In 2006, the British firm Peninsular and Oriental Steam Navigation Company (P&O) was taken over by Dubai Ports World (DPW).
Such a takeover is pretty common, but there was something different about this one. P&O operated port management businesses at six different major US seaports and DPW is a company based in and owned by the United Arab Emirates (UAE). President Bush approved the deal but there was bipartisan opposition out of fear that the deal would put US ports at increased risk of terrorist attacks. Several prominent politicians including South Carolina Senator Lindsey Graham, New York Senator Hilary Clinton and Illinois Senator Barack Obama voiced their concern over the deal.
The concerns over the DPW went beyond mere anti-Arab tall talk. The United States Coast Guard’s (USCG) intelligence had identified significant security risks because of the intelligence gaps that would exist if the UAE owned company operated as port management. The Coast Guard held these concerns even though the UAE had been a cooperative partner in the “War on Terror” and had been a strategic partner in the wars in Iraq and Afghanistan. Congress moved relatively quickly and passed the SAFE Port Act Pub.L. 109-347. The Act, among other things, changed the Exon–Florio Amendment 50 U.S.C. app 2170 to require the executive branch to perform a 45-day investigation of each foreign investment deal unless the Secretary of Transportation and the head of the lead agency on the transaction jointly agree that there is no threat to national security. Other important provisions require stricter review of container security and foreign port assessments.
On June 28th, 2012, the House passed the SMART Port Security Act H.R. 4251. The Act will, if made law, will make security measures more streamlined and efficient. Specifically, it will reduce redundancies by allowing the Department of Homeland Security to recognize other countries’ Trusted Shipper Programs, in addition to allowing the USCG to recognize other governments’ or organizations’ port security threat assessments. In effect, neutralizes many of the provisions of the SAFE Port Act by allowing the executive branch to recognize another country’s port security measures as sufficient when determining the security measures to take when the vessel reaches a US port.
Under SMART, the United States can rely on the security measures at a UAE managed port in another country if the USCG recognizes their port security threat assessments as sufficient. This in effect, provides no additional security measures than if the US port itself was managed by the UAE. By permitting a UAE managed port in another country to use their port security measures to ensure that vessels coming into US ports are safe, the USCG’s security measures are bypassed and the only additional security measures are performed by the US port manager. The more crucial threat assessments normally performed by the USCG would be bypassed and outsourced to the UAE foreign port. The risk posed by a UAE managed US port that was prohibited under the SAFE Act is now supplanted by a greater risk that could arise under a UAE managed threat assessment permissible under SMART.