Grassley Questions UAE Ports Deal, Potential Impact on National, Trade Security

WASHINGTON – Sen. Chuck Grassley, chairman of the Committee on Finance, with
jurisdiction over international trade, today questioned the selling of the management of six key U.S.
ports to a United Arab Emirates-owned company. Grassley expressed concern to the Treasury
secretary that the deal may compromise national security and trade security. The text of Grassley’s
letter to the Treasury secretary follows.

The Honorable John W. Snow
Secretary of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220

Dear Mr. Secretary:

I am deeply concerned about the decision by the Committee on Foreign Investment in the United
States (CFIUS), which you chair, to approve a deal selling the management of six key U.S. ports to
Dubai Ports World. I understand that Dubai Ports World is wholly owned by the government of the
United Arab Emirates (UAE). You may recall that I wrote to President Bush last year about a similar
deal involving the attempt of the China National Offshore Oil Corporation, a state-owned company,
to purchase a U.S. oil company and asked to be kept abreast of these types of investments.

Obviously, my request fell on deaf ears. I am disappointed that I was neither briefed nor informed
of this sale prior to its approval. Instead, I read about it in the media. I expect you to address my
concerns involving this deal.

The potential impact on U.S. trade security programs such as the Container Security Initiative and
the Customs and Trade Partnership Against Terrorism remains unknown. I am unsure if Dubai Ports
World will work with U.S. authorities to implement these programs that secure the supply chain of
U.S. companies and protect the American people. As chairman of the committee with jurisdiction
over these programs, it is vital that I understand the ramifications on these programs.

Ensuring the current and future security of American ports is an integral part of the war on terror.
Moreover, although I am not fully aware of the circumstances involving this stealth-like deal, it
appears, based on the available news reports, that this decision may be wrong-headed. Perhaps, once
I learn more about the genesis of this deal, review the threat assessments prepared in advance of the
decision, and gain an understanding of the reasons why the deal with Dubai Ports World is in the
best interest of the United States, I may have a different opinion.

Accordingly, I would appreciate detailed written responses and supporting materials as necessary
to answer the following questions by no later than March 3, 2006:

(1) Describe in detail what steps CFIUS took to determine that the approval of this sale was in the
best interests of our national security. In responding to this question, please provide all relevant
documentation including reports, evaluations, and assessments conducted by any agency within the
Executive Branch, as well as any such reports conducted by third party contractors.

(2) Describe in detail the methodology used to determine the impact of the sale on port security and
the flow of trade into U.S. ports.

(3) State whether or not the review(s) conducted to support this decision assessed the significance
of the UAE’s relationship with the Taliban prior to 9/11 and its use by some of the 9/11 hijackers
as an operational and financial base.

(4) Describe what controls were put in place to prevent the firm's management from circumventing
any security measures.

(5) List each record that exists documenting the role of CFIUS in this matter that could assist the
Committee in understanding why this deal was approved.

In addition to responding to these questions, I request an oral briefing on these issues as soon as
possible but no later than February 24, 2006.

As you know, U.S. ports are vital to our economic growth and for this reason, it is paramount that
they remain secure. Dubai Ports World would handle about 33 million containers worldwide, just
over nine percent of the world’s total port traffic. The acquired ports represent approximately $195
billion in import value or about 13 percent of the value of all imports into the United States.
Therefore, this purchase must be thoroughly scrutinized.

As Chairman of the Senate Finance Committee, with jurisdiction over international trade, I am
determined to obtain full and complete information on this sale. I want to be sure that this sale is in
the best interest of the American people.

In closing, I look forward to working with you on these issues and gaining greater clarity of the
processes used by CFIUS in this instance.

Sincerely,

Charles E. Grassley
Chairman

-30-

• Print
• Email
• Tweet