T2 B1 Canada Trip 2 Of 3 Fdr- 9-30-03- Submission By Canada Customs And Revenue Agency- Ccra 894

National Commission on Terrorist Attacks Upon the United States Submission by Canada Customs and Revenue Agency (CCRA)

Ottawa, Ontario September 30, 2003

National Commission on The Terrorist Attacks Upon the United States Submission by the Canada Customs and Revenue Agency (CCRA) Pre-September 11th Relationship The Canadian and U.S. Customs Services have enjoyed a close working relationship for many years. Close co-operation has existed at all levels - both at national Headquarters and particularly in the field. Our interaction prior to September 11, 2001, was for the most part, operational in nature. Joint force intelligence operations were underway in various parts of the country to address criminal activity of common concern. The Customs Mutual Assistance Agreement (CMAA) which was signed in 1984, also formed the legal basis for co-operation on many levels including the exchange of information on importers, exporters and individual travelers suspected of being involved in Customs infractions. Post September 11th Relationship The events in the United States on September 11, 2001, intensified Canada Customs' relationship with our American counterparts. In the hours immediately following the events and for several days after, our administrations were in constant close contact. The CCRA processed 33,000 passengers on the 224 planes that had been diverted as a result of the closure of U.S. airspace. Our respective command centers, in partnership with those of the RCMP and the FBI and others, were operating at full capacity verifying identities and travel patterns of individuals of interest. The intensity of those few days served to further solidify the already good working relationships that existed. The relationship evolved from one with an operational focus to one that emphasized joint planning, joint programs and risk management.

The Canada/U.S. Accord on our Shared Border, signed in February 1995, was for several years, the means whereby our two administrations exchanged best practices as well as ideas on issues of common interest. It was also a forum to work towards harmonization of our respective Customs procedures. Following September 11th, the Accord meetings proved to be an excellent foundation for the development of the Customs components of the Manley/Ridge 30-Point Plan which was launched in December 2001.

The 30 Point Plan National and economic security is the number one goal of all of the customs-related initiatives in the 30-Point Plan. The volume of movement of goods and people between our two countries is a measure of the magnitude of the challenge we face to achieve our goal. • more than $2 billion of cross-border trade per day; • more than 102 million travelers come to Canada annually; • there werel 1 million commercial releases at Canadian ports; and • 6.5 million trucks and 44,000 trains enter Canada annually. Given this interdependence, it is clear that whatever programs are put into place at our borders to ensure security, must not unduly affect the smooth flow of legitimate trade and travelers. The design of our border programs is based on three broad risk management principles that wholly support the need for a balanced and smart approach to managing the border: 1. Our efforts must be concentrated on high and unknown risk cargo and people - our programs must be designed to move low risk traffic with minimum customs intervention; 2. Advanced information is essential - the sooner information on shipments and travelers is received prior to arrival, the better able we are to assess risk; and

3. Canada and the U.S. must work in very close cooperation to protect our external borders - we need to establish joint programs for the screening and examination of cargo and people that are coming into our countries from outside of North America. Based on these three principles, the CCRA and the U.S. Bureau of Customs and Border Protection (CBP) have designed and implemented a number of very successful programs. Initiatives at the External Borders (Airports and Seaports) Advance Passenger Information/Personal Name Record (API/PNR) The API/PNR Program is one way that we are targeting risks in advance. Advanced Passenger Information includes the name, date of birth, address, nationality, and passport number of travelers. The Personal Name Record includes a variety of additional information about the traveler such as the date he/she purchased the ticket, the method of payment and the travel routing chosen. Airlines are required to send this information to us as the aircraft is leaving the airport of departure. The information is run against databases that contain information on persons who are the subject of "lookouts" in both Canada and the United States. API information is received on 90% of air travelers to Canada. PNR information is run against a series of high risk "indicators". Those travelers who display a sufficient number of indicators are flagged and, on arrival, are referred for a Customs secondary examination.

In order to maximize our capacity to identity high-risk travelers, we are finalizing an agreement whereby the CCRA and the U.S. CBP will exchange information on high-risk travelers. The two agencies will also exchange lookouts. The 24-Hour Rule for Marine Containers In January 2002, the US CBP launched their Container Security Initiative (CSI) which consists of four core elements: 1. Using intelligence and automated information received 24 hours prior to lading in a foreign port to identify and target highrisk containers; 2. Pre-screening those containers identified as high-risk at the port of departure, before they arrive at U.S. ports; 3. Detection technology to quickly pre-screen high-risk containers; and 4. Using smarter, tamper-poof containers. In 2004, the CCRA will implement a very similar program whereby information about marine container cargo destined for Canada will be required 24 hours prior to lading. As is the case for API/PNR, we have agreed with US Customs that we would exchange information on high-risk containers coming to either country. We will also exchange our lookouts. Joint In-transit Targeting In March 2002, the CCRA and the US Customs Service implemented a joint in-transit targeting program at 5 large marine ports in North America. The CCRA placed targeters at the Ports of Seattte and Newark and the USCS deployed officers to the Canadian Ports of Montreal, Halifax and Vancouver.

Under this program, information is exchanged on marine containers that arrive at a port in one country and move over land in-transit to the other. The information on these importations is examined jointly by both Customs administrations using law enforcement and customs data bases from both sides of the border. The program is an excellent example of the advantages of pooling our intelligence and targeting resources at the external border. It has also served to enhance the ongoing operational relationships between our two services. Initiatives at the Shared Border Free and Secure Trade (FAST) The need to ensure secure trade between Canada and the U.S. is also paramount. The FAST program is a joint Canada/U.S. initiative. It is a harmonized commercial process that is offered to registered importers using approved carriers and FAST certified drivers. Importers, carriers and drivers apply for the program by providing detailed information about their business practices, supply chain, as well as their personal background. A verification is made against Customs compliance and criminal data bases on both sides of the border. Approved FAST participants, while still subject to random examination, are offered expedited clearance with minimum intervention by either customs administration at the border. FAST became operational in December 2002. As of September 1, 2003, 24 importers have submitted applications with 5 approved to date; 313 carriers have applied with 132 approved, and 27,337 driver applications have been received with 6799 having received their cards. It is important to note that the FAST Program remained operational at the Canada/US Border during periods when the alert level in the United States went to Code Orange.

Advanced Commercial Information for Air. Highway and Rail The 24-hour rule for marine containers is the first step in the implementation of advanced commercial reporting in the CCRA. In July 2003, the CCRA and U.S. CBP announced the adoption of prearrival notification for all other commercial modes of transportation. The reporting timeframes will be harmonized to the greatest extent possible with those of the U.S. We expect to be in a position to implement harmonized timeframes for the reporting of commercial air, highway and rail shipments in 2005. NEXUS As is the case with our commercial clients, legitimate, low-risk travelers are also offered expedited clearance across the Canada/U.S. border. Applicants are required to undergo a preapproval process similar to FAST drivers. Personal information is verified against customs, immigration and criminal data bases on both sides of the border and, if deemed low risk, applicants are issued an identification card authorizing them to use NEXUS dedicated lanes at the border with minimal intervention by Customs. In the 15 months since the current NEXUS program was implemented, 58,000 applications have been received, 49,400 have been approved, 2000 denied or withdrawn, and 6600 are in the review process. A pilot project will be undertaken in the near future to extend the NEXUS program to the air mode using iris scan technology. As in the case of the FAST Program, NEXUS has remained in operation during periods where the U.S. level of alert was raised to Code Orange.

Investments in People and Technology The CCRA has invested heavily in both people and technology to increase security at the border - principally at air and seaports. In October 2001, the CCRA was given an infusion of $433 million (CAN) to invest in people, programs and equipment to enhance border security. 130 officers were deployed to marine and airport locations to augment our targeting and examination programs. 166 officers were deployed to other security-related activities in the field. The Shared Border Accord and our enhanced partnership with the U.S. have also provided an excellent opportunity to pool our research and development of a broad range of detection technology such as xray and gamma ray scanners and vapor extraction technology. Since October 2001, the CCRA has invested $45.4 in detection technology at the border. The most significant investment has been in large-scale gamma-ray scanning equipment. Canada has purchased 11 mobile VACIS units that have been deployed to large marine terminals, airports as well as high volume land border locations. These units have the capacity to scan cargo containers and truck trailers. They have proven to be valuable tools to assist Customs officers in identifying high-risk shipments for examination. We are also testing and will soon deploy sophisticated radiation detection equipment at our high volume marine and airport locations. This technology will enable us to scan virtually all containers being imported into Canada.

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Conclusion In conclusion, we strongly believe that borders are no longer limited to the lines between or around our two countries. The border is multi-layered. Our efforts must start overseas with the identification and interdiction of high-risk goods and people. To achieve our goal, we must work in partnership with our U.S. colleagues and with the international law enforcement community to share best practices and to exchange intelligence. Finally, we believe that high-risk goods and people will not come from across our shared border but from overseas (i.e. airports and seaports). That is where we should collectively concentrate our efforts and resources.