US Outsources Passport Manufacturing to Thailand

GPO is an agency little-known to most Americans, created by Congress almost two centuries ago as a virtual monopoly to print nearly all of the government's documents, from federal agency reports to the president's massive budget books that outline every penny of annual federal spending. Since 1926, it also has been charged with the job of printing the passports used by Americans to enter and leave the country.

When the government moved a few years ago to a new electronic passport designed to foil counterfeiting, GPO led the work of contracting with vendors to install the technology.

Each new e-passport contains a small computer chip inside the back cover that contains the passport number along with the photo and other personal data of the holder. The data is secured and is transmitted through a tiny wire antenna when it is scanned electronically at border entry points and compared to the actual traveler carrying it.

According to interviews and documents, GPO managers rejected limiting the contracts to U.S.-made computer chip makers and instead sought suppliers from several countries, including Israel, Germany and the Netherlands.

Mr. Somerset, the GPO spokesman, said foreign suppliers were picked because "no domestic company produced those parts" when the e-passport production began a few years ago.

After the computer chips are inserted into the back cover of the passports in Europe, the blank covers are shipped to a factory in Ayutthaya, Thailand, north of Bangkok, to be fitted with a wire Radio Frequency Identification, or RFID, antenna. The blank passports eventually are transported to Washington for final binding, according to the documents and interviews.

The stop in Thailand raises its own security concerns. The Southeast Asian country has battled social instability and terror threats. Anti-government groups backed by Islamists, including al Qaeda, have carried out attacks in southern Thailand and the Thai military took over in a coup in September 2006.

The Netherlands-based company that assembles the U.S. e-passport covers in Thailand, Smartrac Technology Ltd., warned in its latest annual report that, in a worst-case scenario, social unrest in Thailand could lead to a halt in production.

Smartrac divulged in an October 2007 court filing in The Hague that China had stolen its patented technology for e-passport chips, raising additional questions about the security of America's e-passports.

Venezuela 'to tax oil windfall'

Venezuela is planning a windfall tax on what it calls "excessive" profits of energy firms to allow state revenues to benefit from high oil prices.

The tax will take 50% of oil revenues above $70 per barrel, and an additional 60% of revenues over $100 per barrel, legislator Angel Rodriguez said.

He told state news agency ABN that oil firms had surpassed "reasonable levels of profitability".

The move will affect foreign oil firms operating in Venezuela such as Chevron.

Oil is currently trading above $104 per barrel.

'Excessive earnings'

The proposed tax comes months after President Hugo Chavez's nationalisation drive forced out two of the world's largest energy companies - Exxon Mobil Corp and Conoco Phillips.

Exxon is seeking $12 billion in compensation from Venezuela after its oilfields were nationalized last year.

The tax will also apply to state oil company PDVSA, which now controls all of Venezuela's oilfields.

"Because of high oil prices, oil companies have excessive earnings that go beyond reasonable levels of profitability," Mr Rodriguez was quoted by Reuters as telling state news agency ABN.

"One way to distribute them to our people, who are the owners of the oil, is to create this tax."

Mr Rodriguez said the measure would get initial approval from the country's Congress this week.

Venezuela diverts Exxon oil to China

Venezuela is sending to China all the oil it previously shipped to a US refinery jointly owned with Exxon Mobil amid a legal battle between the OPEC nation and the US oil giant, Energy Minister Rafael Ramirez said on Friday.

''With respect to the shipments, we put them at China's disposal,'' Ramirez told reporters. ''All of it.''

Exxon and Venezuela have been in dispute over supplies to the Louisiana-based Chalmette refinery since Exxon won court orders freezing $US12 billion in Venezuelan assets as part of a legal battle over compensation for Exxon assets Venezuela nationalized in 2007.

State oil company PDVSA halted supplies to Chalmette, a 50-50 joint venture that can process about 193,000 barrels per day of crude, after Exxon began rejecting some of the cargoes that Venezuela destined for the refinery.

Ramirez said PDVSA rerouted the supplies in protest, which he said were meant to pressure Venezuela as part of an international arbitration over the 2007 nationaliSation of the Cerro Negro heavy oil project that Exxon once ran.

Exxon wants at least $US 5 billion in compensation, though PDVSA says it is due less than $US 1 billion.

A London court this month lifted one of the freeze orders, though Exxon still has similar injunctions in Netherlands and Netherlands Antilles courts.

Venezuelan President Hugo Chavez is keen to export more oil to Asia to reduce traditional dependence on United States energy markets.