How the market can undermine terrorism

By Jay Cohen and Barry Blechman, Special to CNN

Editor’s note: Jay Cohen (RADM, USN, Ret.) is a principal at Chertoff Group. Barry Blechman is a distinguished fellow at the Stimson Center. They are chair and vice chair, respectively, of Stimson’s Partners in Prevention Task Force, which released its final recommendations on May 29. The views expressed are their own.

On October 29, 2010, airplanes carrying two unremarkable packages left Yemen. Were it not for an eleventh-hour intelligence tip, the bomb inside each parcel, disguised by al Qaeda in the Islamic Maghreb as a printer cartridge, likely would have continued to evade standard security checks and detonated over the eastern United States.

Despite its frantic search for a quick fix to prevent similar incidents in the future, the U.S. government surprised many by foregoing immediate regulatory action. Instead, it collaborated with the major express air delivery companies to enhance sharing of security information without hampering legitimate trade.

The result of those discussions – the Air Cargo Advance Screening regime – highlights one of the many ways government and industry can work together to create a successful solution to the challenge of maintaining security in a global economy. At once, globalization has opened opportunities for billions of people, but it has also empowered criminals and terrorists on a worldwide scale. Unfortunately, nearly four years after the cargo plane plot, many critical security gaps that take root in modern global trade remain.

Public and private interests alike face a genuine threat from criminals taking advantage of supply chains for illicit activities. Drugs, nuclear materials and many other forms of contraband are smuggled through the same infrastructure that powers legitimate, modern global trade. Not even the most well-resourced law enforcement and intelligence efforts can keep pace in this environment. Instead, government and industry must work together to develop a range of mutually beneficial approaches to confront the different ways market dynamics affect security challenges today. Correctly applied, these measures will create a marketplace of action that undermines terrorism and related transnational crimes.

And fixing current security gaps won’t require a legislative overhaul or rolls of government red tape – well-coordinated industry measures and modest regulatory changes can go far in advancing the security goals of government as well as U.S. economic competitiveness.

Now is an opportune moment to act, and the intersection of security concerns with the interests of leading U.S. exporters is the place to start. This would build on the momentum of several of the Obama administration’s priorities that industry is watching closely. These include major reforms to U.S. exports of “dual-use” goods and technologies – those with both commercial and military applications. It also includes the National Export Initiative, a distinct effort to promote U.S. exports generally that recently entered a new phase dubbed “NEI/NEXT.”

So how might a new marketplace of action support important initiatives like these?

Government and industry should work together toward a system in which U.S. exporters following a checklist of government-recognized best practices become eligible for broader export and trade opportunities. This would allow government to focus its limited attention and resources on exports that pose the highest security risk, while incentivizing enhanced due diligence practices throughout industry to vet questionable clients. The result would be a system that reduces the likelihood that potentially dangerous technologies fall into the wrong hands.

Information sharing is another area ripe for improvement. Multiple layers of export controls and sanctions often leave even the best-intentioned company wondering whether it is living up to the letter of the law. In many cases, such ambivalence causes companies to pass on business opportunities they would have acted on in a less ambiguous regulatory environment. As such, a better two-way flow of information on issues related to trade and technology transfer could clarify ambiguities in current regulations and help firms avoid risky transactions that may harm their bottom line – either directly or through damage to their brands.

Congress can play a role in these efforts by extending the Terrorism Risk Insurance Program. The program realigns government and industry incentives to enhance both national security and economic competitiveness. Extending the program in the short-term and studying ways to improve it in the long-term will be a major step forward in anti-trafficking efforts.

Let there be no mistake: traditional law and regulation will remain vital to our security for the foreseeable future, but on their own they won’t suffice. Detecting and disrupting illicit trade today demands the concerted effort of government and the private sector. Government must not wait for a tragedy – or a near-miss – to adopt more pragmatic policy that closes existing security gaps. Working with industry, it has within its reach new tools to detect, reduce and prevent incidents of terrorism and illicit global trade.