U.S. DELEGATION BRIEFS HKG ON PROPOSED HONG KONG

C O N F I D E N T I A L SECTION 01 OF 03 HONG KONG 004473 SIPDIS SENSITIVE SIPDIS STATE FOR EAP/CM STATE FOR EAP/TRA/OTP DAYTON/MILLER STATE FOR ISN LEHRMAN/INGRAM STATE FOR EAP/EX CHRISTENSEN DOE NNSA FOR HUIZENGA/FINK/MUSTIN DHS CBP FOR FUJIMURA/HORTON/WHITE E.O. 12958: DECL: 11/15/2026 TAGS: ECON EWWT HK PREL SUBJECT: U.S. DELEGATION BRIEFS HKG ON PROPOSED HONG KONG PARTICIPATION IN PHASE I OF ICSN Classified By: Deputy Principal Officer Marlene Sakaue, reasons 1.4 b and d. ¶1. (C) Summary: Officials from the U.S. Departments of Homeland Security and Energy met with Hong Kong Government officials November 6 to explore Hong Kong's participation in the International Container Security Network (ICSN). Dave Huizenga, Deputy Assistant Secretary, International Material Protection, Department of Energy and Todd Horton, Chief, Assessments Division, Container Security Initiative, Customs and Border Protection, Department of Homeland Security, asked the HKG to participate in a "limited capacity under Phase I" of the ICSN. Huizenga stated that the HKG would have to commit to electronically transmitting data for all U.S.-bound containers passing through Modern Terminal's system and resolving all system alarms if the USG is to designate HKG/Modern Terminal as a "limited capacity Phase I" participant. Explaining that DHS Secretary Chertoff planned to make an announcement on SIPDIS November 27 regarding the Port Security Act and foreign ports' participation in the ICSN, Huizenga proposed that the two sides work on language, acceptable to the HKG, that Chertoff might use in making his announcement. Commerce, Industry and Technology Bureau Deputy Secretary and Head of the HKG delegation Christopher Wong stressed that he viewed this meeting as a fact finding session. He stated that he had neither the authority to agree on Hong Kong's behalf to participate in the ICSN, nor to agree to language that Chertoff might use in his November 27 announcement. Wong said that his delegation would report the contents of the meeting to higher levels and the HKG would conduct a detailed assessment in light of the information shared at this briefing. Noting that Chertoff's announcement was scheduled for November 27, Wong asked if the USG would consider announcing that "the HKG is positively considering the ICSN program, but has not yet confirmed its participation," if the HKG could not confirm its participation by November 27. End Summary. ¶2. (C) Commerce, Industry and Technology Bureau Deputy Secretary and Head of the HKG delegation Christopher Wong SIPDIS thanked Huizenga and members of the U.S. delegation for traveling to Hong Kong to brief the HKG on the newly passed U.S. Port Security Act of 2006 and to discuss Hong Kong's role in the International Container Scanning Network (ICSN). Wong stated that the HKG considered this meeting a "fact finding" session, so that the HKG could conduct a detailed assessment of the ICSN program and to make a decision on HKG's participation. ¶3. (C) Over the course of nearly three hours, Huizenga presented the key points of the ICSN, stressing the partnership between DHS and DOE; both Departments want to be responsive to U.S. Congress' intent in the Port Security Legislation of 2006. Huizenga explained that the Port Security Act requires DHS and DOE to designate three foreign ports as ICSN pilots within 90 days of passage of the Act, which was signed into law on October 13. The designated pilot ports must, within a year, perform radiation scanning and x-ray imaging for 100% of U.S.-bound containers and data from those scans must be passed electronically to U.S. personnel. The USG recognizes the efforts of Hong Kong's Modern Terminal and Hutchison International Terminal in deploying private sector developed integrated container scanning and imaging systems; however, the volume of containers transiting Hong Kong's Port makes it unrealistic to try to equip Hong Kong to scan 100% of U.S.-bound containers within the next year. Therefore, the USG was not seeking HKG's agreement to be designated as a ICSN Phase I pilot port. Still, the USG wants to recognize the progress that Hong Kong is making in developing and deploying an integrated scanning system and wants to partner with the HKG to continue efforts to develop an integrated system. Huizenga said that Hong Kong could participate in a "limited capacity under Phase I," which would acknowledge Hong Kong's efforts to utilize an integrated scanning system, but would not require Hong Kong to meet the requirement to scan 100% of U.S.-bound containers, as will be the case for the three ports designated as ICSN Phase I pilot ports. HONG KONG 00004473 002 OF 003 ¶4. (C) Huizenga explained that the USG would like to work with Hong Kong's Modern Terminal, as it has an integrated scanning system in place. Huizenga stated that the HKG would have to commit to electronically transmitting data for all U.S.-bound containers passing through Modern Terminal's system and resolving all system alarms in order for the USG to designate HKG/Modern Terminal as a "Limited Capacity Phase I" participant. ¶5. (C) Huizenga also highlighted two operational-level problems that currently require resolution at Modern Terminals integrated scanning site: 1) The radiation scanning equipment is currently sitting on a concrete roadway that has granite aggregate that emits high levels of background radiation. This radiation affects the radiation equipment and the roadway would have to be replaced with a non-radiation emitting roadway; 2) Communications between Modern Terminal's integrated scanning system and U.S. CSI personnel both at the Port and in the United States would have to be improved to allow for electronic transfer of scanning data. Additionally, the data transfer software would have to be revised to permit the segregation of U.S.-bound container data from data of containers not bound for the United States. ¶6. (C) Huizenga told the HKG officials that DHS Secretary Chertoff plans to make an announcement on November 27 regarding the implementation of the Port Security Act and participation of foreign ports in Phase I of the ICSN. He stated that Chertoff would like to announce Hong Kong's participation in the ICSN rollout. He proposed that the two sides work on language that Chertoff might use in making his announcement. ¶7. (C) The HKG officials engaged the U.S. delegation in detailed discussions of the ICSN program and Hong Kong's participation. On November 3, in preparation for the November 6 meeting, the HKG had submitted a list of 17 written questions to the U.S. delegation. The HKG also asked a series of oral questions. The questions, which Huizenga and Horton addressed in detail during the November 6 discussion, dealt with core issues such as: -Differences between the MegaPorts initiative and the ICSN program. -USG and HKG responsibilities under the ICSN program. -Utilization of private sector vs. USG-provided equipment. -Requirements/procedures for resolving alarms. -Resource requirements including funding and personnel. -Models/options for expansion of Hong Kong participation in the ICSN program. ¶8. (C) In the course of the discussion, several issues emerged as concerns for the HKG officials: -The requirement to provide data on 100% of U.S.-bound containers, which the HKG officials characterized as the wholesale sharing of data, which entailed a new dimension that the HKG must carefully consider. -The requirement to resolve all alarms. -The safety of the scanning equipment, specifically for truck drivers passing through Non-Intrusive Imaging scanners. -The possibility of replacing the current equipment deployed at Modern Terminal with USG-provided equipment. -Preferential treatment ("Green Lane") for containers scanned in Hong Kong when they arrive in the United States. -The possibility that one terminal operator, Modern Terminal, would acquire preferential treatment over Hong Kong's non-ICSN participants. -The shift from participating in a voluntary effort to develop and deploy an integrated scanning system to a program that called for the HKG to meet USG stipulated requirements. -How to scan containers in mid-stream operations (containers that are transferred directly from one ship to another without going ashore). ¶9. (C) Huizenga explained that, should the HKG agree to participate in a "limited capacity under Phase I" of the ICSN program, the two sides would have to draft/finalize an Agreement, containing the HKG's commitment to share data on all U.S.-bound containers and to resolve all alarms. There was flexibility with regard to the form of such an HONG KONG 00004473 003 OF 003 agreement: a MegaPorts-style Memorandum of Understanding would not be necessary. For example, the two sides could prepare an addendum on the existing U.S. - Hong Kong CSI Agreement. Were Hong Kong's participation in the ICSN program to evolve, with the USG providing equipment of substantial value, however, the two governments would have to come to a more formal, detailed agreement. ¶10. (C) Deputy Secretary Wong thanked the U.S. delegation for the detailed briefing. Wong stated that he did not have the authority to agree on Hong Kong's behalf to participate in the ICSN, nor was he in the position to agree to language that Chertoff could use in his November 27 announcement. Wong said that the inter-Bureau Hong Kong delegation would report the results of the meeting to higher levels and conduct a detailed assessment in light of the information shared at the briefing. Noting that Chertoff's announcement was scheduled for November 27, Wong asked if the USG would consider announcing that "the HKG is positively considering the ICSN program, but has not yet confirmed its participation," if the HKG could not confirm its participation by November 27. Wong promised to review the matter and respond to the USG. ¶11. (SBU) Delegation Lists: ¶A. Hong Kong Delegation: -Christopher Wong - Deputy Secretary for Commerce, Industry and Technology -David Leung - Principal Assistant Secretary for Commerce, Industry and Technology -Fung Kwok Ming - Chief Assistant Secretary (Ports Maritime and Logistics),Economic Development and Labor Bureau. -Ko Chi Lok - Assistant Commissioner (Boundary and Ports) Customs and Excise Department -Li Chun Fai - Senior Superintendent (Ports and Maritime Command) Customs and Excise Department -Erica Ng - Assistant Director General (Americas),Trade and Industry Department -Amy Wong - Principal Assistant Secretary for Security, Security Bureau -Noel Tsang - Assistant Secretary for Commerce, Industry ¶B. U.S. Delegation: -Dave Huizenga - Deputy Assistant Secretary, International Material Protection, Department of Energy. -Todd Horton - Chief Assessments Division, Container Security Initiative, Customs and Bureau Protection, Department of Homeland Security. -Marlene Sakaue - Deputy Principal Officer, U.S. Consulate General Hong Kong -Mike Fink - MegaPorts Project Manager for Asia, Department of Energy -Craig Reilly - Economic Officer, U.S. Consulate General Hong Kong -Richie Powell - Senior CBP Representative, U.S. Consulate General Hong Kong -Matt Myers - ICSN IT Specialist, Customs and Border Protection, Department of Homeland Security ¶12. This report cleared by the U.S. Head of Delegation DOE DAS Huizenga. DHS delegates did not have the opportunity to clear this report. Cunningham