Counterfeit Goods Remain Huge Border Challenge

The influx of counterfeit goods, many posing significant national security risks, continues to be challenge of border security, according to the latest counterfeit seizure statistics released last week by US Customs and Border Protection (CBP) and US Immigrant and Customs Enforcement (ICE).
The report titled Intellectual Property Rights Seizure Statistics: Fiscal Year 2009 found that during FY2009 there were 14,841 intellectual property rights (IPR) seizures with a domestic value of $260.7 million (M).
While the the domestic value of IPR seizures actually marked a slight decline of 4%, from the $272.7 million seized in FY08, this decline significantly lower than the 25% decline in total imports during the past year.
China was the top trading partner for IPR seizures in FY 2009 with a domestic value of $204.7M. This accounts for 79% of the total value seized.
However, Hong Kong also accounted for $26.8M in seized value making it the second most significant trading partner by domestic value for IPR seizures and accounted for 10% of the total domestic value. India had the third highest domestic value at $3M accounting for 1% of the total domestic value.
While Footwear was the top commodity seized in FY 2009 accounting for 38% of the entire value of infringing goods, three of the top ten categories of commodities seized include products posing possible safety or security risks.
Pharmaceuticals in particular cited as the top commodity presenting potential safety or security risks, followed by electrical articles and critical technology components.
The National Intellectual Property Rights Coordination Center, located in Arlington, VA, is a multi-agency center responsible for coordinating a unified U.S. government response regarding IPR enforcement issues. The IPR Coordination Center’s responsibilities include coordinating US government domestic and international law enforcement activities involving IPR issues, serving as a collection point for intelligence provided by private industry, as well as a channel for law enforcement to obtain cooperation from private industry and integrating domestic and international law enforcement intelligence with private industry information relating to IPR crime.
Last month the center conducted an international week of action targeting the sale of counterfeit and illicit medicines on the Internet. As part of this operation Federal agents and officers from U.S. Immigration and Customs Enforcement( ICE ), US Customs and Border Protection ( CBP ), the Food and Drug Administration ( FDA ), the U.S. Drug Enforcement Administration ( DEA ), and the U.S. Postal Inspection Service ( USPIS ) targeted over 7,000 suspect packages in New York, Newark, N.J., Miami, Memphis, Tenn., Louisville, Ky., Cincinnati and San Francisco resulting in 724 packages being detained for further examination. Of those, 48 have been formally seized to date.
In addition to these examinations, the FDA issued 22 Warning Letters about illegal activity occurring on 136 independent Web sites that are now posted on the FDA Web site. To date, 90 of those Web sites or domain names have been permanently suspended.
During the operation, international Internet monitoring revealed 751 Web sites engaged in illegal activity, including some offering controlled or prescription-only drugs, 72 of which have now been taken down. Worldwide, more than 16,000 packages were inspected by regulators and customs, 995 packages were seized and nearly 167,000 illicit and counterfeit pills – including antibiotics, steroids, lifestyle drugs and diet pills, confiscated. A total of 22 individuals are under investigation for a range of offenses, including illegally selling and supplying unlicensed or prescription-only medicines.
"Counterfeit pharmaceuticals pose a significant threat to the public’s health and safety and must be targeted by coordinated global law enforcement action," said John Morton, Department of Homeland Security Assistant Secretary for ICE. "Consumers seeking a better price or wanting to buy drugs without a prescription often do not know that the drugs they order through the Internet are often manufactured in inferior facilities, with substandard or dangerous ingredients, and with a high likelihood that they will not perform as expected, or worse, will cause harm."
The danger of counterfeit drugs specifically in the context of preparedness to address H1N1 was highlighted by Alex Garza, MD Chief Medical Officer and Assistant Secretary for Health Affairs Department of Homeland Security in testimony before the US House of Representatives, Committee on Homeland Security Subcommittee on Emerging Threats,Cybersecurity and Science & Technology.
Immigration and Customs Enforcement places a significant emphasis on reducing the threat to health and safety posed by the trafficking of counterfeit, unapproved, and substandard pharmaceuticals. Due to the current 2009 H1N1 threat, this emphasis now includes efforts to identify and interdict counterfeit 2009 H1N1 vaccines and other influenza treatment products, such as counterfeit antiviral medications. In addition to the investigative resources of the ICE Office of Investigations, and the Office of International Affairs, ICE spearheaded the establishment of a new National Intellectual Property Rights Coordination Center (IPR Center).
The IPR Center now includes representation from all federal agencies with enforcement jurisdiction over intellectual property (IP)-related crime, including U.S. Customs and Border Protection (CBP), the Federal Bureau of Investigation (FBI), the Food and Drug Administration (FDA) – Office of Criminal Investigations, the U.S. Postal Inspection Service (USPIS), the Department of Commerce, and the Department of Justice Computer Crimes and Intellectual Property Section (CCIPS). Of particular significance is the recent inclusion of Mexico Customs as a partner agency, providing ICE and the IPR Center with the ability to more effectively address cross-border commercial fraud issues between our two countries.

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