By  on May 28, 2008

WASHINGTON — Despite improved U.S. port security and container inspections, holes in the system might be exploited by terrorists, according to a report by Congressional investigators released Tuesday.

The Government Account-ability Office study focused on a program that allows companies to certify the security of their supply chain based on certain guidelines in order to speed processing. The report said there had been advancements at the ports but found flaws in government verification of the practices of firms enrolled in the Customs-Trade Partnership Against Terrorism initiative, known as C-TPAT.

C-TPAT is administered by the Department of Homeland Security and its U.S. Customs & Border Protection unit, which agreed with most of the GAO's findings and recommendations.

"Every time responsibility for cargo in containers changes hands along the supply chain there is the potential for a security breach," the report said. "Thus vulnerabilities exist that terrorists could exploit."

One example given was the possibility that weapons of mass destruction could be shipped into the U.S. in a container, which is not known to have happened, the report said.

C-TPAT is a voluntary program, and achieving security certification streamlines the search process at the ports and other points of entry for goods into the U.S. Benefits include reduced inspections, priority processing or front-of-the-line border access.

The investigators recommended that Customs step up security equipment and procedures, as well as establish performance measures for supply chain security improvements.

The report acknowledged that Customs had taken steps to work with importers in improving supply chain security, but added that it is important to also "maintain adequate internal controls to ensure that member companies deserve these benefits." A GAO report in 2005 also found that many enrolled companies were not adequately being vetted before receiving the C-TPAT benefits.

Textile and apparel importers have been involved in the C-TPAT program since its inception in 2002 and many feel that they are better able to ensure the safety of their supply chain than a third party.

"Security is stronger if companies are responsible for validating and maintaining their own security," said Julia Hughes, senior vice president of international trade at the U.S. Association of Importers of Textile & Apparel. "In many ways, it's a stronger measure when it's a company's own reputation on the line versus a secondhand review."

Last year, the C-TPAT program involved 7,948 companies that accounted for about 30 percent of all U.S. imports. A significant number of the companies were textile and apparel importers, including major retailers and apparel manufacturers, such as Gap Inc., Sears Holdings Corp., Limited Brands Inc., Liz Claiborne Inc. and J.C. Penney Co. Inc. More than 11 million containers were off-loaded at U.S. seaports in 2007, according to the report.

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