Lawmakers Seek to Strip COSCO Ships of U.S. Port Inspection Privileges Over Espionage Claims

Three senior House Republicans are calling on the Department of Homeland Security to revoke special inspection privileges granted to vessels operated by Chinese state-owned shipping giant COSCO, citing allegations that the company’s ships have been used to collect intelligence near U.S. coastlines.

In an October 14 letter to Homeland Security Secretary Markwayne Mullin, House Select Committee on China Chairman John Moolenaar, House Intelligence Committee Chairman Rick Crawford and Rep. Carlos Gimenez, chairman of the Homeland Security Subcommittee on Transportation and Maritime Security, called for COSCO vessels to be removed from the U.S. Coast Guard’s Qualship 21 program.

The program rewards foreign-flagged vessels with strong safety and compliance records by allowing them to undergo fewer routine port state control inspections at U.S. ports.

According to the lawmakers, at least 10 COSCO vessels were enrolled in the program as of July 15, despite the company’s designation by the Pentagon as a Chinese military company. An accompanying Coast Guard table identifies 11 vessels, including COSCO DEVELOPMENT, COSCO PRIDE and COSCO VIETNAM.

The letter, which has now prompted a Coast Guard review, follows a September 1 Reuters investigation in which two senior Trump administration officials alleged that COSCO uses concealed equipment aboard its commercial ships to intercept military communications near the coastlines of the United States and other countries.

The officials said the alleged intelligence-gathering operations were part of a decades-long relationship between COSCO and Beijing, allowing China to collect communications signals from ships and aircraft operating across Europe, North America and Asia.

COSCO denied the allegations in a September statement, saying its onboard equipment serves legitimate commercial purposes, including navigation, communications and emergency response, and is not used for intelligence gathering or military surveillance. China’s embassy in Washington also rejected the allegations.

The lawmakers argue that the reported activities warrant a review of whether COSCO should continue receiving preferential treatment under the Coast Guard program.

“State-owned commercial vessels engaging in espionage is an expected breach of trust we regularly anticipate from the Chinese Communist Party,” the lawmakers wrote.

They called on DHS to revoke COSCO vessels’ enrollment, refuse renewals and increase scrutiny of other companies suspected of conducting activities on behalf of China’s People’s Liberation Army.

Beyond removing COSCO from Qualship 21, the lawmakers are seeking answers about what the Coast Guard knew about the alleged surveillance activities and when that information became available.

They specifically asked whether Coast Guard Intelligence received warnings about COSCO from the Pentagon, intelligence agencies or other federal authorities before the September 1 Reuters report, and whether that information was considered when determining the vessels’ eligibility.

In a statement to gCaptain, a Coast Guard spokesperson confirmed that on October 15, the Commandant has directed an immediate review of the vessels’ participation.

“The U.S. Coast Guard is responsible for the safety and security of U.S. ports, waterways, and shipping, which are vital to our nation’s economic prosperity and national security. Every day, the Coast Guard takes decisive action to identify, mitigate, and address safety and security risks to our ports in the physical domain and cyberspace.”

The lawmakers also questioned whether COSCO’s designation under Section 1260H, which identifies Chinese military companies operating in the United States, prompted a review of the company’s Qualship 21 status.

Other questions concern whether the Coast Guard has conducted additional boardings of COSCO ships, whether it has sufficient authority to investigate suspected surveillance activities in U.S. waters, and whether analysts are examining historical vessel movements in the U.S. Exclusive Economic Zone for patterns that could indicate intelligence collection.

The letter also calls for a review of Hong Kong’s continued eligibility as a qualified flag administration under Qualship 21, citing concerns about Beijing’s control over the territory.

The Coast Guard updated its Qualship 21 eligibility criteria earlier this year, expanding the circumstances under which vessels can be removed from the program, including certain associations with sanctioned entities and companies facing federal criminal investigations.

“The U.S. Coast Guard continuously evaluates and updates its programs to address the dynamic and evolving security and safety landscape of the maritime industry,” the Coast Guard told gCaptain. “

The congressional request raises a separate question of whether national security intelligence and military-company designations should factor into decisions about which foreign vessels qualify for reduced inspections.

Qualship 21 enrollment does not exempt vessels from security inspections or other Coast Guard enforcement actions, and the lawmakers’ request does not itself revoke COSCO’s eligibility.

The Department of Homeland Security has not publicly announced any action in response to the letter.