Photo of counterfeit goods by Paul Caffrey, U.S. Immigration and Customs Enforcement (DVIDS)

GAO Tells CBP to Streamline Enforcement Approach to Counterfeit Goods

The annual number of small packages sent to the U.S. since fiscal year 2013 has more than doubled, and small packages seized often contain counterfeit goods. Europe has also recorded increases in counterfeit goods in small packages.

This has been further exacerbated by the plethora of fake COVID-19 products being sold and sent around the world.

U.S. Customs and Border Protection (CBP) and European customs officials are trying to combat the increasing numbers of small packages containing counterfeit goods that are being sent directly to consumers. But CBP officials say the seizure and forfeiture processes that U.S. law requires are time and resource intensive.

A Government Accountability Office (GAO) report sets out how the European Union (EU) and U.S. approaches to enforcing intellectual property rights (IPR) differ with respect to counterfeit goods in small packages, which are often sent through express carrier services or international mail. The EU uses a streamlined, application-based procedure to destroy suspected counterfeits in small packages. Through this procedure, rights holders request that member state customs authorities take action against such packages. The procedure allows customs authorities to bill rights holders for certain associated costs, and gives customs authorities discretion in sharing data with rights holders.

In the U.S., CBP is required to seize any goods it determines to be counterfeit, and typically destroys such goods, regardless of shipment size. CBP does not bill rights holders for the cost of enforcement, and is required to provide specific information to rights holders after seizure of goods.

Both EU and U.S. customs officials reported common challenges in combating the flow of counterfeit goods in small packages to GAO. For example, EU and U.S. officials said the large volume of small packages makes it difficult for customs agencies to prioritize resources among competing needs such as drug enforcement and security. EU and U.S. officials also said that a lack of adequate data on these packages is a challenge in taking enforcement action against them.

While GAO’s report noted that CBP has taken steps to address these challenges, it found that its primary enforcement processes are not tailored to combat counterfeit goods in small packages. 

According to CBP officials, from 2014 to 2018, CBP piloted a program to help address the volume of such packages by facilitating the abandonment of goods that it suspected—but had not determined—to be counterfeit. In 2019, CBP initiated a program to obtain additional data, and as of July 2020 had begun using these data to assess the risk that such packages contained counterfeit goods. But CBP officials told GAO that the seizure and forfeiture processes they are required to use for goods determined to be counterfeit are time and resource intensive. 

In April 2019, the White House required DHS to identify changes, including enhanced enforcement actions, to mitigate the trafficking of counterfeit goods. In January 2020, DHS proposed several actions that CBP could take, but GAO found that CBP has not yet decided which to pursue to streamline its enforcement, and the DHS component describes these as “notional”. Without taking steps to develop a streamlined enforcement approach, CBP will continue to face difficulty in addressing the increasing number of counterfeit goods in small packages.

Inevitably, GAO recommended to DHS that CBP develops a streamlined enforcement approach to counterfeit goods in small packages. This may include assessing the feasibility and impact of such an approach, including any potential for cost savings.

DHS concurred and noted that, by January 2021, CBP’s Office of Trade will implement a policy to streamline its forfeiture process for seized merchandise valued under $2,500, and that this policy would result in such low-value shipments reaching a final disposition within 30 days of seizure. DHS expects that this streamlining will reduce the resources necessary for storage and other administrative costs related to enforcement against these goods.

Read the full report at GAO

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Kylie Bielby has more than 20 years' experience in reporting and editing a wide range of security topics, covering geopolitical and policy analysis to international and country-specific trends and events. Before joining GTSC's Homeland Security Today staff, she was an editor and contributor for Jane's, and a columnist and managing editor for security and counter-terror publications.

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