, crafted and marketed carefully, the proposed regime could include sufficient incentives to win widespread acceptance. Increasingly, the issue of porous borders is capturing the attention of a vast array of important voter interests; i.e., individuals and groups concerned with combating weapons and drugs smuggling, countering terrorism, preventing immigration and customs violations, curbing corruption, and responding to safety and environmental threats that range from unsafe trucking to invasive species. Collectively these groups represent a large and potentially powerful constituency for advancing reform. Transportation officials, seaport and airport directors should welcome the central element of the proposed regime-that an important way to improve security is to eliminate delays from inefficient terminal operations, improving intermodal links, and streamlining government procedures within these facilities. Thus, the argument for reforming obsolete labor practices, modernizing the transportation infrastructure and improving the connections to road and rail, and curbing the abuses of corrupt officials are not just because this is good for business. Advocates for these reforms can argue that they will not only lower transportation costs and improve service for shippers and carriers, they will help reduce the risk posed to society by organized criminals and terrorists as well. Private sector actors must also be concerned with the possibility that states might undertake increasingly draconian measures to reassure domestic polities that important national interests are not being unduly compromised by the increased transborder flows associated with greater international trade. That is, a rise in the incidence of crime and terrorism would bolster neo-isolationist sentiments. In the case of a particularly egregious, well-publicized lapse of security, public officials are likely to respond by swiftly advancing new legislation designed to placate these fears-and the draft legislation is unlikely to be vetted with the private sector. Private actors connected with the transportation and logistics networks also should worry about the fact they are increasingly likely to be the targets of crime and acts of terror. In South Florida, drug trafficking organizations have been moving into what they apparently see as a lower risk and nearly as lucrative activity-cargo theft. The high-tech industry has been particularly hard hit, which by one industry estimate has had to the result of raising the price of each PC sold in the United States by $100 to cover mounting insurance costs and losses. Also, America's most likely adversaries-terrorists, radical religious or ethnic sects, rogue states-can hold few illusions about winning toe-to-toe contests with U.S.

armed forces. Instead, the targets of tomorrow will likely be where the economic vice traditional military components of national power lie. In the next century, one of the most dangerous places to work may be as a civilian employee of a company that is part of our nation's critical transportation infrastructure. Indeed, these new risks and realities have not been lost on the transportation industry. Organizations like the National Cargo Security Council, the Maritime Security Council, and the Overseas Security Advisory Council are playing important roles in raising awareness among their members, within key government agencies, and among the general public of the growing transportation security threat. They are also working to identify and support the advancement of best practices to respond to this threat. Important U.S. agencies are recognizing the need to approach border control activities in a more sophisticated way. The U.S. Customs Service has long recognized that commercial transport is extremely susceptible to a sophisticated drug trafficking organization and has sought to strengthen private-public cooperation in response. In 1984, it established the Sea Carrier Initiative (SCI), in which sea carriers participating in the program agreed to improve their port and cargo security practices to prevent drug smuggling. In return, in the event their security was breached, Customs would agree to reduce fines and not exercise its authority to seize conveyances. Next, in order to improve security further down the logistics chain, in 1996 Customs established the Business AntiSmuggling Coalition (BASC) in which it agrees to provide security site surveys, to assist in developing and implementing security programs, to conduct post-seizure analysis of drug smuggling cases, and to guide the application and deployment of security technology. Most recently, Customs has developed the Americas Counter Smuggling Initiative (ACSI) in which is seeks to strengthen cooperative regional efforts within the international trade community of Latin America to better police each aspect of the commercial transportation process. In the fall of 1998, on behalf of the Secretary of Transportation, the U.S. Coast Guard and the U.S. Maritime Administration assumed the lead in advancing a Marine Transportation System (MTS) initiative. Security was one of the five areas of emphasis. The September 1999 MTS Task Force report to Congress, emphasized the need to approach security by forging relationships and guidelines vice dictating new rules and addressing it within the context of the broader transportation network. It specifically called for raising security awareness, improving transparency, forging stronger public/private partnerships, and strengthening international cooperation. Also this past year, Senator Bob Graham (D-FL) successfully lobbied the Clinton Administration to establish a Seaport Crime and Security Commission to examine current vulnerabilities and develop comprehensive recommendations for more effectively policing the nation's ports, waterways, and the connecting intermodal links. Regionally, there appears to be a crystallization of concern and a willingness to cooperate on border control issues. This year the governments of Argentina and Peru have asked for U.S. assistance in formulating comprehensive security plans which ensure the smooth flow of legitimate maritime trade while denying access to the system by illicit goods and

activities.. The U.S. Maritime Administration and U.S. Coast Guard are struggling to clear a backlog of requests soliciting their assistance in providing private and public sector training to combat crime and improve the safety and security of ports. In midOctober, the Organization of American States' Inter-American Committee on Ports passed a resolution acknowledging the importance of transportation security and calling for the OAS members to commit themselves to support the development of a draft strategy for improving the security of the hemispheric maritime trade corridors. In December 1998, this same resolution was included in final declaration of the Western Hemisphere Transport Ministerial meeting. Similar language can be found in 1997 U.S./Caribbean Summit Declaration of Principles where the United States and the independent states of the Caribbean Basin agreed "to engage transport companies and the private sector within their jurisdictions in a cooperative partnership . . . [to develop and adopt] security procedures and participation in programs which deter illegal access to and use of cargoes, commercial conveyances, and associated equipment and seaport and terminal facilities." Finally, among international development organizations, there is growing recognition of the connection between border control and development and nation-building. As outlined earlier, border control is not simply a problem of keeping "bad" things out. For many developing nations, duties and fees collected at their ports, airports, and along their land borders are a key source of government revenues which finance essential services and build infrastructure. Also, poor border control practices very often fuel corruption and contribute to the formation of black markets. These realities have decidedly adverse consequences for initiatives designed to improve governance and economic sustainability. In short, despite the drag of the past and the reluctance by many actors to disrupt the status quo, the conditions appear ripe for advancing the development of a comprehensive strategy for reforming border control activities within the hemisphere. At a minimum, such a strategy should embrace many of the elements of the initiatives identified above and advance the following: Increase awareness among shippers and carriers of the vulnerabilities, threats, and best practices for improving transportation security by funding and conducting training programs. Work to standardize customs regimes to support expeditious cargo and passenger clearance and improved system efficiency. Support the research and development and the speedy fielding of reliable, low-cost tracking devices for ships and their cargoes. Modernize and automate freight transport systems, processes, and trade data information flows to support system monitoring, intervention, and accountability.

Forge and maintain ongoing intelligence sharing relationships with the members of the transportation and logistics industries wherever appropriate. Encourage international and regional development organizations to place greater emphasis on upgrading transportation and logistics infrastructure. However, the distribution of financial assistance should be conditional on governments embracing regional security guidelines.

CONCLUSION Borders in our changing world are increasingly meeting grounds for markets and cultures. While historically their aim has been to separate, today they often have to accommodate. Thus, those who spend their time living and working along our borders enjoy ringside seats to one of the most vexing and important policy contests of our time-how to strike the right balance between control and openness. If we are willing to break with tried and true border enforcement approaches that are no longer true, we will find that control and openness need not be antithetical. By forging stronger private and public relationships among industry, regulators, and enforcement officials; by embracing new tracking and data management technologies for carriers and cargoes; and advancing a regime that brings greater transparency to the regional and global flows of people and goods, states will be better positioned to assure that the imperatives of border control keep pace with those of globalization.

Notes

1 Maryann Cusimano mantains: "Sovereignty is challenged externally by the globalizing dynamics of open markets, open societies, and open technologies, which make the borders of even strong states permeable by outside forces." Maryann K. Cusimano, Beyond Sovereignty (New York: St. Martin's Press, 1999): 11-12. 2 An Assessment of The U.S. Maritime Transportation System: A Report to Congress. (Washington: U.S. Department of Transportation, Sep 1999): 1-2. 3 International Crime Control Strategy, The White House, May 1998 (Washington: Government Printing Office, 1998), 33. 4 International Crime Control Strategy, 16. 5 In 1995, the average purity for retail heroin was 39.7 percent nationwide, up from an average of 7 percent in 1985. Cocaine at the retail level had average purity levels of 61

percent and average wholesale purity levels of 83 percent in 1995. Office of National Drug Control Policy, National Drug Control-Strategy-1997 (Washington: Government Printing Office, 1997), 21. 6 International Crime Control Strategy, 16. 7 Interview w/ Edward Bodolato, Chairman, National Cargo Security Council, Washington, DC, May 10, 1999. 8 International Crime Control Strategy, 22.