UP, CBP reach agreement to improve rail security between U.S. and Mexico

U.S. Customs and Border Protection (CBP) and Union Pacific have reached an agreement to improve rail security. UP will spend $50 million on supply chain security to directly enhance the Mexico and United States rail supply chain. This agreement initiates the "21st Century Bi-National Secure Border Corridor," a program to expand cooperative partnerships among the U.S. and Mexican governments, railroads reaching the border and other stakeholders that have an interest in rail transportation of goods between the U.S. and Mexico. "The facilitation of trade and security of the international supply chain is vital to both the health of our economy and protecting the country," said U.S. Customs and Border Protection Commissioner Alan Bersin. "It is in the best interest of all stakeholders that all appropriate steps are taken to secure the U.S. border against the smuggling of contraband and to ensure supply chain security now rather than years from now." "We are pleased that we have reached a resolution that allows Union Pacific to expand our long-standing relationship with CBP, in which Union Pacific has already invested tens of millions of dollars in technology, infrastructure, training and workforce resources to promote safer and more secure rail transportation across the border," said Jim Young, Union Pacific chairman and chief executive officer. "CBP and Union Pacific teams along the border have worked exceptionally well together for many years and this formal agreement solidifies our commitment to enhance that relationship and involve others who should be part of this critical work." The Mitigation Decision defines the steps that Union Pacific will take to infuse $50 million to further secure the border, including investing in security enhancements at critical junctures of the Mexico and United States supply chain and partnering with CBP to form a Rail Fusion Center to identify high-risk shipments. The funds will be allocated towards technology, infrastructure and personnel enhancements. The Mitigation Decision also provides that CBP will mitigate past penalties assessed against Union Pacific if the railroad fulfills its obligations under the Decision. In recent years these penalties have grown to be significant as illegal controlled substances were discovered on trains originating in Mexico and arriving at U.S. - Mexican border crossings. Investments will include intelligent video scanning and developing technologies such as global positioning systems and radio frequency identification tracking of rail movements. A working team will form a "Fusion Center" where CBP, Union Pacific and other stakeholders will interact for communication, sharing of intelligence, analysis and coordination. Other initiatives will harden inspection and detection processes at the U.S. border and encourage investments in Mexican rail corridors. Rail shippers will be encouraged to participate as well. As Union Pacific makes the agreed investments, more than $500 million in civil penalties that CBP has asserted or might assert against Union Pacific for previous drug discoveries will be mitigated and Union Pacific will not pay fines or penalties for those drug discoveries. The parties also agreed on a new process and new standards under which future drug discoveries will be evaluated for the next five years. However, the agreement leaves in place Union Pacific's lawsuit challenging nearly $38 million in penalties asserted by CBP that is awaiting decision in the U.S. District Court in Nebraska. Union Pacific and CBP agreed that this lawsuit should continue in order to clarify whether the penalties are authorized by federal laws for the long term.