Status of CBP
Let me start out by talking about the new U.S. Customs and Border Protection agency. As I think all of you know, on March 1, 2003 - just one month ago - all immigration inspectors of the former INS, all agricultural border inspectors of Agriculture and Plant Health Inspection Service, and the entire Border Patrol, merged with U.S. Customs to form the Customs and Border Protection agency - "CBP" - within the Department of Homeland Security.

This is one of the most important and profound actual reorganizations that has and is taking place as a result of the creation of the Department of Homeland Security. The creation of U.S. Customs and Border Protection means that now, for the first time in our country's history, all agencies of the United States government with significant border responsibilities are unified into one agency of our government, into one border agency.

The reorganization means that 6,000 immigration inspectors and nearly 3,000 agriculture inspectors have joined with the 9,000 plus U.S. Customs inspectors and canine enforcement officers, to provide a total of 18,000 Customs and Border Protection officers at our nation's ports of entry. They are joined by approximately 12,000 Border Patrol Agents and personnel who have responsibility for enforcing our nation's law and controlling our borders between the ports of entry.

When combined with Customs trade and revenue and support functions, the new agency, Customs and Border Protection will have 41,000 employees and a requested budget of $6.7 billion for FY '04. CBP personnel are one fifth of the Department of Homeland Security, and this is a reflection of how important the security of our borders is to the security of our Homeland against the threat of international terrorism.

For the first time, we will be able to take a holistic view of our nation's borders. Think about it. We are now able, as a result of this very significant reorganization to devise a comprehensive strategy, for the ports of entry (POEs), and not just for the ports of entry, but for the entirety of our border. Because now, one - not multiple - agencies is responsible, and can be held accountable, for the management of the country's borders.

This is an extraordinary time for us - one filled with opportunities. To say that this will be a "challenge" - to use that overused Washington word - would be an understatement.

By unifying the border agencies - a good government reform advocated by many studies over the past 30 years - we can and will improve the way the U.S. Government manages the border. And we have already started doing that. We are combining our skills and resources, to make sure that we will be far more effective and efficient than we were when border responsibilities were fragmented into four agencies, in three different departments of government.

And, for the first time, we have unified the management of the personnel at our border ports of entry. Effective March 1st, I appointed twenty interim Directors of Field Operations (DFOs) around the country to exercise line authority over the 317 ports of entry, at our land borders, seaports, and international airports. At each of the ports of entry, I designated interim Port Directors to be in charge of and responsible for all the inspection functions - customs, immigration, and agriculture, at the POEs.

I have put in place a full-time Transition Management Office in order to focus on achieving a fully unified agency and integrated operations at our ports of entry as rapidly as possible, without disrupting continuity of our port operations. We have put in place a clear and understandable chain of command, from the Port Directors, to the DFOs, to the Assistant Commissioner for Field Operations at CBP Headquarters, to me. Similarly, on March 1, I established a clear chain of command for the Border Patrol.

Besides unifying the command structure for all FIS agencies at the ports of entry, we were able to achieve an immediate increase in security. Effective March 1, 2003, all frontline, primary inspectors were equipped with radiation detection devices at all ports of entry into the United States. That had not been possible before March 1, before the unification of border agencies.

On the challenge front, a great deal of work lies ahead of us in unifying four different agencies, and in carrying out the priority mission of U.S. Customs and Border Protection - preventing terrorists and terrorist weapons from entering the United States. This mission is even clearer during this time of heightened alert, and while our country is at war. Never has what we are doing been more important to the protection of the United States than it is right now.

Yet our challenge includes performing this priority counterterrorism mission while continuing to perform the traditional missions of the legacy agencies that make up CBP - and performing those functions well and effectively.

Twin Goals - Trade Community Continues to Have a Voice in CBP
This includes making sure that as we increase security, we do not stifle the flow of legitimate trade and travel that is so important to our nation's economy. At U.S. Customs, we had twin goals: improving security and facilitating legitimate trade and travel. I want you to know that those same twin goals still exist at U.S. Customs and Border Protection. That has not and will not change. I believe that the unification of federal inspection agencies into one agency will improve our ability to carry out those dual goals.

As I have said since taking office as Commissioner, the goals of increased security and expediting trade and travel are not mutually exclusive. We have proved that over and over again,

• through our pioneering of smart border initiatives,
• through CSI,
• through C-TPAT,
• through FAST and NEXUS,
• through better risk targeting at our borders based upon better information,
• through acquiring and using better detection technology that can screen less intrusively without significantly delaying the movement of goods,and especially,
• through our working with the private sector, with the trade, to figure out how to be smarter about security and trade facilitation.

I can assure you that the trade will continue to have a voice at CBP - a prominent voice. We will continue to listen to your concerns - and to work with you.

The Office of Trade Relations, which I revamped last year, has helped ensure effective, extensive communication between U.S. Customs and all facets of the trade community. That office continues under CBP. But I expect all offices of Customs and Border Protection to listen carefully to the views of the trade.

Trade Act of 2002
That brings me to an issue that Customs - now CBP - has been working on closely with the trade community over the last several months. That is the Trade Act of 2002's requirement for advance electronic data submission in all modes - land, sea, rail, and air. As you know, Customs put out strawman proposals to start a dialogue on meeting the Trade Act's requirements. Those strawman proposals were just that - strawmen. They were meant to jump-start the dialogue.

And they certainly did that.

We have been engaged in a productive, dialogue with COAC and others on these issues. There is an urgency because these rules will increase our national security. But we want to get them right. There have been differences of views and issues on which we are still attempting to reach a common understanding. But that's the value of the dialogue, of a consultative process.

At this point, I don't know what our proposed rules will look like. But I can tell you this: I am optimistic that the trade will be receptive to the proposals we're going to make. Because of the process we are using, I believe we will end up with rules that meet CBP's security objectives, while also taking into account the realities of the businesses involved.

24-Hour Rule
Why do I believe we can achieve this? Well, the 24-hour rule is one reason. We worked hard to achieve a rule that would provide the necessary - and I do mean necessary - security improvements, but also a rule that was manageable for those in the industry. One that, yes, required some changes in business practices, but that would not cripple the industry that the rule was, at least in part, designed to protect.

We heard nightmarish tales about how the 24-hour rule would paralyze maritime trade and put companies out of business. We heard that companies wouldn't be able to comply.

So what have we found since February 2, when we started enforcing compliance with the rule? We've found that none of these doomsday predictions have come to pass. Compliance with the new rule is high, and the number of disruptions is low. And CBP is getting information that is helping us identify containers we need to take a closer look at - ones that raise security concerns - and information that will let the low- or no-risk shipments move on through more quickly.

24-Hour Rule and CSI are Working
Let me make this clear to you: through the 24-hour rule and the Container Security Initiative (CSI) - we are identifying shipments that pose potential threats. These programs are working.

We have identified many problematic shipments and done security inspections, and we have made security-related seizures since implementation of CSI and the 24-hour rule. I'm not talking about the nuke in the box, but I can say there have been significant seizures.

And continued and rapid expansion of CSI is broadening the reach of these efforts. As some of you here know, within one year of my proposal of CSI in January 2002, the governments representing 18 of the top 20 ports agreed to implement CSI. CSI is already operational in Le Havre; Rotterdam; Antwerp; and in Bremerhaven and Hamburg, Germany; Yokohama, Japan; and in Singapore - and will be operational next week in Hong Kong. CSI will be implemented at other ports, like Felixstowe, Genoa, La Spezia soon thereafter.

So we are close to implementing CSI at most of the top 20 foreign ports representing over two-thirds of all cargo containers shipped to the U.S. This was Phase I of CSI, and we are close to being able to announce the expansion of CSI, or CSI "Phase II."

Although I am not announcing Phase II yet, I can give you a preview. Under CSI Phase II, I expect we will implement the CSI program at many other foreign ports - those ports that ship a significant volume of cargo to the United States, and that have the infrastructure and detection technology to support the CSI program. To get a head start on CSI Phase II, we have already signed CSI agreements with Malaysia and Sweden, covering the two major container ports of Malaysia and Gothenburg, Sweden, the main container port for the Nordic countries. To date, a total of 15 countries (including Canada) have agreed to implement CSI with us, and many other countries have already expressed a desire to join.

The increasing breadth of the program is good for all of us. It protects our country, it protects our seaports, it protects trade, and it protects your industry.

And when fully implemented, CSI will facilitate the movement of trade, actually moving cargo containers more quickly and predictably than now.

24-Hour Rule - NVOCC Issue
I recognize that there have been some implementation issues relating to the 24-hour rule that need to be worked through. We have been working closely with the trade community to resolve these issues.

One issue we have been dealing with recently concerns the fact that some automated NVOCCs are having difficulty moving their containers through once they physically arrive in the United States. This is the result of a number of factors, including poor communication between the NVOCC and steamship line communities.

CBP has been working to identify and resolve this issue, in partnership with the NVOs and carrier communities. We have identified a number of potential solutions, and we have taken steps to see that those potential solutions are implemented by the NVOs and the steamship lines.

It's possible that the potential solutions may require some rather small changes in business practices on the part of NVOs and carriers, as well as on the part of terminal operators.

However, I expect these segments of the trade community to make these changes and to work together to successfully implement the 24-hour rule. Our national security demands that they do no less. Let's get this done.

24-Hour Rule - Rerouting Issue
Another issue that has come up with respect to the 24-hour rule concerns intentional rerouting away from U.S. ports. I have received anecdotal reports that certain steamship lines are rerouting to Canada to evade requirements of the 24-hour rule. This is unacceptable and it is extremely shortsighted.

I have instructed our targeting teams in Canada to identify any vessels that they believe have started off-loading containers at Canadian seaports as a means for evading the 24-hour rule, and to treat the shipments from those vessels as presumptively high risk. Any steamship lines that believe it is in their best interest, or the best interest of shippers, to evade compliance are mistaken.

Canada
CBP has also been working closely with Canada to harmonize manifest requirements, and other actions that permit relaxation of security requirements at our physical, mutual border. And I am optimistic the Canadian government will soon adopt its own 24-hour rule for oceangoing cargo containers.

Conclusion
I think or hope all of you know that the changes I am directing as Commissioner are not designed to wreak havoc on your businesses. They are changes designed to meet the demands of the new age in which we live. An age in which terrorism poses a very real and ongoing threat to all of us.

We cannot stand by and wait for the unthinkable to happen. We must work together - private sector and government - to design solutions that will prevent it from happening.

- We are working together.
- And I can promise you that we will continue working together.
- And together, we will meet the challenges that lie ahead.

Thank you.

Commissioner Bonner reserves the right to edit his written remarks during his oral presentation and to speak extemporaneously. Thus, his actual remarks, as given, may vary slightly from the written text.