VZCZCXRO7031
PP RUEHGH
DE RUEHC #8073/01 1381433
ZNR UUUUU ZZH
P 121302Z MAY 09
FM SECSTATE WASHDC
TO RUEHHK/AMCONSUL HONG KONG PRIORITY 6724/6725
INFO RUEHBJ/AMEMBASSY BEIJING 7855/7856
RUEHGP/AMEMBASSY SINGAPORE 0768/0769
RUEHUL/AMEMBASSY SEOUL 0812/0813
RUEHGH/AMCONSUL SHANGHAI 3899/3900
RUEHLO/AMEMBASSY LONDON 4004/4005
RUEHTG/AMEMBASSY TEGUCIGALPA 4948/4949
RUEHMS/AMEMBASSY MUSCAT 0573/0574
RUEHIL/AMEMBASSY ISLAMABAD 0630/0631

UNCLAS SECTION 01 OF 02 STATE 048073 
 
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: A) HK 733 B) STATE 28824 C) HK 333 
 
STATE 00048073  001.2 OF 002 
 
 
1.(U) This cable is Sensitive But Unclassified. For action requested 
see paragraph 4. 
 
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SUMMARY 
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¶2. (SBU) In response to reftel, which outlines options going forward 
with the Secure Freight Initiative (SFI) pilot program in Hong Kong, 
U.S. Customs and Border Protection (CBP) carefully reviewed both 
options proposed by the Government of Hong Kong.  CBP does not 
support either of the two options: CBP does not favor continuing 
operations under a "pilot"-type agreement nor support shutting down 
the scanning systems during the Government of Hong Kong's internal 
deliberation.  Since these two stipulations could not be overcome, 
CBP and HK Trade and Industry executive management jointly agreed to 
cease maritime container scanning operations at Modern Terminals. 
CBP will work towards removing the scanning equipment to another 
foreign port location, thus concluding a successful 18-month SFI 
project between the U.S. Government (USG), the Hong Kong Government 
(HKG), and Hong Kong's private sector. END SUMMARY 
 
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BACKGROUND 
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¶3. (SBU) Following discussions on April 21st between the Hong Kong 
Government (HKG) and U.S. Customs and Border Protection (CBP), and a 
follow-up discussion between CBP and Trade and Industry Department 
executive management on April 30th, both parties jointly agreed to 
cease maritime container scanning at the conclusion of the pilot 
period, which ended as scheduled on April 30, 2009.  While the Hong 
Kong Government had initially requested to "stand down" operations 
while they consulted with members of the trade on a possible 
extension of the pilot, both parties ultimately determined that the 
full value of the one-lane pilot had been realized and that there is 
no further purpose served by continuing operations.  As a result, CBP 
has begun making the necessary arrangements to decommission the 
equipment and plan for redeployment to a different location that will 
allow an examination of other risk factors. 
 
¶4. (SBU) Action Request: Post is requested to provide the information 
in paragraph 5 to the HKG and Modern Terminals, Ltd., SFI pilot 
operator, as a non-paper.  End Action Request. 
 
 
¶5. (SBU) 
 
-------------------------------------- 
NON-PAPER ON SECURE FREIGHT INITIATIVE 
-------------------------------------- 
 
FUTURE OF SFI IN GENERAL 
 
The United States Government (USG) supports the general goal of 
expanding scanning abroad and has learned some significant lessons 
from current operations in Hong Kong and 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 TERMINALS, LTD. IN HONG KONG 
 
Following discussions between HKG-USG on April 21st and April 30th, 
CBP carefully considered the two options proposed by the Hong Kong 
Government.  CBP does not favor continuing operations under a 
"pilot"-type agreement nor support shutting down the scanning systems 
during the Government of Hong Kong's internal deliberation.  Since 
these two stipulations could not be overcome, CBP and HK Trade and 
 
STATE 00048073  002.2 OF 002 
 
 
Industry executive management jointly agreed to cease scanning 
operations at Modern Terminals as of April 30th.  CBP will work 
towards removing the scanning equipment to another foreign port 
location, thus concluding a successful 18-month SFI project between 
the U.S. Government (USG), the Hong Kong Government (HKG), and Hong 
Kong's private sector. 
April 30, 2009 marked the end of a cooperative agreement between the 
HKG and CBP to conduct a pilot study to scan maritime containers 
under the Secure Freight Initiative utilizing large-scale radiation 
detection and imaging systems.  This study provided valuable 
operational lessons on the technical, logistical and diplomatic 
challenges with scanning maritime containers in a high-volume port 
such as Hong Kong.  As a result, CBP has begun making the necessary 
arrangements to decommission the equipment and plan for redeployment 
to a different location that will allow an examination of other risk 
factors. 
 
CBP greatly appreciates the cooperation and partnership of the Hong 
Kong Government, in particular the Hong Kong Customs and Excise and 
the Trade and Industry Department, in piloting scanning operations 
under SFI at Modern Terminals, Ltd. (MTL).  Through this partnership, 
CBP has learned about the potential impact of a 100 percent scanning 
approach on the trade community and its security value.  CBP and the 
HKG have agreed to continue to work together under the Container 
Security Initiative and explore alternative approaches toward 
enhancing container and trade security through risk management and 
total supply chain security.  CBP looks forward to an exchange of 
ideas with the Hong Kong trade community regarding maritime container 
scanning and any other potential valuable lessons learned during the 
pilot scanning operations in Hong Kong.  CBP will continue to build 
on its excellent relationship with the HKG to enhance and develop 
future security programs in supply chain security. 
 
Given this decision, we would like to coordinate with your government 
to determine whether or not an announcement on the successful 
conclusion of the SFI pilot is necessary and if so, what the text of 
that announcement would say. 
 
End Non-Paper 
 
¶6.  (U) Post's facilitation of this issue has been greatly appreciated. 
CLINTON