VZCZCXRO2307
PP RUEHGH
DE RUEHC #8824/01 0861433
ZNR UUUUU ZZH
P 252003Z MAR 09
FM SECSTATE WASHDC
TO RUEHHK/AMCONSUL HONG KONG PRIORITY 6470/6471
INFO RUEHBJ/AMEMBASSY BEIJING 6736/6737
RUEHGP/AMEMBASSY SINGAPORE 0415/0416
RUEHUL/AMEMBASSY SEOUL 0352/0353
RUEHGH/AMCONSUL SHANGHAI 3765/3766
RUEHLO/AMEMBASSY LONDON 3033/3034
RUEHTG/AMEMBASSY TEGUCIGALPA 4715/4716
RUEHMS/AMEMBASSY MUSCAT 0299/0300
RUEHIL/AMEMBASSY ISLAMABAD 9725/9726

UNCLAS SECTION 01 OF 02 STATE 028824 
 
SENSITIVE, SIPDIS 
 
C O R R E C T E D C O P Y  (ADDED CAPTION) 
 
FOR ECON, DHS 
 
E.O. 12958: N/A 
TAGS: EWWT KHLS ETRD ETTC PARM PREL PTER HK
SUBJECT: RESPONSE RE: SECURE FREIGHT INITIATIVE IN HONG KONG 
 
REF: HK 333 
 
STATE 00028824  001.2 OF 002 
 
 
1.(U) This cable is Sensitive But Unclassified. For action requested 
see paragraph 3. 
 
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SUMMARY 
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2.(U) In response to HKTID questions about U.S intentions for the 
Secure Freight Initiative (SFI) in Hong Kong (reftel), the USG wants 
to continue the partnership with Hong Kong and the Secure Freight 
Initative pilot at Modern Terminal for at least an additional six 
months beyond April 30 in order to better address the issues raised 
in reftel. 
 
3.(U) Action Request:  Post is requested to provide the information 
in paragraph 4 to the HKSAR and industry partners as a nonpaper, and 
seek concurrence for SFI to continue.  Post feedback on the 
alternative options in paragraph 5 is also requested.  NB:  The 
options in paragraph 5 are not to be shared outside the USG at this 
time.  End Summary. 
 
        ------------------------------------- 
4.(U)  NON-PAPER ON SECURE FREIGHT INITIATIVE 
        ------------------------------------- 
 
FUTURE OF SFI IN GENERAL 
 
The U.S. Governement (USG) supports the general goal of expanding 
scanning abroad and has learned some significant lessons from current 
operations in Hong Kong and the other locations. As expected, these 
Secure Freight Initiative (SFI) pilots have presented numerous 
challenges (financial, logistical, diplomatic, and technical) that 
the USG is working to address.  USG is finalizing an expansion plan 
for future SFI deployments with the goal of maximizing security 
benefits while minimizing disruptions to foreign port operations and 
the global supply chain.  USG is committed to working closely with 
the trade community, industry, and foreign partners once the details 
of this strategy have been finalized. 
 
SFI AT MODERN TERMINAL IN HONG KONG 
 
Extending the pilot in Hong Kong for at least an additional six 
months will allow CBP to The extension of the pilot would allow CBP 
to continue testing the feasibility of integrated scanning and offer 
opportunities to address past technical challenges, most notably 
systems performance.  Addtitional time for testing will provide the 
USG access to invaluable data needed to resolve current and future 
technical challenges found at high-volume, transshipment ports such 
as Hong Kong and further assess the feasibility of 100% scanning at 
such ports. 
 
CBP has made a large investment to meet its commitment and ensure 
that the SFI systems deployed in Hong Kong perform consistently and 
with minimal impact to port operations.    Regrettably, the time 
required to achieve this standard took longer than anticipated as 
necessary equipment modifications were not finalized until February 
¶2009.  The total USG investment in Hong Kong is estimated at USD 4.5 
million. 
 
During bilateral discussions on April 25, 2008 between the USG and 
Hong Kong Special Administrative Region (HKSAR) Government concerning 
cooperation under the SFI, it was mutually agreed that the scanning 
systems in use were in need of upgrading. 
 
In September 2008, Customs and Border Protection (CBP) purchased the 
Integrated Container Inspection System (ICIS) from Science 
Application International Corporation (SAIC) for USD 1.2M with 
upgrades to allow for more accurate data collection and reduce system 
downtime. 
 
Upgrades included exchanging the Vehicle and Cargo Inspection 
System(VACIS) source, upgrading internal and external systems 
components, and conversion to a fiber optic data-line with a greater 
capacity to manage and transmit larger data files produced by the 
 
STATE 00028824  002.2 OF 002 
 
 
system.  These upgrades were completed in February 2009. 
 
The Implementing Recommendations of the 9/11 Commission Act ("9/11 
Act") of August 2007 mandates that a container loaded on a vessel in 
a foreign port shall not enter the United States unless that 
container is scanned by Non Intrusive Inspection (NII) and radiation 
detection equipment before loading onto the vessel by July 12, 2012. 
 
CBP will be responsive to the legislative requirements of the 9/11 
Act.  Ending scanning operations in Hong Kong would pose a 
substantial setback towards identifying possible solutions to the 
complex challenges of scanning containerized cargo in transshipment 
and high-volume ports as well as meeting the legislative 
requirements. 
 
End Non-Paper 
 
------------------- 
ALTERNATIVE OPTIONS 
------------------- 
 
¶5.  (SBU) The Non-paper above represents CBP's preferred option based 
on three related to Hong Kong.  The other two are presented below for 
post feedback in order of preference.  They are not to be shared 
outside the USG at this time. 
 
¶6. (SBU) PARTNER DIRECTLY WITH THE TERMINAL OPERATOR:  In partnering 
directly with the terminal operator, Modern Terminal would provide 
all scan data for U.S. Bound containers directly to CBP.  In return, 
CBP would work directly with Modern Terminal in adjudicating any U.S. 
bound containers as well as providing information on alarming 
non-U.S. bound containers.  The Government of Hong Kong would 
knowingly not participate with the continuation of the pilot and 
would be notified only if there is a neutron and/or a high-gamma 
alarming container.  This option would revert back to the original 
setup prior to concluding agreements with the Hong Kong government on 
SFI. 
 
¶7. (SBU) REMOVE ALL ICIS EQUIPMENT:  If the Hong Kong Special 
Administrative Region Government is unwilling to continue the pilot 
with direct participation or allow CBP and Modern Terminal to 
partner, CBP would remove all ICIS equipment and transfer to another 
port for scanning operations.  End Alternative Options. 
 
¶8. (U) Post's feedback on Hong Kong's response to continuing SFI, 
including points of contact within industry and the HKSAR, would be 
appreciated along with post's reaction to the proposed alternatives. 
CLINTON