Background

As trade increases ahead of the holiday season, U.S. Customs and Border Protection is urging members of the Customs Trade Partnership Against Terrorism to be proactive in verifying and monitoring their suppliers, distributors, and manufacturers to ensure that counterfeit and other illicit goods do not enter their supply chains. CBP notes that the explosive growth of e-commerce has generated a substantial increase in international mail and express consignment shipments that in turn has increased the willingness of counterfeiters, particularly foreign sellers in China, to ship counterfeit and other illicit goods to the U.S. and all over the world.

CBP states that it processes an average of more than 420,000 parcels of mail and 180,000 express consignment shipments each day just from China. Through a recent interagency enforcement effort that measured compliance and assessed illicit networks in this small package environment, CBP determined that about 12.5 percent of targeted parcels contained counterfeit goods or contraband. These goods are often disguised using tactics such as mislabeling shipments and using false documentation.

Preventing the flow of counterfeit and illicit goods is implicit in CTPAT members’ agreement to work with CBP to protect their supply chains, identify and mitigate security gaps, and implement specific security measures and best practices. CBP therefore urges members to keep the program’s security criteria in mind when ordering products online, including (1) having a written, risk-based process for screening new business partners and monitoring current partners; (2) implementing procedures to ensure that all information used in the clearing of cargo is legible; complete; accurate; protected against the exchange, loss, or introduction of erroneous information; and reported on time; (3) shippers or their agents ensuring that bills of lading and/or manifests accurately reflect the information provided to the carrier; (4) carriers exercising due diligence to ensure these documents are accurate; and (5) reviewing the information included in import/export documents to identify or recognize suspicious cargo shipments.

CBP also recommends that CTPAT members be proactive when it comes to verifying and monitoring their suppliers, distributors, and manufacturers, with higher risk meriting more rigorous monitoring. “In other words,” CBP states, “controlling counterfeiting demands having tight control over your entire worldwide supply chain and being disciplined in enforcing and verifying supply chain partners and products,” from suppliers of raw materials to manufacturing, packaging, and distribution.

Failure to take the necessary steps to halt the importation or exportation of counterfeit products (consistent with their role and ability in the supply chain) could not only harm members’ revenue and reputation but could also lead to their suspension or removal from CTPAT. In addition, the attempted or actual introduction of counterfeit goods, or merely aiding or facilitating such activity, can result in not only the seizure or forfeiture of the goods but also substantial penalties under 19 USC 1595a(b) and 1526(f).

For more information, please contact Lenny Feldman at (305) 894-1011.

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