ENFORCEMENT
eop_ipec_jointstrategicplan_hi-res
eop_ipec_jointstrategicplan_hi-res
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Office of the Intellectual Property Enforcement Coordinator<br />
Several sources suggest that a small handful of<br />
non-U.S. banks may be disproportionately used as safe<br />
havens for proceeds stemming from illicit activities,<br />
including international trade in counterfeit goods. 29 In<br />
particular, it has been reported that more than 90 percent<br />
of accounts used to process online credit card payments<br />
for hundreds of thousands of websites dedicated to<br />
the sale of counterfeit goods are concentrated in three<br />
banks based in China: the Bank of China, the Bank of<br />
Communications, and Agricultural Bank of China. 30 The<br />
results of an academic investigation published in 2016 by<br />
the MIT Technology Review similarly revealed that these<br />
same banks in China processed the majority of seized<br />
fake goods purchased during an 18-month period—that<br />
is, 291 of 300 transactions. 31<br />
The U.S. Department of State reports that the<br />
“development of China’s financial sector has required<br />
increased enforcement efforts to keep pace with the<br />
sophistication and reach of criminal networks,” and the<br />
“primary sources of criminal proceeds” involve “intellectual<br />
property theft” and the sale of “counterfeit goods.” 32<br />
While further study is needed, there are significant<br />
indications suggesting that both Chinese and non-Chinese<br />
actors are exploiting the Chinese banking system to<br />
launder money made through counterfeit trade (FIG. 36).<br />
The scope of abuse of the banking and international<br />
trading systems must be better understood. Where<br />
further substantiated, actions to combat these apparent<br />
abuses must be a central part of the Nation’s IP<br />
enforcement strategy. Safeguarding the financial system<br />
from illicit use is critical to safeguarding the rule of<br />
law and global economic well-being. It is also critical<br />
to promoting a safe online environment that supports<br />
effective IP enforcement. Opportunities exist to curb<br />
the exploitation of banking networks and illicit IPRbased<br />
activity alike, by working through established<br />
mechanisms dedicated to safeguarding the financial<br />
system from illicit use, including through existing<br />
bi-lateral and multi-lateral engagement.<br />
ACTION NO. 2.7: Increase awareness and<br />
understanding of syndicates’ exploitation of the<br />
global financial system to harbor and launder<br />
proceeds of commercial-scale ip theft. The<br />
IPEC will designate a working group comprised<br />
of relevant members of the U.S. Interagency<br />
Strategic Planning Committees on IP Enforcement<br />
to explore opportunities to initiate a study<br />
on the scope of the problem of transnational<br />
money laundering involving counterfeit goods.<br />
Additionally, the Departments of the Treasury,<br />
Homeland Security, State, and Justice, and other<br />
relevant Federal agencies will consider ways to<br />
ensure that anti-money laundering efforts and<br />
strategies take into account IP-based illicit activity.<br />
FIG. 36: Global Networks: Unsealed Indictment Alleging Link Between Chinese Banks, Transnational Organized Crime,<br />
Money Laundering & Counterfeit Trade. 33<br />
Department of Justice | Unsealed Indictment | E.D.N.Y. Docket No. 15-Cr-81<br />
According to an unsealed indictment by the U.S. Department of Justice in September 2015, three Colombian nationals<br />
based in Guangzhou, China, are alleged to have carried-out more than $5 billion in trade-based money laundering activities<br />
in China on behalf of drug cartels based in Mexico and Colombia. The defendants are alleged to have laundered money<br />
through bank accounts in Hong Kong and mainland China to fund the purchase counterfeit goods in China, which were<br />
then sold around the world.<br />
ASIA NORTH AMERICA SOUTH AMERICA<br />
SECTION 2<br />
67