James Fallace April, U.S. Department of Homeland Security APRIL, 2010

James Fallace April, Overview o The attacks of September 11, 2001, led to the largest and most complex reorganization of the federal government since the department of defense was created over 60 years ago o The post 9/11 re-organization included the establishment of the U.S. Department of Homeland Security (DHS) o On March 1, 2003 DHS took over operational control of nearly 180,000 employees from incoming agencies and offices, including some 60,000 TSA employees from the Department of Transportation

James Fallace April, Who is TSA? TSA Mission, Vision and Core Values o The Transportation Security Administration protects the Nation’s transportation systems to ensure freedom of movement for people and commerce. o The Transportation Security Administration will continuously set the standard for excellence in transportation security through its people, processes, and technology. o To enhance mission performance and achieve our shared goals with Stakeholders and affiliated Agencies.

James Fallace April, Security Programs and Contingency Plans The Department of Homeland Security has rated the National Threat Advisory Level as Orange.

James Fallace April, Goals o Establish indisputable confidence in our Nation’s transportation system o Secure the Nation’s freedom of movement in the interest of national security, public safety and economic growth

James Fallace April, What we do… Layers of Security We have layers of security to enhance the security of the traveling public and the Nation's transportation system. Each one of these layers alone is a deterrent, capable of deterring criminal acts. In combination their security value is multiplied, creating a much stronger, formidable system.

James Fallace April, Regulatory Division Inspection, Compliance and Oversight o Airports, Aircraft Operators (passenger and cargo), Canine and Surface − conduct inspections, investigations, and outreach to prevent attacks, share best practices, solve problems and ensure compliance 49 Code of Federal Regulation 1540, 1542, 1544, 1546 and 1548 Provide interpretations and clarifications of TSA security procedures and requirements Incident response

James Fallace April, Regulatory Division Monitor threats Provide incident information Make recommendations or implement security procedures as appropriate Seek innovative ways to enhance security by participating in the evaluation, testing and the implementation of new programs Administer legal enforcement actions by means of civil penalties

James Fallace April, Regulatory Division-Cargo 19 CARGO INSPECTORS AIR CARRIERS, TSA APPROVED INDIRECT AIR CARRIERS, CERTIFIED CARGO SCREENING FACILITIES PERFORM COMPREHENSIVE AND SUPPLEMENTAL INSPECTIONS JFK AREA OF RESPONSIBILITY INCLUDES: 78 AIR CARRIERS TO INCLUDE BOTH PASSENGER AND ALL CARGO OPERATIONS 662 TSA APPROVED INDIRECT AIR CARRIERS 63 TSA APPROVED CERTIFIED CARGO SCREENING FACILITIES

James Fallace April, Regulatory Division-Cargo Participates in “Cargo Strikes” which is a national effort in airports throughout the US Conducts Special Emphasis Inspections (SEI) or tests periodically focusing on a particular aspect of a regulated entities operation Participates in “Town Hall” meetings providing updates to industry on changes to regulatory programs

James Fallace April, Certified Cargo Screening Program Non-SSI Presentation

12 NOTIONAL – FOR DISCUSSION PURPOSES ONLY Version % Screening Requirement Background  The legislation mandates 100% screening by August 2010 and requires TSA to: –Establish a system to screen 100% of cargo transported on passenger aircraft. –Provide a level of security commensurate to that of passenger baggage. –Meet inspection benchmarks.  President Bush approved Implementing Recommendations of the 9/11 Commission Act of 2007 on August 3, % February % August 2010 August /11 Act Congressionally Mandated Cargo Screening Benchmarks

13 NOTIONAL – FOR DISCUSSION PURPOSES ONLY Version 3.0 ~15 million pounds moves on PAX daily. 100% Screening Requirement  All cargo must be screened at the piece level by TSA-approved methods prior to being loaded on a passenger aircraft.  Screening capacity at a single point in the supply chain is not sufficient enough to accomplish this requirement.  Significant carrier delays, cargo backlogs, and transit time increases are expected. Impacts Cargo must be broken down to piece level and screened by piece. August % Screening Required by Congress

14 NOTIONAL – FOR DISCUSSION PURPOSES ONLY Version 3.0 Piece Level Cargo  Piece level cargo is the individual item within a shipment. The number of pieces is determined by the number of pieces identified by the shipper-level documentation.  By February 3, 2009, all cargo must be broken down and 50% of the individual pieces must be screened prior to being loaded on a passenger aircraft.  By August 3, 2010, cargo must be 100% screened at the piece level.

15 NOTIONAL – FOR DISCUSSION PURPOSES ONLY Version 3.0 Risk Assessment Future Air Cargo Supply Chain CCSF: Shipper / 3PL / Manufacturer Air Carrier Freight Forwarder CCSF: Freight Forwarder **Screening Freight Forwarder Known Shipper **Screening 100%Screened Notes: **Screening must occur prior to consolidation. Screening methods: electronic, manual, and canine. Passenger Aircraft 15% All-Cargo Aircraft 85% United States Air Cargo Distribution by Weight* Ensure chain of custody In the future, screening responsibility will be allocated across the supply chain.

James Fallace April, Certified Cargo Screening Program

17 NOTIONAL – FOR DISCUSSION PURPOSES ONLY Version 3.0 Certified Cargo Screening Program Overview CCSP was developed to:  Allow screening of cargo early in the air cargo supply chain by a trusted, vetted, and audited facility.  Establish the integrity of a shipment through enhanced physical and personnel security standards at Certified Cargo Screening Facilities (CCSFs).  Maintain the integrity of a shipment throughout the supply chain by utilizing stringent chain of custody methods. Participation in CCSP is voluntary, but once in, CCSFs must:  Adhere to increased TSA-directed security standards.  Share responsibility for supply chain security.  Employ chain of custody.  Permit onsite validations.  Submit a Facility Security Plan (FSP).  Be subject to TSI-C inspections. The Certified Cargo Screening Program (CCSP) is a facility based program.

18 NOTIONAL – FOR DISCUSSION PURPOSES ONLY Version 3.0 What is a regulated entity?  A regulated entity is an entity that TSA has imposed mandatory requirements on through an order, regulation, or other means to impose binding and enforceable requirements. Regulations are first published in the Federal Register and codified in the Code of Federal Regulations (CFR).  Certified Cargo Screening Facilities (CCSFs) will need to be regulated: –To count CCSF cargo as screened. –To enable compliance to be enforced. Newly Regulated Entities: CCSFs Shippers, Manufacturers, Warehouses, Third Party Logistic Companies

19 NOTIONAL – FOR DISCUSSION PURPOSES ONLY Version 3.0 Who can become a Certified Cargo Screening Facility? Facilities screening under the CCSP will be known as Certified Cargo Screening Facilities (CCSFs).  Facilities currently applying to become Certified Cargo Screening Facilities:  Independent facilities may emerge to screen cargo for other entities.  Any entity with a desire to screen cargo must have a secure facility.  CCSFs must be no more than one node back from a currently regulated entity (freight forwarder/air carrier).  Facilities that are not currently regulated by TSA will become regulated under the program. Shipping Facilities Freight Forwarding Facilities Third Party Logistics Providers Manufacturing Facilities WarehousesDistribution Centers

James Fallace April, CCSP Standards

21 NOTIONAL – FOR DISCUSSION PURPOSES ONLY Version 3.0 CCSP Program Standards  During Phase One: –Non-regulated entities will operate under a regulatory Order issued by TSA. –Freight forwarders and air carriers will operate under Alternate Procedures (APs) to their standard security programs (SSPs).  At full rollout, all CCSFs will operate under the Certified Cargo Screening Standard Security Program (CCSSSP). Certified Cargo Screening Standard Security Program MSPMSP IACSSPIACSSP AOSSPAOSSP ORDERORDER FACAOSSPFACAOSSP

22 NOTIONAL – FOR DISCUSSION PURPOSES ONLY Version 3.0 Operational Process Flows  The diagram below is a conceptual example of a general operational process flow at a CCSF. Shipper’s Compliance Responsibility Access Control Area TSA-approved Chain of Custody Freight Forwarder’s Compliance Responsibility

23 NOTIONAL – FOR DISCUSSION PURPOSES ONLY Version 3.0 CCSP Benefits CCSP:  Decreased log jams (carrier delays) and expedited supply chain flow.  Ability to build bulk configurations.  Ability to continue to ship certain cargo types without potential invasive screening later on in the chain.  Implement facility and chain of custody standards*.  Facility audits.  The benefits of participating in the Certified Cargo Screening Program may outweigh costs carried by the facility in meeting program guidelines. CCSF Benefits CCSF Costs *Facility Standards include physical access controls, personnel, procedural, physical, and information technology security.

James Fallace April, Q & A Additional questions may be ed to

James Fallace April, Questions?