March 13, 2006 | WebMemo on Department of Homeland Security

Port Security and Port Sales: An Action Plan for Congress

The sale of a British-based company that controls cargo handling operations at a number of U.S. port facilities to Dubai Ports World, a government-owned company in the United Arab Emirates, has raised many concerns. While the deal has since been modified-Dubai Ports World has agreed to transfer all of its U.S. operations to a domestic firm-a review of the facts suggests that there were no apparent security issues. Still, concerns over the deal reflect the importance of ensuring that the U.S. government is looking after Americans' safety and security. Congress should take this opportunity to amend current laws to strengthen oversight of foreign-owned critical maritime infrastructure.

 

Rules of the Sea

The Maritime Transportation and Security of Act (MTSA) of 2002 was passed after the 9/11 attacks to provide uniform standards for port security. However, MTSA did not consider the sale of maritime infrastructure to or between foreign-owned firms operating at U.S. ports. Congress should consider revising the law in several ways:

  • Require that facility security officers at U.S. ports be U.S. citizens and pass a suitable background investigation;
  • Require a mandatory review of foreign buyers' security plans by the Coast Guard prior to the transfer of ownership and notice afterwards of any proposed changes to those plans;
  • Require firm commitments from foreign buyers to assist law enforcement in investigating activities related to the buyer's operations; and
  • Establish penalties for non-compliance.

Evaluating Foreign Investments

The law governing the Committee on Foreign Investments in United States (CFIUS), composed of representatives from the 12 federal agencies that examined the sale to Dubai Ports World, has not been reviewed by the Congress since 9/11. Changes can be made in the law to ensure that the CFIUS process adequately addresses homeland security concerns. These might include:

 

  • Providing agencies participating in CFIUS statutory authority to negotiate commitments to address national security concerns, making the commitments binding under law, and establishing penalties for non-compliance;
  • Requiring the Department of Homeland Security, the Department of Defense, and the Department of Justice to rule jointly on all transactions with significant national security interests (Current law requires a consensus of the whole committee.);
  • Adding homeland security to the list of security issues to be considered by CFIUS; and
  • Establishing specific reporting requirements to Congress.

A Maritime Security Opportunity

Citizens need confidence in the procedures meant to ensure that foreign investment does not harm national security. Congress should act now to strengthen existing law to provide Americans this assurance.

 

James Jay Carafano, Ph.D., is Senior Research Fellow for National Security and Homeland Security in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation.

About the Author

James Jay Carafano, Ph.D. Vice President for the Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy, and the E. W. Richardson Fellow