ENFORCEMENT

Office of the Intellectual Property Enforcement Coordinator
Automating the customs clearance process
increases speed and predictability by simplifying and
standardizing the information coming into the system
and the steps involved in determinations. By elevating
global enforcement through shared and best practices,
and use of electronic information systems like online
databases with robust IPR-based modules, international
shipping channels can become more secure. 35
ACTION NO. 3.25: Support modern recordation
systems in developing countries to enhance global
enforcement of IPR. DHS and the Department of
State will engage with international counterparts
to identify opportunities for improving recordation
systems, including the international interoperability
of such systems.
4. Tackle the Growing Costs Associated with the
Storage and Destruction of Counterfeit Goods.
The storage and destruction of counterfeit goods
have become a major issue in a substantial number
of countries. 36 Governments (i.e., taxpayers) or right
holders often bear the costs for the storage and
destruction associated with seized counterfeit and
pirated goods, while those entities that profit from illicit
trade are generally subject to no disposal costs. Given
the increase in illicit trade in counterfeit and pirated
products, governments and rights holders are facing a
growing and significant financial burden that needs to
be solved without further delay.
FIG. 54: Over 100,000 counterfeit ‘hover boards’
(comprised of metals, plastics, rubber, electrical components,
and lithium-ion batteries) and related parts are stored at CBP
facilities, awaiting destruction.
In some countries, such as the United States, the
Federal Government incurs the costs to store and
destroy counterfeit and pirated goods, while other
countries require the infringed rights holder to pay
the costs for counterfeit and pirated goods seized by
customs authorities. 37
From a policy standpoint, taxpayers should not
carry the burden of paying for costs associated with
the storage and destruction of fake goods that have
been shipped in violation of law in instances where
the importer, exporter, or carrier transporting the
infringing goods is in a position to bear the costs.
Similarly, inequities exist when the costs of storage and
destruction are placed on the victim of the crime (i.e.,
the infringed rights holder), as the victim has committed
no wrong and the enforcement of a country’s laws
represents a significant state interest (e.g., promoting
economic development; ensuring public health and
safety; curbing the flow of illicit proceeds; supporting
labor and environmental standards, etc.). 38 Moreover,
rights holders in the form of small and medium
enterprises (SMEs), as well as larger entities, may not be
prepared to pay storage and destruction costs the world
over for illicit goods that they did not manufacture and
do not control.
“Transport operators provide critical services that
are subject to abuse as part of the counterfeiting
supply chain. Counterfeit goods depend on land,
air and sea shipping and transportation services
to cross borders and reach foreign markets. These
intermediaries are critical players…in stopping the
flow of fake goods.”
Source: International Chamber of Commerce (ICC-
BASCAP), “Roles and Responsibilities of Intermediaries:
Fighting Counterfeiting and Piracy in the Supply Chain”
(March 2015), p.16
Source: CBP (2016), Port of Chicago
To address this problem, the roles of the individual
players in the supply chain must be fully understood
and opportunities to reasonably shift costs explored.
Specifically, the United States and foreign countries
must explore opportunities to pass costs directly to
infringers, and where that is not possible or practical,
to assess the role of importers, exporters, carriers, and
others along the supply chain that profit (knowingly or
SECTION 3
111