NDAA Sec 818(g) and Expectations to Stop Counterfeits at the Border

New industry standards have been created to provide uniform requirements, best practices and methods to mitigate the risks of receiving and installing counterfeit electronic parts. Use of industry standards, however, will not reduce the significant and increasing volume of counterfeit electronic parts entering the DOD supply chain. Subject matter experts agree that the Intellectual Property (IP) rights holder is best qualified to determine if a product is authentic or not. US Customs and Border Protection (CBP) must have the authority to consult IP and trademark rights holders (e.g., Original Component Manufacturers) for assistance in determining whether or not imported goods are authentic.

For the past three years, the Semiconductor Industry Association (SIA) Anti Counterfeiting Task Force (ACTF) has been working to fix a dispute over Customs and Boarder Protection (CPB) redaction policy by pursuing legislation to include specific authorization for CPB to return to its pre-2008 practice of sharing unredacted photos of suspicious chips when they are identified at ports of entry. The particulars of this issue are described in SIA’s 7 July 2011 testimony before the House Committee on Homeland Security Subcommittee on Oversight, Investigations and Management. Many subject matter experts within the US defense industry have aligned with the SIA on its recommendations concerning "the redaction issue" because intercepting counterfeit electronic parts at the border is one of the best ways to prevent their introduction into DOD’s supply chain. As a result of the SIA’s work, section 818 to the FY2012 NDAA includes provisions that allow US Customs and Border Protection to "share information appearing on, and unredacted samples of, products and their packaging and labels, or photographs of such products, packaging, and labels, with the rightholders of the trademarks suspected of being copied or simulated for purposes of determining whether the products are prohibited from importation …".

According to members of the SIA who have been directly involved in pursuing this issue, US Customs and Border Protection has not yet taken definitive steps to return to its pre-2008 practice of sharing unredacted information with semiconductor manufactures necessary to determine whether or not imported electronic parts are authentic. These SIA member sources indicated that US Customs and Border Protection and the Department of Treasury continue to be concerned about the potential for Port Officer vulnerability to arrest and prosecution under the Trade Secrets Act despite a review with knowledgeable Senate and House staff who do not feel it was an appropriate or legitimate fear.

Defense industry organizations are encouraged to pursue this issue with the US Government to ensure this requirement within Section 818 of the FY2012 NDAA is implemented by US Customs and Border Protection. Implementation of this requirement is an important step toward driving the importers of electronic parts to take steps to ensure authenticity of imported items and preventing counterfeit electronic parts from entering the DOD supply chain.

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One thought on “NDAA Sec 818(g) and Expectations to Stop Counterfeits at the Border

  1. Anonymous says:

    Henry – thank you for your summary of my letter. I will be seeking companies and organizations that would like to support SIA in remedying this situation and moving forward to protect American citizens, the business community and our military from dangerous counterfeit semiconductors and other electronics being imported into the United States.

    Lawrence (Lonnie) Hurst
    Vice Chair, Semiconductor Industry Association (SIA) Anti-Counterfeiting Task Force

    NOTE: The point of contact for pursuing this issue with the SIA is …
    Andrew Olney
    Chairman, Semiconductor Industry Association (SIA) Anti-Counterfeiting Task Force
    andrew.olney@analog.com

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