SECRETARY CHERTOFF'S MEETING WITH SECRETARY FOR

C O N F I D E N T I A L SECTION 01 OF 03 HONG KONG 001467

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STATE FOR EAP/MCGANN, EAP/CM
NSC FOR WILDER

E.O. 12958: DECL: 04/08/2031
TAGS: PTER PREL PGOV ECON EWWT HK CH
SUBJECT: SECRETARY CHERTOFF'S MEETING WITH SECRETARY FOR
SECURITY AMBROSE LEE AND HONG KONG PORT OPERATORS

Classified By: Consul General James B. Cunningham. Reasons: 1.4 (b,d).

Summary
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1. (C) On March 31, U.S. Department of Homeland Security
(DHS) Secretary Michael Chertoff met with Hong Kong Secretary
for Security Ambrose Lee to discuss the global war on terror.
On April 1, Chertoff visited Hong Kong's ports and met with
terminal operators to discuss maritime security. Secretary
Chertoff said that the U.S. was exploring solutions that
balanced the need to improve maritime security with continued
efficiency of handling and shipping cargo. Technology and
better awareness of supply chain management were key issues.
Public and Congressional pressure demanded increased
security, including screening for radiological materials.
Secretary Lee noted that intelligence sharing with the U.S.

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and other countries enabled Hong Kong authorities to better
monitor its borders so that the terrorist threat in Hong Kong
remained low to moderate. Hong Kong's "smart ID card"
contained biometric data; Hong Kong would start issuing
passports with biometric data in the first quarter of 2007.
Also on April 1, Secretary Chertoff toured Hong Kong's Smart
ID production facilities at Hong Kong Immigration
Headquarters. End summary.

Hong Kong's Terrorism Threat Low to Moderate
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2. (SBU) On March 31, Secretary Chertoff discussed maritime
security, the terrorism threat in Hong Kong, and biometric
travel documents with Secretary for Security Ambrose Lee.
Commissioner of Customs and Excise Timothy Tong, Director of
Hong Kong Immigration T.K. Lai, Assistant Commissioner of
Customs and Excise Chow Kwong, Assistant Director of
Immigration K.C. Chan, and Security Bureau Principal
Assistant Secretary Manda Chan accompanied Lee. Counselor to
the Secretary Adam Isles, DHS Public Affairs Assistant
Secretary Brian Besanceney, DHS Asia/Pacific Director Paul

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Fujimura, DHS/ICE attache Thomas Howe, and econoff
(notetaker) also attended the meeting.


3. (C) Secretary Lee said that Hong Kong was one of the
safest places in the world. The HKG was always vigilant, and
continued to work constructively with the U.S. on counter
terrorism, anti-money laundering, and other activities such
as the Container Security Initiative (CSI). Several reasons
existed for Hong Kong's low to moderate terrorist threat.
First, Hong Kong maintained effective immigration and customs
standards and practices. Hong Kong has successfully
prevented radical groups from entering Hong Kong so no
terrorist infrastructure existed. Second, although Hong Kong
had tens of thousands of second and third generation Muslim
residents from Bangladesh and Pakistan, the HKG has made
efforts to liaise with this assimilated community on a
regular basis and was confident that they were not engaged in
any terrorist activities. Finally, the police have had
excellent intelligence exchanges with overseas counterparts
that have permitted the HKG to remain aware of the terrorist
threats. Hong Kong was not complacent, and the HKG realized
that dangers existed in several countries throughout the
region. Secretary Chertoff warned that the foremost aim of
terrorists was to strike at international commercial
interests and that Hong Kong's role as an international
commercial and financial center would make it a tempting
target. Lee agreed, saying that terrorists would attack "the
weakest link." Hong Kong remained vigilant.

Hong Kong Supports Biometric Data in Travel Documents
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4. (C) The USG has found that fingerprinting at U.S. borders
produced positive results, Secretary Chertoff said. After
fingerprints were scanned, Customs officials could gain
access to previous passport pages used upon entry and compare
them to the present passport. Lee said that "friends from
overseas do not need to submit fingerprints," but the Hong
Kong ID card contained a chip with the bearer's fingerprints.
The HKG planned to issue biometric passports starting in the
first quarter of 2007, shortly before the first passports
issued after the 1997 reversion would start to expire. T.K.
Lai added that the U.S. has provided Hong Kong with an

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excellent face recognition system, which has enhanced its
efforts to keep out illegal migrants. The cooperation
between Hong Kong and the U.S. enhanced international
security since many travelers passed through Hong Kong en
route to an onward destination. Secretary Chertoff viewed
Hong Kong's smart ID card production facilities the following
day.

Maritime Security Must Balance Speed and Security
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5. (C) Secretary Chertoff said that maritime security was the
main issue on his agenda during his Hong Kong visit. He
noted that the next day he would look at the Integrated Cargo
Inspection System (ICIS) at Hong Kong's port, which was a
combination of radiation monitors and x-ray scanning of
containers. The USG was considering whether radiological
monitoring at foreign ports should be required to facilitate
cargo entry into the U.S. Customs Commissioner Tong replied
that the terminal operators were conducting a pilot project
with ICIS, which like the Department of Energy's Megaports
initiative, involved radiological monitors. Tong praised the
efficacy of the Container Security Initiative (CSI). He
expressed concern that under the ICIS model, even if only two
percent of the cargo passing through radiological monitors
triggered an alarm, Hong Kong Customs would have to open and
inspect 180 containers a day, which was not feasible. He
also said that Hong Kong's port operators did not separate
for screening purposes U.S.-bound cargo from cargo bound for
other destinations. Tong suggested that radiological
screening in U.S. ports would therefore be a better solution
than screening in Hong Kong or other exporting ports.


6. (C) According to Secretary Chertoff, the USG did not want
to disrupt port throughput, but Congressional and public
pressure calling for a more absolute approach to port
security could not be underestimated. A more rigorous
screening/inspection regime would replace the existing one.
The U.S. wanted to use technology to get a better level of
information. The U.S. would also strive to convince
governments and port operators of the need for radiological
portals. The U.S. would likely move to a regime where
loading ports that have such equipment would obtain some
level of expedited "green lane-like" clearance through U.S.
Customs. Overseas ports would seek to install such
equipment to maintain the competitiveness of their ports.


7. (C) Next-generation monitors already existed that could
specify the exact isotope in a scanned container, the
Secretary continued. Customs authorities would therefore be

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able to resolve most radiological alarms by looking at the
container's shipping manifest to see if the isotope was
consistent with what was being shipped. Only in the few
cases where a discrepancy existed would Customs need to
physically inspect the cargo. He noted that he met with
Hutchison Port Holdings Chairman Li Ka-shing earlier in the
day. Li was an advocate of radiological monitoring and said
that the radiological portals would be feasible for Hong
Kong. The Secretary added that some in Congress were
advocating that U.S. Customs physically inspect 100 percent
of the containers entering the U.S., which would have a much
more significant impact on container throughput. Secretary
Lee replied that Hong Kong would carefully consider the
various security initiatives and weigh their benefits with
the impact on throughput. Tong added that the U.S. and Hong
Kong could coordinate efforts in the International Customs
Organization's exercise to draw up a framework of standards,
which would result in improved trade facilitation.

Secretary Chertoff Visits Hong Kong's Port

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8. (C) On April 1, Secretary Chertoff viewed the ICIS pilot
project at Modern Terminals and the Hutchison Port Holdings
(HPH)-operated Hong Kong International Terminal (HIT). At
both terminals, operators demonstrated the x-ray and
radiology screening of containers moving through entry lanes
at 17 km/hour. They expressed confidence that 100 percent
screening of containers passing through their terminals is
feasible. The Secretary was concerned about how
transshipments could be screened at Hong Kong's port since
some of the containers might be transferred between boats.

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Modern Terminals Managing Director Sean Kelly said that most
U.S.-bound cargo transited Kwai Chung port, and few
containers actually moved ship to ship without being on land.



9. (C) Kelly noted that terminal handlers could not review
all the ICIS output, but would need government authorities to
do so. Terminal operators could collect the information, but
customs authorities would need to assess what to do with it.
The data could, for example, be sent directly to the U.S. for
real-time review. Protocols on use and levels of inspections
would need to be developed. Terminal operators had a
shared interest with governments in promoting the security of
shipping. Addressing Hong Kong Custom's concerns, he said
that the presence of ICIS equipment did not mean that
inspections of cargo would increase. ICIS, however, provided
additional information so that physical examination of
containers could be better targeted.


10. (C) HPH Group Managing Director John Meredith explained
that Hutchison wanted to work cooperatively with the U.S.
Government to enhance port security. The views of the U.S.
on taking security to the next level will have decisive
impact. In addition to making the case for the ICIS model,
Meredith added that Hutchison was also discussing port
security with the EU, noting that the EU established a
subgroup to study how to strengthen port security and
formulate proposals for the World Customs Organization (WCO).
He noted that some European ports had already installed
radiological portals. The Secretary said that the U.S. would
likely endorse a performance standard for screening for
radiological materials, but would not mandate a proprietary
system.


11. (U) Secretary Chertoff's party has cleared this cable.
Cunningham