ENFORCEMENT

Office of the Intellectual Property Enforcement Coordinator
One technical investigation administered by
Underwriters Laboratories (UL) subjected 400 counterfeit
mobile phone adapters to safety testing, and the
results were literally shocking. 83 The overall failure rate
exceeded 99 percent, and the counterfeit adapters were
found to present significant fire and shock hazards. 84
Indeed, 22 samples were immediately damaged during
the tests, and 12 additional samples were found to be
so poorly designed and constructed that they presented
a risk of lethal electrocution to the user. 85
This fast-growing criminal trade in counterfeit
electronic components has resulted in millions of
counterfeit electrical products entering supply chains
the world over, including recent examples of: circuit
breakers that did not trip when overloaded; extension
cords with undersized wiring that overheated; batteries
and chargers without a safety device in the circuitry
to prevent overcharging; holiday lights that posed
fire hazards; small appliances that lacked ground-fault
circuit interrupters that protect users against electrical
shock; and ineffective surge protectors. 86
The diverse avenues through which counterfeit
electronics can reach consumers is particularly worrisome.
Sometimes, a counterfeit reaches the consumer in
the form of a complete counterfeit product, while
other times they enter the supply chain as fraudulent
component parts that are inadvertently incorporated into
legitimate goods. 87 For example, as of June 2016, CBP
had facilitated the seizure of over 100,000 hoverboards,
valued at $45 million, following reports of fires caused by
substandard and counterfeit lithium ion batteries used to
power the hoverboards (FIG. 23). 88
FIG. 23: Overheated Counterfeit Hover Board.
Manufacturers of counterfeit electrical products
have their sights set on the attractive U.S. market. As
an example of the scale of the issue, a single joint
operation between Chinese and U.S. customs offices
during a one-month period resulted in the seizure
of a quarter of a million counterfeit electronics,
including globally known legitimate brands. 89
Criminal enterprises exploit these and other popular,
legitimate brands to further their illicit enterprises.
Counterfeiters are becoming sufficiently sophisticated
that even complex technologies are successfully
manufactured, falsely branded, and sold into the
U.S. supply chain.
Example: Counterfeit Pharmaceuticals.
Among all counterfeit goods, counterfeit
pharmaceuticals pose one of the most serious and
pervasive health and safety threats. As noted by The
Economist, “[s]alesmen have peddled worthless cures
for millennia. But the 21st century is turning into a
golden age for bad drugs.... For criminals, fake pharma
is lucrative and the penalties are usually low. Indeed,
the drug supply-chain is a cheat’s paradise.” 90
Counterfeit drugs circumvent all of the standards
and protections built into the regulated closed
system of distribution for genuine pharmaceuticals in
the United States. They may contain too little, too
much, or no active primary ingredients, or various
dangerous contaminants. 91
Counterfeit drugs are not produced under safe
manufacturing conditions, nor are they inspected
by regulatory authorities. Reports confirm that many
counterfeit drugs include ingredients that are toxic
to patients and processed under poorly controlled
and unsanitary conditions. 92 Organizations and
independent traffickers often acquire counterfeit
oxycodone and other pharmaceutical drugs through
the darkweb. Consequently, these drugs resemble
actual pharmaceutical drugs including the marking on
the pills. However, lab results often determine these
purported pharmaceutical drugs contain other illicit
drugs such as heroin.
SECTION 1
Source: U.S. Consumer Product Safety Commission
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