Brief Background on CBP
The agency I lead, U.S. Customs and Border Protection, is, as many of you know, in the midst of an historic transition to the Department of Homeland Security. It is in the midst of the largest, most profound, and most complex actual merger of personnel and functions taking place within the new Department of Homeland Security.

CBP is an actual merger, because to create CBP, we have taken almost all of U.S. Customs and merged with it with all of the immigration inspectors from the former INS, the agriculture border inspectors from the Department of Agriculture's APHIS, and the entire Border Patrol. The total number of employees in CBP is over 40,000. To put it another way, CBP has over one-fifth of all the personnel that make up the Department of Homeland Security.

But it's not just the size of the merger that makes the creation of CBP profound. This merger is historic, because for the first time in our country's history, all agencies of the United States Government with significant border responsibilities have been unified into one agency of our government; one agency to manage and secure our borders.

Priority Mission, Traditional Missions
The priority mission of this new agency is homeland security. And for a border agency, that means preventing terrorists and terrorist weapons from entering our country.

The traditional missions of the predecessor agencies that make up CBP remain important. This includes anti-smuggling, revenue collection, trade regulation, admissibility determinations, and the like.

Although it has been nearly two years since the terrorist attacks of September 11th, 2001--the same two years that I have been the Commissioner of what was U.S. Customs Service, and is now U.S. Customs and Border Protection, in the new Department of Homeland Security--the terrorist threat continues today throughout the world, and it will be with us, unfortunately, for many years to come.

Twin Goals
One of the biggest challenges we face in addressing the terrorist threat is increasing security while simultaneously facilitating trade. At U.S. Customs and Border Protection, as was the case when we were the U.S. Customs Service, we know that security and trade facilitation are our twin goals--goals that are not mutually exclusive.

We understand that we must protect American livelihoods as well as American lives.

So, U.S. Customs and Border Protection is doing everything it can to increase security while simultaneously preserving, and when possible, even improving the more efficient movement of legitimate trade and travel.

CSI
One of the ways in which we've done this is by extending our zone of security beyond our physical borders--so that the borders are the last line of defense, not the first line of defense.

The Container Security Initiative, or CSI, is one of those initiatives. As many of you know, CSI is U.S. Customs and Border Protection's program for detecting and deterring terrorists from exploiting the vulnerabilities of containerized shipping--the primary system of global trade.

Because about 90% of all world cargo moves in cargo containers, if a terrorist weapon were to be concealed inside a container, or if a container were used as a weapon, it could wreak havoc on global trade and the world economy.

Through CSI, we are partnering with other countries to address that threat.

Under CSI, our CBP inspectors work side-by-side with officials from our partner customs agencies at foreign ports--at "CSI ports." They target and screen high-risk containers using technology--including radiation detectors and x-ray equipment -- before the cargo is shipped outbound for the country of destination.

CSI enables us to better separate high-risk and low-risk cargo, so that we can facilitate the low-risk cargo through our border, while focusing our resources where they are most needed--on the high-risk cargo.

Benefits of CSI
The benefits of CSI are straightforward. First, the bottom line is that CSI offers real protection, on a day-to-day basis, for the primary system of international trade---a system on which all national economies of the world depend.

Second, in the event of an attack using a cargo container, the CSI network of ports will be able to remain operational, because those ports will already have an effective security system in place--one that will deter and prevent terrorists from using it. In other words, the shipping lanes between Hong Kong and U.S. ports could remain open. They would not need to be shut down.

In thinking about security, what we wanted to achieve with CSI is a system that not only provides a substantial increase in security, but one that also facilitates trade, allows it to move more efficiently. And CSI does this.

When a container has been pre-screened and sealed under CSI, U.S. Customs and Border Protection will not, except in rare cases, need to inspect it again when it reaches the U.S.

Because you only need to do the security screening once, it makes sense to do it at the port of origin or transshipment, rather than the port of arrival, particularly when it is imperative to detect, deter, and prevent the use of cargo containers to conceal WMD or to be used as a terrorist weapons.

Status of CSI
My initial goal for CSI was to start the program in the top 20 ports in terms of volume of cargo containers shipped to the U.S. Hong Kong, as many of you know, is ranked number one on that list. An average of 6,100 containers are exported from Hong Kong to the United States every day. Hong Kong is, of course, also a major hub for Asian shipping routes. So it was very important to get Hong Kong into CSI as soon as possible.

I signed the Declaration to implement CSI right here in Hong Kong with Commissioner Wong on September 23, 2002. And CSI has been operational in Hong Kong for since May 12, 2003. We would have been here sooner, but for the SARS situation.

We have a U.S. CSI team in Hong Kong of 8 employees, and we are considering increasing that number to deal with the very heavy workload. The Hong Kong Customs and Excise CSI team is made up of 37 inspectors.

So far, CSI is going well in Hong Kong--we've had outstanding cooperative efforts between our two customs agencies. CSI is off to a good start here in Hong Kong.

Why did we want to start CSI with the top 20 ports? That was a logical place to start because, as many of you know, those ports account for over two-thirds -- nearly 70% -- of all of the containers shipped to U.S. seaports.

On July 29, I signed a declaration in Beijing whereby China agreed to join CSI and implement CSI at the ports of Shanghai and in Shenzhen. With the addition of China to the CSI program, the nations that represent 19 of the top 20 ports have now agreed to join CSI. Moreover, CSI is now "operational" at 16 ports worldwide.

And, as Secretary Ridge announced recently, U.S. Customs and Border Protection will expand CSI beyond the top 20 foreign ports to perhaps 20-25 additional foreign ports. Under Phase 2 of CSI, we will bring CSI to key strategic ports throughout the world, including, for the first time, ports in the Middle East and Africa. We will bring CSI to ports in Malaysia, Sri Lanka, and South Africa. The more countries that implement CSI with us, the closer we will be to making our vision of protection for global maritime trade a reality.

24-Hour Rule
Obviously, a key to CSI's success is advance information. In order to identify and screen high-risk containers before they leave foreign ports, we need the manifest information before the cargo goes on the ship.

As I think most of you know, Customs--now CBP--issued a rule last fall, the so-called "24-hour rule" that required transmission of manifest information for sea cargo to us 24 hours in advance of lading.

That rule is giving CBP the information we need to identify the containers we need to take a closer look at--ones that raise security concerns -- before they can pose a threat. It is also gives us the information that will let the low- or no-risk shipments move on through more quickly.

Trade Act Proposed Regs
Over the past several months, Customs and Border Protection worked closely with the trade community to form proposed regulations that would require advance electronic information for all modes--including trucks, rail, and air. These regulations are required by the Trade Act of 2002.

Those proposed regulations were published last week. They are the result of a careful and considered effort to strike the appropriate balance between security and trade facilitation.

There is a 30-day comment period, and then CBP will carefully consider and take into account all comments received, and subsequently publish final regulations.

As with the 24-hour rule for oceangoing cargo, the proposed regulations will permit more effective risk management for the terrorist threat.

C-TPAT
Let me just briefly mention another of our post 9/11 initiatives--another initiative that is helping us achieve our twin goals: the Customs-Trade Partnership Against Terrorism, or C-TPAT.

C-TPAT helps illustrate the important role that industry can and should play in improving our homeland security. The idea behind C-TPAT is that by partnering with the trade community -- U.S. importers, customs brokers, carriers, and others -- we can improve security along the entire supply chain, while expediting the flow of legitimate commerce into the United States.

Under C-TPAT, companies agree to take steps to adopt "best practices" to improve the security of their shipments and the security of the supply chain--from foreign loading docks to the U.S. border ports of entry. Those companies that meet security standards are then given the "fast lane" through our land border crossings, and through our seaports.

Like CSI, C-TPAT enables U.S. Customs and Border Protection -- working with the trade -- to more readily separate the low-risk traffic from the high-risk traffic. And then we can facilitate the low risk while focusing our resources on the high risk.

Status of C-TPAT
To date, over 3,400 companies have signed up and are participating as C-TPAT partners with U.S. Customs and Border Protection. This is an astounding and laudable response by corporate America.

Conclusion
As Customs and Border Protection moves forward with programs CSI, the 24-hour rule, the proposed regulations for the Trade Act, and C-TPAT, and as we move forward with our merger in the Department of Homeland Security, I promise you this:

We will become even more effective and efficient at the borders; we will continue increasing security without stifling the flow of legitimate trade and travel; we will better protect the American people and the American economy.