Status updates from the ‘Open Cases Reports’ …
Conventional wisdom holds that counterfeit parts do not enter the supply chain through Authorized Distribution. Electronic part distribution experts claim such events are so improbable, the user community need not apply counterfeit avoidance practices when acquiring parts through authorized channels. Many of these experts have acknowledged, however, that the handling of product returns presents a possible point of vulnerability.
This essay discusses a counterfeit part escape through authorized distribution illustrating a vulnerability associated with processing products returned by customers. Authorized Distribution professionals have referred to this incident as a rarity and, therefore, neither a call for concern by the user community, nor worthy of the attention it has received. I offer some further thoughts to consider before dismissing this escape.
The following article includes important insight into the Electronics Manufacturing Service (EMS) market and its approach to counterfeit part avoidance…
“Why the EMS industry must go to these lengths is the result of a consistent failure to recognize the desperate situation it is now in. But there’s a gap between what high-end (read: capable) and low-end test houses can detect, and the emphasis to date has been on keeping costs as low as possible, not on ensuring components are valid.”
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The following is the first in a series of essays written from the perspective of a US defense electronics professional with a strong bias favoring end use product integrity and reliability considerations. Some material may not be appropriate for those whose product performance expectations, business systems, or value systems support a tolerance for counterfeit part escapes.
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Ruminations, Myths and Unreliable Facts
Many industry supply chain subject matter experts have presented diagrams illustrating players in the electronic part supply chain, the movement of parts among these players, and how counterfeit parts are introduced into the supply chain. The following is an example of these supply chain depictions.
Public Comments on FAR Case 2013-002 are now available from regulations.gov
“… Yet another variable—a ready supply of counterfeit parts and fly-by-night dealers—also suppresses the value of the components legitimate businesses sell and lease, and Cazaz lamented the lack of oversight the Federal Aviation Administration exercises over the industry. He said the problem has become even more acute in the U.S. than in Western Europe, where stricter and more tightly enforced regulations exist. …”
More at AINonline
Two articles published recently in Law360 discussed the reporting of counterfeit parts the DOD Inspector General. …
“DOD Pushes Contractors to Keep Reporting Counterfeits to IG” – Part II of an interview with Randy Stone, DOD Deputy Inspector General (Law360, 30 Sep 2014)
“You Don’t Have To Report Counterfeits to DOD IG” (Law360, 9 Oct 2014)
The subject of reporting counterfeit part discoveries to law enforcement and other government agencies has been a frequent discussion among government and industry stake holders for the better part of a decade.
The following article is one of many ‘alerts’ describing a recent court decision that could have significant impact on “the trade community, compliance officers, business owners, and others”.
The author advises …
“Importers will also have to consider how to address the potential effect of this decision in other customs proceedings, such as customs enforcement actions and focused assessments (audits), and the implications under other laws, such as the False Claims Act (FCA).”