Security Partnerships Bulletin

April 29, 2010

Welcome to the inaugural issue of  the Security Partnerships Bulletin. In this newsletter, we will review significant legal and policy developments regarding homeland security partnerships between the US government and foreign governments. Steptoe & Johnson LLP offers foreign governments and businesses comprehensive counseling on these matters, including insights from former senior government officials responsible for US homeland security laws and policies.

  • Further Expansion of the Visa Waiver Program. On March 9, President Obama welcomed Greece as the newest entrant to the Visa Waiver Program (VWP); citizens from the 36 current VWP members can be screened electronically to obtain authorization to travel to the United States, rather than having to obtain a visa. Statements by President Obama and Homeland Security Secretary Napolitano indicate that, like the Bush administration, the Obama Administration views the VWP as increasing both security and efficiency.

    • In April 21, 2010 testimony before the Senate Committee on Homeland Security and Governmental Affairs, the DHS Assistant Secretary for Policy, David Heyman, expressed support for the expansion of the VWP to countries able to meet the statutory standards and willing and able to enter into a close security relationship with the US Government.

    • Foreign government entry into the program generally requires many months, and often years, of preparation, followed by intensive US government reviews of the foreign country.

    • Each current member is subject to biennial security reviews by the US government and must maintain standards to remain eligible for the program.

    • Nine countries have obtained membership in the VWP since the Secure Travel and Counterterrorism Partnership Act of 2007 transformed the VWP into a significant security program.

    • To be eligible for the program, countries aspiring to VWP membership must meet multiple standards related to security and other matters; some of these standards are more subjective (and within the discretion of the US Government) than others, but many non-member countries can make themselves attractive candidates for the VWP.

    • For many countries, a significant obstacle to VWP membership is the lack of a biometric air exit program in the United States. It is likely that the US government will make decisions within the next year about whether and how to establish such a program.

  • ESTA Enforced Compliance. As of March 20, 2010, DHS has begun enforcing electronic authorization requirements regarding passengers traveling by air and sea under the VWP. Citizens from the 36 countries that are members of the VWP may travel to the United States without visas, but these travelers must obtain travel authorizations from the Electronic System for Travel Authorization (ESTA).

    • Currently ESTA is free of charge. However, pursuant to the Travel Promotion Act, which was signed on March 4, 2010, DHS's Customs and Border Protection agency (CBP) is required to establish a fee for ESTA within six months. The fee will be the sum of $10.00 and a to-be-determined amount to cover the cost of administering the system.

    • The ESTA requirement went into effect in January 2009, but CBP determined that enforcement of the requirement would be reasonable only after aircraft operators had time to adjust their systems to ascertain which travelers had obtained ESTAs.

    • On January 20, 2010, CBP announced that by March 20, airlines would be required have the requisite systems implemented to ensure ESTA compliance. CBP has said that VWP travelers and their aircraft operators now risk fines if they travel without ESTAs. CBP may fine aircraft operators as much as $3,300 per violation, and each noncompliant passenger constitutes a violation.

    • CBP also has indicated, however, that it will exercise discretion regarding enforcement and may not issue a fine for every violation.

  • Enhanced Passenger Screening Requires Enhanced Airline Cooperation. On April 2, the US government announced a new approach to screening passengers departing from foreign countries. In the wake of the Christmas bombing attempt by Umar Farouk Abdulmutallab, a Nigerian who tried to blow up a flight en route from Amsterdam to Detroit, the US government announced enhanced screening for all air travelers from any one of 14 countries of concern, most of which are located in the Mid-East. This prompted criticism from the aviation industry, officials from the 14 countries, and many security experts, among others.

    • The new approach outlined by the US government no longer relies on fixed categories of nationality and departure points as the dominant screening criteria; instead, it focuses on the use of intelligence to make individualized assessments of the need for enhanced screening.

    • All passengers who match specific criteria, including travel patterns, will be subjected to additional security screening.

    • The success of this new approach, which will take time to implement fully, depends on close cooperation among airlines, foreign governments, and the Department of Homeland Security, particularly CBP as decisions are made in real-time.
    • Protocols for this new approach are under development; airlines and foreign airport authorities will need to ensure that these developing protocols account for their own system capabilities and foreign laws and policies regarding the conduct of passenger screening.
  • Growth of International Registered Traveler Programs. In November 2009, DHS published a Notice of Proposed Rulemaking to establish Global Entry, a pilot US registered traveler program, as a permanent program. A final rule is expected soon.

    • Global Entry operates at 20 US airports and allows US citizens entering the country by air to skip immigration lines in favor of kiosks. To enroll, citizens pay a fee, provide personal information and fingerprints, and submit to a security interview. When Global Entry members arrive in the United States, they go to a kiosk, place their fingerprints on a reader, and exit the immigration area.

    • In April 2009, after several years of negotiations, CBP implemented an agreement with the Netherlands to allow Dutch citizens to participate in Global Entry. Global Entry is open to Dutch citizens enrolled in the Dutch registered traveler program (called Privium), and US citizens enrolled in Global Entry are eligible for Privium, thereby enabling those US citizens to skip immigration lines in the Netherlands.

    • With the establishment of Global Entry as a permanent program, and the establishment of a multilateral framework – the Fast Low Risk Universal Crossing alliance, or FLUX – to house reciprocal agreements like the US-Netherlands agreement, there is significant interest in the expansion of these registered traveler partnerships, and negotiations of new international partnerships are underway.

    • Particularly with regard to major hub airports in Europe, there is a risk that non-participating countries could lose business. Connecting fliers may choose to route through countries that have international registered traveler partnerships, because such arrangements enable foreign visitors to expedite their travel. Sensitivity to that risk, as well as various airports’ interest in becoming a “travel hubs,” may facilitate new international registered traveler partnerships.

  • Looming August Deadline for Air Cargo Screening.  US law requires that, beginning this August, 100% of cargo loaded onto passenger planes must be screened. This screening requirement applies to foreign originating flights to the United States, as well as domestic flights within the United States.

    • While the Department of Homeland Security will enforce this requirement for domestic flights, DHS has announced that it will not prohibit unscreened cargo from flying into the United States and may take an additional two years, beyond the August deadline, to ensure 100% screening of cargo on foreign originating flights.

    • The Department of Homeland Security’s Transportation Security Administration (TSA) has indicated that it will work with foreign partners to ensure that every country’s air cargo screening systems provide adequate security. Foreign governments may want to proactively contact TSA to facilitate a TSA determination that the foreign screening regime is adequate.

    • One possible mechanism for screening cargo on foreign originating flights is a risk-rating system that relies on data about the shipper, the airline, the cargo contents, the intended recipients, and other factors. DHS’s Customs and Border Protection agency developed a risk-rating system for maritime cargo, and DHS often has asserted that such a risk-rating system in the maritime environment is preferable to detailed scanning of every piece of cargo. It is unclear whether such a risk-rating regime would help satisfy the statutory air cargo screening mandate.

  • Growth of C-TPAT Mutual Recognition Arrangements. The Customs-Trade Partnership Against Terrorism (C-TPAT) is a voluntary supply chain security program. C-TPAT provides trade facilitation benefits to importers that meet security standards established by DHS’s Customs and Border Protection agency. Approximately 10,000 certified businesses are in the program.
    • A relatively new dimension is the growth of “mutual recognition” arrangements whereby C-TPAT benefits may be accorded to members of foreign supply chain security programs.

    • There currently are mutual recognition arrangements with four countries: (1) New Zealand Customs Service’s Secure Export Scheme (SES); (2) Canada Border Services Agency’s Partners in Protection Program (PIP); (3) Jordan Customs Department’s Golden List Program (GLP); and (4) Japan Customs and Tariff Bureau’s Authorized Economic Operator Program (AEO).

    • As of February 2010, CBP had accepted into C-TPAT 128 businesses that were validated under these four foreign programs.

    • CBP has indicated that three prerequisites must be satisfied for mutual recognition: (1) the foreign customs administration must have a full fledged operational program in place – i.e. not a program in development or a pilot program; (2) the foreign partnership program must have a strong validation process built into its program; and (3) the foreign partnership program must have a strong security component built into its program.

    • Additional mutual recognition arrangements are being considered with Korea and Singapore, and CBP is considering whether and what type of arrangements can be implemented with the European Union and/or its member states.

The Security Partnerships Bulletin will be published quarterly. If you have any questions or for further information, please feel free to contact Stephen Heifetz at 202.429.6227 or Marc Frey at 202.429.6414.