By Thomas Long, J.D.
Coming shortly after a DHS report on counterfeit and pirated goods, the order directs customs authorities to take new steps to prevent traffickers from importing contraband into the U.S.
President Donald Trump on January 31 signed an executive order aimed at directing executive agencies to take new steps to curtail the importation of counterfeit goods into the United States. The order was issued one week after the Department of Homeland Security (DHS) released a report titled "Combating Trafficking in Counterfeit and Pirated Goods," which outlines a series of recommendations and actions to address what DHS called an "illicit trade epidemic." Titled "Ensuring Safe & Lawful E-Commerce for US Consumers, Businesses, Government Supply Chains, and Intellectual Property Rights" represents the latest action in a policy initiative set forth in an April 3, 2019, White House memorandum.
According to the order, "E-commerce, including transactions involving smaller express-carrier or international mail packages, is being exploited by traffickers to introduce contraband into the United States, and by foreign exporters and United States importers to avoid applicable customs duties, taxes, and fees." The order states that it is the policy of the U.S. government to protect consumers, IP rights holders, businesses, and workers from counterfeit goods and other contraband entering the country through e-commerce. The order further states that government policy is to refer persons involved in the importation of unlawful merchandise to U.S. Customs and Border Protection (CBP) of the Department of Homeland Security for a determination whether they are sufficiently "responsible" to participate in transactions with the federal government. In furtherance of policy goals, the government is directed to consider all appropriate actions to ensure that persons who are suspended or debarred by CBP are excluded from participating in the importation of merchandise into the United States.
The order directs the Secretary of Homeland Security to issue a notice of proposed rulemaking to establish criteria importers must meet in order to obtain an "importer of record" number (a unique identifier assigned to entities without U.S. presence that are permitted to import goods into the U.S.). These criteria are to include a provision that any person debarred or suspended by CBP for lack of present responsibility for reasons related to importation or trade shall be ineligible to obtain an importer of record number for the duration of such person’s suspension or debarment by CBP.
In addition, the Secretary of Homeland Security, through the Commissioner of CBP, is to take steps to ensure that—within 60 days of the publication in the System for Award Management by CBP of the name of any debarred or suspended person—express consignment operators, carriers, hub facilities, and licensed customs brokers notify CBP of any attempt by unauthorized persons to reestablish business activity through a different name or address. The order also directs several agencies to coordinate to develop a ratings system for international postal services and to "protect" the United States from shipments from international posts that fail to comply with U.S. policies for a given amount of time. Additionally, it calls on DHS to look into whether the government is collecting enough fees to cover processing and inspection costs for parcels entering the U.S.
"The trafficking of counterfeit and pirated goods is a scourge that causes significant harm to our workers, consumers, intellectual property owners, and economy, said U.S. Trade Representative Robert Lighthizer. "Under President Trump’s leadership, the federal government and industry partners are working together to combat illicit trade. In addition, President Trump has ensured that intellectual property protection and enforcement against pirated and counterfeit goods are a priority in America’s trade relationships. For example, the USMCA [the United States-Mexico-Canada Agreement, H.R. 5430, which was signed into law on January 29] sets the highest standards of any U.S. trade agreement for strong, effective protection and enforcement of intellectual property rights. Similarly, the U.S.-China Phase One agreement includes strong intellectual property protections and effective action against pirated and counterfeit goods."
In related news, CBP and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) announced on January 30—just in time for Super Bowl weekend—the seizure of more than 176,000 counterfeit sports-related items, worth an estimated $123 million. The seizures were part of "Operation Team Player," an ongoing effort developed by the HSI-led Intellectual Property Rights Center to target the illegal importation and distribution of counterfeit sports merchandise. Last year, enforcement actions related to Operation Team Player resulted in the seizure of $24.2 million worth of counterfeit sports-merchandise, HSI said.
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