Customs-Trade Partnership Against Terrorism

Supply Chain Security Threat -

The Customs-Trade Partnership Against Terrorism (C-TPAT) program is one layer in U.S. Customs and Border Protection’s (CBP) multi-layered cargo enforcement strategy. Through this program, CBP works with the trade community to strengthen international supply chains and improve United States border security.

To enhance communication with its members, C-TPAT routinely highlights security matters for the purpose of raising awareness and renewing Partners’ vigilance, and recognizing best practices implemented to address supply chain security concerns.

The purpose of this C-TPAT Alert, generated in cooperation with BSI Supply Chain Solutions, is to highlight a convergence of factors tied to weakened political stability in Egypt that have significantly increased the threat that terrorist groups will carry out an attack against critical supply chain elements in the country and its surrounding waterways, including the Canal - an artificial waterway connecting the to Gulf of Suez, and then to the Red Sea. The Suez Canal is 163 Km. long; its width varies but it is only 60 meters at its narrowest. The canal is used extensively by modern ships, as it is the fastest crossing from the Atlantic Ocean to the Indian Ocean.

The repeated targeting of container ships and pipelines by terrorist groups in Egypt since July 2013 illustrates their determination to strike the supply chain, while an increase in arms smuggling into the country, including the trafficking of more sophisticated weaponry, underscores the heightened capabilities of these groups in recent months.

Additionally, decreased rule of law throughout Egypt since the ouster of President Morsi has created an extremely unstable security environment in the nation, highlighting the possibility that terrorist groups could exploit supply chains in the country to

perpetrate an attack abroad.

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C-TPAT Alert – Supply Chain Security Threat – Egypt – May 2014

Increased Number and Distribution of Terrorist Attacks - BSI has recorded a significant increase in both supply chain and general terrorist attacks in Egypt since President Morsi was forcefully removed from office on July 4, 2013. The rate of terrorist attacks has increased most significantly in Egypt’s sparsely populated , a large desert expanse separating mainland Egypt from , where more than 300 attacks have occurred since last summer. But attacks have also occurred in , the country’s capital, where at least eight successful terrorist bombings and assassinations have taken place over just the past four months.

In the nine months since President Morsi’s ouster, terrorist groups in Egypt have demonstrated a heightened intent to attack international supply chains in the country. Terrorists in Egypt have not traditionally threatened these types of targets, and this trend represents a worrying development for international supply chain security and the global economy. An attack on a cargo ship transiting the Suez Canal represents the most high-profile and potentially damaging supply chain terrorist attack from a global perspective. Such an attack has the ability to disrupt the approximately eight percent of world trade that passes through the waterway each year. This figure includes nearly 30 million twenty-foot equivalent units (TEUs) of containerized cargo, roughly equal to the amount of freight that transits the world’s largest seaports annually.

In late July 2013, an obscure Islamic jihadist terrorist group known as Al Furqan Brigades claimed responsibility for an alleged rocket attack against a ship in the Suez Canal. The group released a video of the attack the following week, but the Egyptian government and media did not confirm the incident. More notably, Al Furqan Brigades terrorists fired two rocket-propelled grenades (RPG) at the MV Cosco Asia container ship as it was sailing through the Suez Canal en route to Europe on August 31, 2013. Though the Egyptian government maintained that the ship and its cargo suffered no damage as a result of the attack, at least one foreign source indicated that an RPG did strike the ship and tore a hole in one of its containers.

Terrorist groups have attacked other supply chain targets in Egypt in recent months as well. Most notably, another jihadist group known as Ansar Jerusalem (“Protectors of Jerusalem”) has been extremely active in targeting a natural gas pipeline in in the Sinai Peninsula. The pipeline transports gas from the mainland eastward to Israel and to a major cement factory complex with links to the Egyptian military in North Sinai about 30 miles south of the city of El . Terrorists bombed the pipeline twice in 2013 following President Morsi’s ouster and have so far attacked the structure four times in 2014.

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C-TPAT Alert – Supply Chain Security Threat – Egypt – May 2014

In addition to the recent increases in supply chain terrorist attacks in Egypt, BSI has noted both a marked rise in the range of targets attacked by terrorist groups in the country and a strengthening in the capabilities of these groups. In the immediate months following President’s Morsi’s removal from the presidency, terrorist attacks in the country consisted almost exclusively of small arms attacks against soldiers at checkpoints in North Sinai and bombings and assassinations targeting security officials in the Peninsula and occasionally on the mainland.

However, over the past four months, jihadist terrorist groups for the first time threatened to strike civilian targets, bombing a tourist bus in in February and killing three passengers and the bus driver. Terrorists have also carried out increasing numbers of attacks on the mainland, underscored most notably by the bombing of four targets in Cairo, including the headquarters of the Egyptian police services, on the same day in January. The increased capabilities of terrorist groups in Egypt were illustrated most predominantly on January 25, when Ansar Jerusalem released a video purporting to show its members shooting down an Egyptian military helicopter with a man-portable surface-to-air missile. The government confirmed that one of its helicopters had crashed, but it did not state that the incident was caused by a terrorist attack.

Contributing Risk Factors - The significant increase in supply chain and general terrorist attacks in Egypt over the past nine months can largely be attributed to a convergence of factors relating to the persistent state of political instability the country has faced since last July. Most predominantly, political instability since President Morsi’s ouster has significantly weakened rule of law in the country, as military and police forces around the nation largely withdrew to Cairo to support the transitional government. The Sinai Peninsula, which is separated from mainland Egypt by the Suez Canal, has witnessed the most dramatic decrease in security following last summer’s political unrest, contributing to the dramatic uptick in terrorist attacks in this region.

Further contributing to the heightened terrorist threat in Egypt has been a major rise in the smuggling of small arms in the nation. While arms smuggling in the country subsided to some degree from 2012 to 2013 as the Egyptian military regained control of the country following the ouster of President Hosni Mubarak, the most recent troop withdrawal from the Sinai Peninsula has enabled smugglers to increase their activities over the past several months.

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C-TPAT Alert – Supply Chain Security Threat – Egypt – May 2014

Though the illegal arms trade in the Sinai Other supply chain security weaknesses in has historically been dominated by secular Egypt exacerbate the risk that materials anti-government tribesmen, it is very likely used to perpetrate a terrorist attack will be that terrorist groups are playing an imported into the country and highlight the increasing role in facilitating and even possibility that such items may be exported participating in this trade. Israel’s March 5 from the nation to carry out an attack seizure of a load of Iranian long-range abroad. Criminals routinely exploit the rockets that were destined for transport reduced customs checks at Egypt’s 10 free through the Sinai Peninsula to Gaza trade zones, especially those at the ports of demonstrates that anti-Western regimes Said and , to smuggle a variety view security in the Sinai to be so lax that of contraband items, including weapons, they are willing to attempt to smuggle fully illegal drugs, and consumer goods, through assembled rockets overland across the the country. Furthermore, the breakdown of Peninsula. stability in the nation has enabled corrupt officials involved in the supply chain to A number of security weaknesses in the operate with much greater impunity, an supply chain in Egypt exacerbate the risk of issue highlighted in early February when a terrorist attack against or through supply authorities arrested the chairman of a chain elements in the country. Major gaps shipping agency group in in physical security along the Suez Canal for attempting to import 150 kilograms of provide numerous opportunities for heroin into the country aboard a cargo ship. terrorists to easily access the canal itself, as well as smaller boats operating in the Global Supply Chain Terrorism Threat - waterway. Al Furqan Brigades’ video of the The increased threat of terrorism targeting August 31 Cosco Asia attack highlights the supply chains in Egypt in recent months ability of terrorist operatives to access the comes at a time when terrorist groups banks of the canal in order to fire RPGs or throughout the world are increasingly other weaponry at a passing cargo ship. targeting supply chain targets in an attempt International security sources continue to to disrupt global trade and international lament the ease of access to other areas of security. Over the last decade, BSI has the canal as well, such as bridges, passenger identified more than 600 separate acts of ferry terminals, and private boat launches. supply chain terrorism worldwide, with BSI The latter represents an extremely worrying recording an average of approximately point, as smaller boats could be used to one attack per week over the past several carry out a waterborne bombing of a cargo years. The increased proliferation of these vessel similar to the attack on the USS Cole attacks on a global scale underscores the in 2000 or the MV M Star in 2010. An necessity of maintaining proper security attack of this type is much more likely to over international supply chains to protect sink an entire ship, likely causing severe against such disruptions. disruptions to cargo transit through the Suez Canal.

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C-TPAT Alert – Supply Chain Security Threat – Egypt – May 2014

Recommendations - C-TPAT makes the following recommendations to its Partners in light of the current situation in Egypt:

 Re-assess risk factors for shipments originating in Egypt or transiting through Egypt.

 Review current supply chain security protocols to include:

 Minimizing container drop times

 Using C-TPAT certified or compliant carriers and consolidators

 Conducting a robust risk assessment and ensuring chain of custody gaps are addressed

 Using ISO 17712 high security seals beginning at the point of stuffing

 Considering using dedicated containers versus consolidated shipments

 Conducting thorough seven-point container inspections

 Performing or renewing security and threat awareness training for shipping and receiving personnel and encouraging and rewarding suspicious activity reporting

C-TPAT Program

CBP.GOV/CTPAT 1300 Pennsylvania Avenue, NW Washington, DC 20229

(202) 344-1180

[email protected]

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C-TPAT Alert – Supply Chain Security Threat – Egypt – May 2014