Our theme this year is the importance of partnerships in meeting the challenges we face together, to both secure our borders and facilitate the flow of legitimate trade.

Over the next few days, we will be discussing a wide range of issues including improvements to our supply chain security strategy; the impact of ACE on operations; import safety and what we need to do to meet this challenge; our partnerships that ensure the safe trade of agricultural products; and our cooperation on trade facilitation and compliance activities.

I especially want to thank all the members of the trade who volunteered to serve on our panels this year and to lend your expertise to these discussions.

And I would encourage all of you to take advantage of the opportunity to interact with our panelists and speakers during the sessions, because you are critical to our efforts to find the right solutions for the next generation of policies, technology and operational procedures.

You will help us improve our ability to secure commerce and support our economy. So, we greatly value this opportunity to hear your views, and I know from experience this group will not be shy about sharing your insights.

We will also be hearing from Homeland Security Secretary Michael Chertoff at lunch tomorrow.

And, I know he is looking forward to sharing his thoughts on how DHS manages its partnerships with the trade, and with all levels of government, to help protect the American people.

I have now been in the job a year and a half, and this is my second opportunity to address the Trade Symposium. And after being through the baptism of several fires, I am continually struck by the enormous importance and complexity of CBP’s responsibilities.

But my confidence in our ability to meet those demands remains high, primarily because of the strength of our partnerships across the public sector, and with all of you in the trade—which will be the main subject of our discussions over the next two days.

The Threat
I want to begin by saying that I believe the threat of terrorist attacks is as real now as any time since 9/11. But our defenses against this threat have gotten stronger.

Our nation has put in place critical tools that have improved our ability to identify terrorist threats to our homeland, dismantle terrorist cells and disrupt their plots, and prevent terrorists from assuming false identities and crossing our borders to carry out attacks.

In the summer of 2006, we worked with British authorities to disrupt a plot that would have killed thousands of passengers aboard commercial aircraft departing the UK. This was a clear example of the importance of our international partnerships.

In June of this year, we helped break up a conspiracy to blow up fuel tanks at JFK International Airport. The success of either of these terrorist cells would have paralyzed international travel and commerce.

In addition to our primary counter-terrorism mission, we continue to battle against the entire range of illegal activities that have been our traditional missions for over two centuries.

Last year, we stopped nearly one million people trying to enter the United States illegally; intercepted nearly 3 million pounds of narcotics; seized nearly $200 million dollars worth of counterfeit goods’ and blocked numerous harmful pests and unsafe products that threaten the health of the American people.

Trade and Infrastructure Challenges
And as you know all too well, we are challenged by the constantly increasing volume of trade moving through our 326 sea, land and air ports of entry.

Trade has doubled in the last ten years, and experts predict it will double again in the next ten years. But our port infrastructure is not being modernized at a pace to deal with these increases effectively. This is one of the factors contributing to longer wait times, particularly on our land borders.

It is critical we look at a modernization plan that will enhance the capacity of our ports of entry over the next 10 years. We need to start that process now.

Supply Chain Security Strategy
That, in a sense, is the bad news. The good news is that U.S. Customs and Border Protection remains fully committed to a layered, risk-based strategy to meet this broad set of challenges.

We believe the basic strategy put in place with our trade after 9/11continues to provide the most effective approach for stopping a terrorist attempt to ship a weapon into the United States.

And there is one simple reason why we believe in this strategy so strongly: we know it works. It works for government. And, it works for the trade community.

Information – The Foundation
The first layer – the foundation for our entire strategy – is information.

While the Trade Act of 2002 changed the timeline for reporting cargo manifest data, we have not changed the content of the information we require from the trade for many years.

And we have long recognized that we were not receiving sufficient data on the origins of a shipment, the so-called point of stuffing.

We also lack information on all the various parties that handle a shipment during its transit to the United States.

10+2
The Security Filing, or 10 + 2 as it is popularly known, is designed to fill this gap.

The SAFE Port Act of 2006 mandated that we consult extensively with the trade to design the Security Filing, and to ensure the new data elements were the minimum we needed. And I want to thank our partners from our federal advisory committee, the COAC, for your hard work and leadership to coordinate the trade input to develop10 + 2.

The Notice of Proposed Rulemaking for the Security Filing was cleared by DHS last month, and now is under review at the Office of Management and Budget.

When the Notice is published, it will open another window for the trade and other stakeholders to submit comments, and I assure you that we will consider these comments as we draft the final rule.

I also assure you that we are committed to a phased, step-by-step implementation process for the Security Filing, which I envision could stretch over a period of 12 months. During this time, we will work with the trade to find the best approach for reporting the data in a way that aligns with your business model.

GTX
The Global Trade Exchange, or GTX, is an inventive approach that will explore the possibilities of providing additional transparency into the global supply chain.

GTX envisions a private sector managed data warehouse that would make available a larger amount of supply chain data that companies already create—beyond the information we currently require. Participation in this effort would be voluntary.

In the coming weeks, we will be offering a small-scale solicitation to test and validate the promise of this approach.

Even while we focus on the here and now benefits that we will realize from the Security Filing changes, we need to be open to evaluating future approaches, like GTX, that take advantage of innovations in information technology.

The hope is that such an approach may both enhance our capabilities—and streamline global filings.

Risked-based Targeting
We have made substantial improvements this year in our capability to process cargo information and conduct risk-based targeting assessments.

National Targeting Center
This spring, we opened a new National Targeting Center, dedicated to processing the data on cargo shipments.

The original NTC now focuses solely on information related to traveler movements. The new NTC – Cargo has a section to house the International Fellowship Program, under which customs officials from our foreign partners conduct joint targeting assessments side-by-side with their U.S. counterparts.

Two officials from Japan are currently at the new Center, and we expect two EU officials to arrive early next year.

ACE
We are also continuing to deploy portions of the ACE technology, which now is processing truck manifests across our entire land border. Through ACE we will integrate and replace virtually all CBP trade processing systems, a goal we expect to reach in 2010.

ACE is one of the government’s largest technology programs, and we could never have reached our current level of development without your help.

ACE represents a highly successful public-private partnership, and I want to thank all of you here today who have contributed so much of your scarce time and valuable expertise to helping us get ACE right.

Tomorrow morning, one of our panels will consider how ACE is supporting the trade and what our next steps should be.

Inspection of High-risk Shipments
Processing the information you send us through our risk analysis at the NTC allows us to perform the core function in our supply chain security strategy – separating high from low risk.

And, as I said, we remain committed to this strategy, as the most efficient use of our resources, and the most rapid process for moving your goods through our ports.

The results of our risk assessment are provided to our domestic ports of entry, as well as to our Container Security Initiative, or CSI, teams overseas. This year we reached our target of 58 CSI ports, which cover 86 percent of the shipments coming to the United States. CSI has been a remarkably successful program.

Together with our CSI partners in foreign countries, we are implementing a key component of the WCO SAFE Framework, namely, identifying high-risk shipments for further inspection before they are loaded on a ship.

We recognize that a successful terrorist attack anywhere in the world will have a paralyzing impact on the entire global trading system, with costs rapidly escalating into billions of dollars. CSI is helping to prevent that every day.

100% Scanning
We also are conducting a pilot project on the feasibility of scanning 100 percent of shipments coming to the United States.

This project is a mandate of the SAFE Port Act of 2006, and is operational in three ports: Qasim, Pakistan; Cortes, Honduras; and Southampton, UK. We are expanding to four additional ports over the next few months – Singapore, Hong Kong, Salalah and Busan—where we will do modified versions of SFI.

I should also mention that at U.S. seaports, 96 percent of containers are screened by Radiation Portal Monitors before entering American commerce.

As you know, the 9/11 Bill that Congress passed this summer modified the SAFE Port Act approach, and mandated 100% scanning for shipments coming to the United States by the year 2012.

It is no secret that we in DHS did not favor this approach, since we felt the risk-based strategy I have been describing is both more effective and more operationally feasible.

You will have an opportunity to discuss this issue in detail during the next panel, and I believe Secretary Chertoff will have some additional views on the subject tomorrow, as well.

C-TPAT – Our Key Partnership
The last element of our strategy is our trusted partnership with the trade – C-TPAT.

Now with over 7,800 members, C-TPAT is the largest and most successful public-private partnership created since 9/11.

Having this group of trusted partners, who now account for almost half the trade coming to the United States, makes an important contribution to our risk analysis process.

By expediting clearance of C-TPAT shipments, we can focus our resources on the relatively small number of shipments that are higher risk.

AEO
The World Customs Organization has developed a global standard for trusted partnerships with the trade, known as the Authorized Economic Operator or AEO program.

I am optimistic about the progress we are making under the WCO Framework to establish mutual recognition between C-TPAT and similar business partnership programs in other countries. One of our panels will cover the details of this effort this afternoon.

Facilitating Trade
The risk-based strategy we have developed, and continue to refine, has one key result.

The strategy gives us the level of confidence we need to facilitate the flow of legitimate trade across our borders and expedite the release of shipments we have identified as low risk.

Trade facilitation remains a part of our mission that is equal in importance to security. In the post-9/11 environment, we know finding the right security-facilitation balance is more complex.

But I remain fully committed to finding that balance, and with your help I am convinced we can do it.

Our partners in the trade, all of you, need to be equally committed to providing us with your best advice on how we can provide more facilitation benefits as a result of our improvements on the security side.

We need sound recommendations that are in the realm of the possible given legislative mandates and the other constraints imposed by regulation.

Since your businesses deal with the results of these rules every day, you are in the best place to help us develop the right approach for their implementation.

And I want you to know how committed I am to finding solutions to our mutual challenges that also make good business sense.

Office of International Trade
As the past year has shown, we took a major step forward in improving our trade facilitation capabilities with the creation of the Office of International Trade.

This office has given us a single focal point for trade operations and addressing your needs on a range of issues.

We completed the redesign of our import specialist operations in May. We now believe we have improved supervision and accountability, made better use of the existing workforce, and created a structure to operate under ACE.

Import Safety
And the consolidation of our trade resources came not a moment too soon, because early this year, the problem with melamine in pet food touched off heightened concern for the safety of imports.

We were well prepared to engage in the President’s Interagency Working Group on Import Safety established in July. Together with partners from across the government and the private sector, we participated in developing an action plan, issued last week, to address this critical issue. We are devoting an entire panel to this subject tomorrow.

I have been particularly pleased with one result of the Interagency Group’s work – the strong endorsement of rapidly completing the International Trade Data System, or ITDS.

ITDS is the process by which the business requirements of our partner federal agencies will be captured and built into ACE.

The import safety issue has clearly demonstrated how badly we need ACE and ITDS to provide the electronic interface that will link all the relevant government agencies in a common risk assessment process.

On import safety, our most critical partner is the Food and Drug Administration. In implementing the Bioterrorism Act of 2002, FDA created its Prior Notice Center, which now is co-located at CBP’s National Targeting Center. FDA has inspectors at 90 ports of entry, and also has authorized over 8,000 CBP officers to implement FDA policies to ensure the safety of imported food.

I am delighted that a senior FDA official will be participating in our panel on import safety tomorrow.

Agricultural Issues
Our partnership with the Department of Agriculture is indispensable to our import safety responsibilities – to ensuring we interdict threats to agriculture imports and to the U.S. agriculture industry itself.

When CBP was created four years ago, we integrated the agriculture inspectors from USDA. The Department of Agriculture continues to set policy in this area, and CBP implements it.

CBP Agriculture Specialists now number 2,100, and the impact of this force is multiplied by the cross training on agriculture threats we have provided to 18,000 CBP officers.

I’ve seen the highly effective enforcement achieved by this integrated force, and I believe it is the right approach. I do not agree with some suggestions to transfer the agriculture inspection function out of CBP.

Because of the importance of this issue, we are devoting an entire panel to it tomorrow, and we are pleased that USDA’s Director of Quarantine Policy will be on that panel.

Protecting IPR
Our interception of counterfeit goods continues to increase, and in FY07, we made 13,600 seizures on the border of goods infringing intellectual property rights. If they had been sold domestically, these goods had a value of nearly $200 million dollars.

As in so many of our operations, our partnership with the Immigration and Customs Enforcement Agency—ICE—is critical to our ability to meet our security and trade facilitation responsibilities.

This past June, we assisted ICE with a seizure of counterfeit goods in New York valued at nearly $700 million dollars.

Twenty-nine defendants – including customs brokers, freight forwarders, and CBP-bonded warehouse employees – were charged in a conspiracy to smuggle over 950 shipments of illegal merchandise into the United States.

We signed a cooperation agreement with China this year to strengthen IPR enforcement. And, we are engaging in a new WCO initiative to spread best practices for protecting intellectual property.

We will be relentless in our efforts to stop the flow of counterfeit goods into this country, and the threat they pose to the health of the U.S. consumer and the U.S. economy.

Key Initiatives
I want to tell you about some other initiatives we launched in CBP this year to improve our operations and our ability to discharge our key missions.

I expect you will soon see the results of these improvements on our border and at our ports, in terms of a better capability to keep bad people and harmful cargo out of the country, and more efficient processing of the millions of legitimate travelers and containers each year.

OIOC
We created an Office of Intelligence and Operations Coordination that brings our intelligence resources together with the old Office of Anti-Terrorism into a single unit.

The goal of this new office is to ensure we are using intelligence and information in a smarter way.

The office is a step toward achieving one of my key goals, transforming CBP into a fully-integrated, intelligence-driven organization.

The Intel and Ops Coordination office is taking over the responsibility of implementing plans for business resumption in the event a terrorist incident or natural disaster forces us to suspend normal operations in our ports.

We are working closely with Canada and Mexico, and with many of you in the trade, to develop communication and coordination protocols that will guide our decision-making to resume operations after a disruption in the flow of commerce.

I know several of you have been helping us in this effort, and I want to thank you for the support and expertise you provide to this critical work. You are already seeing the results of this planning.

This year, we created the Unified Business Resumption Message system, a web-based approach to alerting the trade to port closures and assisting with finding alternate routes and entry points.

We had a very successful, real-world, test of this system recently, with our response to the California wildfires, and we were very pleased with how it worked.

We cooperate hand-in-glove with our partners in the U.S. Coast Guard on business resumption, as well as numerous other initiatives related to port and cargo security. From the headquarters to the individual port level, we are coordinating with the Coast Guard, and I know you will see the benefits of this increased cooperation and more unified approach in meeting our common security challenges.

SBI
I also want to mention the Secure Border Initiative, which is really a national security effort where CBP has a leading role.

The initial focus of SBI is improving operational control of our land borders by deploying the right mix of personnel, technology and infrastructure.

SBI is a complex plan with very ambitious goals. This initiative will improve CBP’s capabilities both at and between our ports of entry; provide a stronger and more integrated CBP air and marine force; and support our operations down to the level of the individual agent and officer with better information management tools.

Contrary to what you may have heard from some sources, it is not just about building a fence.

SBI will have long-term benefits for the U.S. economy—and your businesses—since it will result in:

• Greater stability and reduced violence and criminal activities along our borders,
• A higher level of security in our transportation industry work force, and
• Greater confidence for U.S businesses that their work force is legally documented

Conclusion
I want to end my remarks today by repeating a key point – we consider our partnership with the trade to be a vital component in achieving our dual mission of securing the nation and facilitating the flow of commerce. And we know you share our commitment to achieving these goals. Your presence at this conference is evidence of that fact.

I especially want to thank those of you who participate formally in the process of helping CBP execute its important and challenging mission.

The majority of COAC members are with us today. They decided to schedule their fall meeting this Friday to coincide with the Symposium.

The SAFE Port Act of 2006 resulted in a demanding new agenda for the COAC, as the bill requires official consultation with the COAC on over a dozen supply chain security issues.

I have been enormously impressed with how the COAC has stepped up to this challenge, and you have my deepest gratitude for your dedication and commitment.

In the spring, we will open the application process through the Federal Register for anyone interested in serving on the COAC for its 11th term, which starts in January of 2009.

If you consider applying, be advised it will involve hard work, long hours and no pay – but it will provide the satisfaction of knowing you are helping your country achieve vital national goals.

Many of you also participate in the Trade Support Network and our Trade Ambassadors program.

These groups are directly involved in the complicated and demanding process of helping us design the ACE system, which as I mentioned will soon be the backbone of all our security and trade facilitation efforts. I deeply appreciate the many hours and sophisticated expertise you bring to this work. We could not build ACE without your help.

I look forward to meeting all of you tonight at our gathering in the atrium, and to hearing the results of your discussions over the next two days. I view this year’s Symposium as a celebration of our partnerships, and a commitment to building on those ties in the future to ensure a safe and prosperous America.

Thank you for joining us for this important meeting.