The sale of
facilities at six U.S ports by a British-based company to Dubai
Ports World, a government-owned company in the United Arab
Emirates, has raised concerns among many in the homeland security
community. While a review of the facts suggest no apparent security
issues, these concerns do reflect the importance of ensuring that
the system created by Congress to review the sale of foreign
investments in the United States is functioning properly. Congress
should take 45 days to review the sale to Dubai Ports World.
Because Congress has not closely reviewed this oversight process
since 9/11, a brief delay is reasonable and warranted.
Not the Issue. That the facilities at six U.S. ports
will be foreign-owned is not significant. These facilities are
already owned by a foreign company, the London-based Peninsular and
Oriental Steam Company. Indeed, much of the maritime infrastructure
(e.g., ships, containers, and facilitates) that supports U.S.
seaborne trade and travel, which accounts for about 1/3 of U.S.
GDP, is already foreign-owned. The globalization of maritime trade
began decades ago, and this sale reflects the continuing
globalization of a sector long-dominated by transnational
of the infrastructure at these ports relates to military or
national security facilities. The Defense Department controls the
facilities that it uses to ship military goods.
Standards Will Not Change. Security standards for ports are
governed by the International Shipping and Port Security (ISPS)
Code, which is based on U.S. maritime laws adopted after 9/11. The
same law applies to any company operating in the U.S., regardless
of its origin.
The U.S. Coast
Guard is responsible for overseeing the implementation of ISPS.
Every U.S. port has a Coast Guard officer who is the Captain of the
Port and is responsible for coordinating all port security. The
Customs and Border Protection agency and the Coast Guard, not the
owner of the port, conduct security screening on individuals and
cargo that enter the port.
Not a Terrorist
Gateway. Dubai Ports World is a holding company, and
it will have little to do with the day-to-day management of these
port facilities. Its ownership alone does not entitle its employees
to access any classified or sensitive security information unless,
as now, they meet the requirements of ISPS and U.S. law. Moreover,
almost all of the employees at these facilities are U.S. citizens.
As well, with over $6 billion invested, no company would want to
see its facilities used by terrorists. Finally, terrorist
tradecraft does not involve high-profile purchases of companies.
Terrorism infiltration, like criminal smuggling, involves
penetration by individuals. That is a challenge for any
The UAE Is an
Ally. Since 9/11, the UAE has provided unprecedented
cooperation to the United States in the war on terrorism, including
finding, arresting, and turning over high-ranking al-Qaeda
operatives and participating in the U.S. Container Security
Initiative to screen cargo bound for the U.S. That Dubai Ports
World is owned by the UAE should reassure Americans.
The Omnibus Trade and Competitiveness Act of
1988 created the Committee on Foreign Direct Investment in
the United States (CFIUS). The Secretary of the Treasury heads
CFIUS, and 11 other agencies participate in it, including the
Departments of Defense, Justice, Commerce, and Homeland Security.
The committee's task is "to suspend or
prohibit any foreign acquisition, merger or takeover of a U.S.
corporation that is determined to threaten the national security of
the United States." The process is designed to be non-partisan and
non-political because these decisions should not be based on
political considerations but solely on the merits of the transfer
and appropriate security concerns. CFIUS reviewed the Dubai
Ports World transaction and did not find any problems.
has the responsibility to ensure that the CIFUS process is being
implemented as it intended. However, Because Congress has not taken
the opportunity to review the CFIUS procedure since its
implementation in 1988, it should take 45 days to review the Dubai
Ports World deal. The country needs confidence in the
procedures meant to ensure that foreign investment does not harm
national security and this reasonable delay for review is the way
to provide it.
Jay Carafano, Ph.D., is Senior Research Fellow for Defense and
Homeland Security, and Alane
Kochems is Policy Analyst for National Security, in the Kathryn
and Shelby Cullom Davis Institute for International Studies at The