SAFE Port Act

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The Security and Accountability For Every Port Act of 2006 (or SAFE Port Act, Pub.L. 109-347^[1]) was an Act of Congress in the United States covering port security and to which an online gambling measure was added at the last moment. The House and Senate passed the conference report on September 30, 2006, and President Bush signed the Act into law on October 13, 2006.^[2]

Contents 1 Port security provisions 2 Internet gambling provisions 2.1 Legislative history 2.2 Responses from online gambling sites 2.3 WTO dispute 2.4 Challenge to UIGEA part of Act 3 See also 4 Notes 5 External links

[edit] Port security provisions

The SAFE Port Act codified into law a number of programs to improve security of U.S. ports, such as:

• Additional requirements for maritime facilities
• Creation of the Transportation Worker Identification Credential
• Establishment of interagency operational centers for port security
• Port Security Grant Program
• Container Security Initiative
• Foreign port assessments
• Customs Trade Partnership against Terrorism

In addition, the Act created the Domestic Nuclear Detection Office within the Department of Homeland Security and appropriated funds toward the Integrated Deepwater System Program, a long-term U.S. Coast Guard modernization program.^[3]

[edit] Internet gambling provisions

Title VIII of the Act is also known as the Unlawful Internet Gambling Enforcement Act of 2006 (or UIGEA). This title (found at 31 U.S.C. § 5361–5367) prohibits the transfer of funds from a financial institution to an illegal Internet gambling site, specifically excluding fantasy sports, online lotteries, and horse/harness racing.

[edit] Legislative history

The Act was passed at midnight on the day Congress adjourned for the 2006 elections. Though a bill with the gambling wording was previously debated and passed by the House of Representatives,^[4][5][6] the SAFE Port Act (H.R. 4954) as passed by the House on May 4th (by a vote of 421-2) and the United States Senate on September 14th (98-0),^[7] bore no traces of the Unlawful Internet Gambling and Enforcement Act that was included in the SAFE Port Act signed into law by George W. Bush on October 13th, 2006.^[8] The UIGEA was added in Conference Report 109-711 (submitted at 9:29pm on September 29, 2006), which was passed by the House of Representatives by a vote of 409-2 and by the Senate by unanimous consent on September 30, 2006. Due to H.RES.1064, the reading of this conference report was waived.

Among the more prominent Congressional supporters of the Act were Jim Leach, a former chairman of the House Banking Committee and Rep. Robert Goodlatte [R-VA], who co-authored H.R. 4411 (the Internet Gambling Prohibition and Enforcement Act). Bill Frist, former majority leader of the Senate, and Jon Kyl are both credited with expediting the UIGEA's passage through the Senate. Though the SAFE Port Act's provisions related to Internet gambling were drawn exclusively from H.R. 4411, significant portions were removed, including text relating to the Federal Wire Act.^[9]

A prior version of the gambling part of the bill passed the House in 1999 but failed in the Senate in part due to the influence of lobbyist Jack Abramoff.^[10]

UIGEA § 5364 required that regulations be issued by the Federal Reserve and the Department of the Treasury within 270 days of the passage of the Act. In October, 2007, these agencies issued a "Notice of Proposed Rulemaking",^[11] which effectively tabled draft UIGEA regulations for public comment. In response to the NPRM, four hundred and ten (410) responses were received from depository institutions, depository institution associations, public policy advocacy groups, consumers, “gambling-related” entities, payment system operators, federal agencies, and members of Congress.

The Bush administration had previously adopted the position that it would not finalize any rule subsequent to November 1, 2008. This last-minute rulemaking that binds the hands of an incoming administration is commonly termed the midnight drop.

The final regulations (termed the “Final Rule”) were finalized and released November 12, 2008, and came into effect on January 19, 2009, the day before the Obama administration took office.^[12] Compliance is not required until December 1, 2009 in order to give the “non-exempt participants” an opportunity to implement the necessary safeguards and procedures.

[edit] Responses from online gambling sites

All online gambling sites listed on the London Stock Exchange or similar markets have stopped taking United States players due to the passage of the Act, while most non-public companies have announced an intention to continue taking US customers.^[13][14]

PartyGaming Plc, which runs PartyPoker.com, had its publicly-traded stock drop almost 60% in 24 hours as a result of this bill being passed. The company was moved from the FTSE 100 to the FTSE 250 Index on October 11.^[15]

[edit] WTO dispute

Antigua and the United States have been involved in a long-running World Trade Organization dispute over U.S. restrictions on online gambling. The WTO ruled on January 25, 2007 that the U.S. is in violation of its treaty obligations by not granting full market access to online gambling companies based in the island nation.^[16] On March 30, 2007 the WTO confirmed the U.S. loss in the case.^[17]

On June 19, Antigua filed a claim for USD $3.4 billion in trade sanctions against the United States, along with a request for authorization to ignore U.S. patent and copyright laws. This claim was filed a day after similar demands for compensation were made by the European Union.^[18]

The United States settled the dispute by granting concessions in other sectors. The administration of President George W. Bush refused to disclose the details of those concessions, however. In April 2008 Congressmen Barney Frank and Ron Paul called for the agreements to be made public. They stated that the concessions "could cost the United States many billions of dollars in compensation" and that the administration's invocation of "national security" as a reason to block disclosure under the Freedom of Information Act (FOIA) was "a misuse of the FOIA process."^[19] When the administration continued to keep the information secret, Public Citizen brought suit on behalf of Ed Brayton, a journalist whose FOIA request had been denied.^[20]

[edit] Challenge to UIGEA part of Act

In May 2009, U.S. Congressman Barney Frank introduced a bill to overturn the gambling aspects of the Act, “The Internet Gambling Regulation, Consumer Protection, and Enforcement Act,” which seeks to repeal the major online gaming obstacles of the UIGEA and go further in protecting Americans from fraud, while safeguarding against underage and problem gamblers.^[21]

Frank also introduced a bill to delay the implementations of the UIGEA for one year, until Dec. 1, 2010.^[22]

[edit] See also

• Maritime Transportation Security Act of 2002
• Port security
• Transportation Worker Identification Credential
• Baxter v. United States
• Commonwealth of Pennsylvania vs Walter Walkins
• Southern District of New York Action Against Online Poker Players

[edit] Notes

[edit] External links

• Forbes.com: Bush signs Safe Port Act
• MSNBC.com: Will ban end Internet gambling? Don't bet on it