By Andrzej Zwaniecki
Washington File Staff Writer

Washington -- President Bush has signed a law that expands U.S. Coast Guard law-enforcement authority without subjecting foreign ships to new security requirements.

In an August 9 prepared statement, Bush said that the Coast Guard and Maritime Transportation Act of 2004 will facilitate navigation and shipping and strengthen the security of maritime transportation.

Both chambers of Congress passed in July the $8.2 billion legislation. The compromise bill had emerged following months of negotiations in a House of Representatives-Senate conference.

The law allows Coast Guard personnel, now part of the Department of Homeland Security, to carry firearms and make arrests as well as detain vessels owned by those who owe civil penalties in connection with maritime security law violations. Under prior authority, arrests could be made at sea by the Coast Guard but any violations detected on shore required intervention by other law enforcement authorities.

But the most controversial provision in the House version, which would have extended Coast Guard authority over foreign ships, was dropped from the final bill under pressure from the Bush administration. The provision would have required the Coast Guard to approve the security plans of foreign ships to make sure that they comply with security and safety standards established by the International Convention for the Safety of Life at Sea and the International Ship and Port Facility Security Code (ISPS).

Testifying May 6 before a House of Representatives subcommittee, Coast Guard Chief Counsel John Crowley strongly objected to the provision on the grounds that it would violate U.S. international obligations, invite reciprocity from foreign governments and put a drain on the agency's limited resources.

Under the ISPS, which is intended to protect nations and the global shipping industry from terrorist attacks, the security plans are approved by governments of countries in which ships are registered. Some governments, lacking resources to review the plans, ask private or quasi-governmental bodies knows as "classification societies" to do the job on their behalf.

House members expressed concern about the reliability of some "classification societies" and argued that, by depending on those bodies, the Coast Guard had ignored a clear mandate in a 2002 law. The 2002 maritime security measure, similar in many respects to the international code but limited to the United States and its maritime industry, called on ship owners and operators to develop security plans for approval by the Transportation Department and required the department -- then the home of the Coast Guard -- to assess security at high-risk foreign ports and those from which high volumes of U.S-destined cargo originate.

To some extent, the disagreement over ship security plans has faded after the Coast Guard started July 1 boarding foreign ships on a maiden voyage to a U.S. port to verify their compliance with the ISPS. In addition, a Coast Guard official said July 1 that his agency plans to visit over three years small, medium and large ports in 135 countries to assess their compliance with the code and provide technical assistance, if necessary.

In addition to reauthorizing the Coast Guard in the fiscal year beginning October 1, the law provides for expanding and modernizing its fleet and boosting its personnel.

In a separate development, President Bush signed into law the same day legislation implementing an international agreement designed to reduce the risk of financing purchases of aircraft and aircraft engines.

The Senate passed the legislation in July following passage by the House of Representatives a month earlier.

The Senate is expected to ratify the treaty by the end of 2004.

Testifying April 29 before a House of Representatives subcommittee, Karan Bhatia, assistant secretary of state for aviation and international affairs, said the Cape Town Convention and Aircraft Protocol could bring "significant" economic benefits to the United States and other countries and help facilitate the modernization of airline fleets around the world.

Signed in 2001 by the United States and 27 other countries in Cape Town, South Africa, the convention, designed to reduce the risk of financing purchases of different types of high-value transportation equipment, establishes an international legal framework for security and leasing interests in high-value transportation equipment.

Bhatia said that the convention provides financiers with several key rights and guarantees, which are likely to lead to lower financing charges and the opening of fresh capital sources. Both developments would particularly benefit developing countries whose carriers now pay high interest rates or cannot access the commercial credit markets because of their credit risk, he said.