How Japan's Anti-terrorist Measures have been Left behind by the Information Revolution.

IZUMIDA Hirohiko
Consulting Fellow, RIETI

About four months after 9/11, on January 17th 2002, bearing in mind the task of individually checking each of the some 16 million cargo containers which are imported into the US every year, Robert Bonner, director general of the United States Customs and Tariffs Bureau, announced the introduction of the Container Security Initiative (CSI). Making use of automatic identification technology, networks and computer systems, security measures which had until now been impossible are being realized. In order to employ the latest information technology in counterterrorist measures, the US promptly conducted reforms of systems and institutional integration of organizations. In addition, aiming for the smooth employment of an information system, the US is strategically carrying out the establishment of an international standard. On the other hand, Japan, while possessing a technological prowess that should see the US looking for co-operation in this field, is unable to utilize this ability strategically, and is thus left stranded behind the rest of the world.

US border protection

Some 90% of the world's cargo trade is container cargo, with each year 16 million containers being freighted, by air, sea, road, and rail to the mainland US. Of that number, 214,000 ships land 5,700,000 containers in the US every year. Given such circumstances, in the wake of the war that the US and Britain have waged upon Iraq without a second UN resolution, the risk of anthrax and other assorted biological weapons, nuclear bombs and the so called weapons of mass destruction being transported to the US in one of these containers is becoming remarkably high. In prevention of such an occurrence, the US is mobilizing all available information technology in a move to deal with the threat.

First of all, there was the consolidation of organizations on January 24th, 2003, when the Department of Homeland Security was launched to deal with all matters pertaining to counterterrorism. Around 170,000 government employees were redistributed from existing government organizations into the newly created department, which was appropriated a budget of approximately 37 billion US dollars, in what was the biggest restructuring of government ministries since the establishment of the Department of National Defense in 1947. Prior to President Bush's televised speech proposing the foundation of the Department of Homeland Security on June 6th, 2002, officials in charge of IT in government-related organizations, Accenture, Electronic Data Systems, IBM, and Sievel Systems, attended a public hearing held in the House of Representatives on February 26th of the same year. Issues brought to the surface here included: incompatible systems hindering intelligence sharing, and a lack of communication and shared intelligence between federal government, states/autonomous districts, and private enterprises, towards the Homeland Security Bureau that the Bush administration established in the wake of 9/11. Fuelled by this regret that information regarding terrorists was not effectively utilized in the past, and wishing to redress this through the accurate use of information and information technology, the Department of Homeland Security was formed. In order to deal with lists of cargo, exporters, importers, the crew, passengers and so on in a unified manner, the Treasury's Customs and Tariffs Bureau, together with the Ministry of Transport's Coast Guard, and the Justice Department's Immigration and Naturalization Service, became integrated in the pursuit of maintaining a cyber-infrastructure. In addition to this they have the ability to absorb vital information from the CIA and the FBI, permitting detailed monitoring of the flow of money, commodity, and people to and from the mainland US. Given the background in which the Department of Homeland Security was established, and its plans for US coastal defense operations, it is only a matter of course that IT should be employed.

Following this, introducing system integration, the US put a number of policy programs through in quick succession - CSI, C-TPAT (The Customs-Trade Partnership Against Terrorism), revision of tariff-related laws (the 24 Hour Rule) - in order to improve the acquisition and analysis of intelligence.

CSI is a security program aimed at imported container cargo. Based on the premise that the process is carried out electronically, in order to deal with the huge number, security criteria to identify high-risk containers is established in this comprehensively appointed government plan whereby a US customs official is sent to the exporting country to perform pre-screening with IT built to perform automatic identification of cargo. Although CSI has its roots in marine cargo, there are plans to expand it to include air cargo as well.

C-TPAT is a voluntary program employed by import-related companies which co-operate with the Customs and Tariffs Bureau by developing their own supply-chain security compliance program in accordance with specific guidelines. If participation is accepted by the Custom and Tariffs Bureau, these companies are then awarded with preferential treatment in the form of fast import clearance and reduced freight inspection. From the point of view of the authorities, by having their finger on the pulse of the participant's supply chain, the bureau can guarantee security smoothly.

The 24 Hour Rule demands the submission to the US of manifestoes (cargo inventory and so forth) 24 hours before export freight is loaded. It is upon these complementing policies that the US strategies against terrorism are built, and what they all have in common is the use of electronic advances capable of dealing with events which cannot be handled by humans.

As regards information systems per se, a profound re-thinking is taking place. In place of the current system for customs clearance (AMS or Automated Manifest System), a new US customs system (ACE or Automated Commercial Environment) [diagram - PDF:22KB] is being developed to start operation in 2006. While the threat of terrorism is being actualized, to ensure the survival of the global economy, ACE is a customs office system being set up to simultaneously solve the somewhat contradictory propositions of: lowering the rate of smuggling and preventing terrorism, yet at the same time radically simplifying trader's import-export procedures without increasing personnel or the government's budget.

Differing from the current online administrative procedures of AMS, ACE is an infrastructure for the storage and analysis of relevant information. Through the sharing of this information between related government offices, efficient operation and accurate security can be guaranteed. Furthermore, this infrastructure of information, which supports the simplification of trade procedure and data exchange, allows restructuring of operations (BPR or Business Process Re-engineering) to be driven forward. This is a design concept in polar opposition to Japan's 'single window system', which is merely an electronic administrative procedure system.

The preservation of security and its economic rationality

The concept behind ACE can be traced back to an act to modernize and simplify the administration of customs laws in 1993. At that time AMS, which had reached the limits of its ability, was being revised, and the basic concept of ACE was developed around the focus placed on increasing the efficiency of private businesses that were closely associated with this administrative procedure. However, as a result of 9/11, out of this basic concept, it was the 'preservation of national security' that got pushed up the order to the number one position. So while at present the concept of ACE is, with prevention of smuggling and measures against terrorism as it primary objectives, to prevent the rise in costs or personnel through a simplification of the distribution of goods and its associated administrative procedures, the content does not differ from the initial phases of the concept design. In fact, in Korea, through the complete computerization of administrative procedures for international maritime traffic and trade, an improvement in security and BPR of private companies are being simultaneously achieved, and the systems merits are being proclaimed by both regulating authority and business alike. This computerization has improved Pusan port's competitiveness in the East Asia region and even saw a dramatic jump in its ranking amongst international ports (based on its share of the world's cargo handled) from 16th in 1980, to 3rd in 2001.

Generally speaking, in order to increase levels of security, a tightening of procedure is necessary, which in turn hinders the smooth flow of trade. However, through information technology, the US border protection operations are designed to simultaneously solve these conflicting themes, and has begun to put into practice these new anti-terrorist measures which still allow the smooth operation of trade.

An image of preservation of security in the near-future

So, just what form will maintenance of container security take in the future? Based on present measures, the following picture can be drawn. [diagram - PDF:70KB]

24 hours before the loading of freight, a cargo manifest is submitted to the country of import. The submitted manifest is added to foreign trade finance information and an import declaration to the government of export, and in this manner through ACE's information system, both exporter and importer, import route, final shipping address, past records and so on are profiled, and high-risk containers can be discriminated. This information is notified to the custom officials dispatched to the exporting country based on CSI, and container checks take place at the point of export using the latest cargo identification technology, including X-Ray, Gamma-Ray Devices, and RFID (Radio Frequency Identification). In the latter instance, the Track and Trace technology which uses RFID can provide consistency with the whole supply chain notified by C-TPAT in an instant. Containers that have been confirmed as safe are then given an electronic seal, which if broken will be automatically recognized and denied landing, bypassing the need for checks by personnel. In addition, low-risk containers transported by those in C-TPAT can be put into a fast-track allowing prompt import clearance. After import of international cargo, by using RFID and ITS (Intelligent Transport System) the content of cargo that is distributed on-shore can be ascertained using the 6 digit HS classification number, which is also of use should an emergency situation suddenly develop. From the business point of view, establishing a computerized infrastructure by the government is desirable: since the openly-disclosed information is standardized, and the exchange of it is centralized, it can be expected that the whole supply chain will become streamlined.

Global trends

The first step in preventing terrorism is the precise control of intelligence. To this end, the exchange of information electronically between foreign governments holds an important meaning. It is necessary for data structures to become common so that the exchange of information regarding cargo takes place smoothly. Even in the case of the comparatively flexible technology XML (Extensible Markup Language), international agreement is required, because the semantics of data elements must be standardized globally for its smooth exchange. Based on the work that the US is aggressively pursuing, the framework for measures against terrorism which employ information technology is being constructed in the international community as a whole. Globally, regionally, within G8, bilaterally, at all these levels the work to create international standards and revise the system (through treaties) is continuing.

More specifically, during the G8 joint declaration of 'Cooperative G8 Action on Transport Security' on June 28th, 2002, "swift work towards the construction of or conduct of a system for container security on a global level," was proclaimed. Also, on October 26th, 2002, "APEC LEADERS' Statement on Fighting Terrorism and Promoting Growth," was issued, and incorporated the putting into practice of: ensuring the security of containers, fast operation, provision of advance electronic information pertaining to the contents of a container, and an international standard for electronic customs declarations. In conforming to these basic principles, the international organizations carried out various system reforms. The World Customs Organization (WCO), through a government-to-government system of information exchange enabling it to smoothly carry out the international standard, formed, "Protocol of Amendment to the International Convention on the Simplification and Harmonization of Customs Procedures." A global version of CSI, or "Draft of The International Convention on Mutual Administrative Assistance in Customs Matters," aiming for acceptance in the assembly of June 2003, is currently mid-reforms. Meanwhile, the International Maritime Organization (IMO), as regards marine transport, has motions: investigating the global practice of the single window concept, reforming SOLAS ( International Convention for the Safety of Life at Sea, 1974) with a view to the employment of electronic seals, and revising the FAL (Facilitation) convention which aims at international standardization of the procedure. At the International Organization for Standardization (ISO), standardization of data elements (TC/204) for the employment of international combined transportation using RFID, and standardization of hardware norms and biometrics technology for identification/ authentication (JTC1/SC31, SC37) are progressing. While at the International Air Transport Association (IATA), the standardization of RFID data structures and hardware norms is also progressing.

I believe that it is through these series of motions that the international community's shared awareness is finally going to converge on the practice of sharing information electronically in the international forum.


Unlike the air-strikes that preceded the Gulf War, in the Iraq War, the US executed simultaneous attacks by land, air and sea. Against this backdrop, the Revolution in Military Affairs (RMA) happened. In the measures against terrorism the US has involved the rest of the world in pushing forward the practical use of IT with a view to streamlining business.

Yet, as the US and other developed nations deal with countries strategically in defense against terrorism, so comes the risk that terrorist attacks may be launched by these same countries. Terrorists aside, in dealing a blow to an opponent, it is not too fantastic to consider a biological or nuclear terrorist attack being aimed at a weak ally. There is concern for the great harm that could be caused by a nuclear explosion in Tokyo harbor, or in the vicinity of the capital itself, while Japan is exercising no safety measures.

In response to the IT revolution, Japan is holding no thoughts of conducting measures against terrorism with the perspective of increasing the efficiency of business, and is caught in a deadlock. Japan's belief in following precedents is strong, making its speed in putting necessary policies into practice slow. While 'excuses' about meeting global trends is fair enough, in guaranteeing safety, strategic thought which maximizes the public welfare of the whole of society and urgent responses are desired.

May 13, 2003

May 13, 2003

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