Background

U.S. Customs and Border Protection’s enforcement of intellectual property rights – a priority trade issue for the agency due to the risk of significant revenue loss or harm to the U.S. economy or public health and safety – needs a number of improvements, according to a recent report from the Department of Homeland Security’s Office of Inspector General.

The report states that DHS’ Office of Strategy, Policy, and Plans (PLCY) did not coordinate the development of a department-wide IPR strategy or formal enforcement priorities even though Congress identified the issue as a PTI. While CBP and U.S. Immigration and Customs Enforcement submitted a joint strategic plan to Congress, PLCY did not coordinate or monitor their contributions nor review the priorities or goals they developed. These issues occurred because PLCY prioritized its workload based on ad hoc guidance from DHS and the White House.

Additionally, CBP did not strategically manage IPR or produce an IPR risk assessment because its Office of Trade did not have standard operating procedures for its responsibilities and Office of Field Operations officials believed “common sense” paired with intelligence reports and targeting satisfied requirements to conduct risk assessments. For example, the OT produced a trade threat analysis that analyzed the IPR risks related to specific importers and assessments of the impact of potential targeting rules on port operations, but neither contained an overall risk assessment related to IPR.

Moreover, the report states, CBP did not have accurate data to manage and enforce IPR. Specifically, CBP (1) used alternatives to seizure (such as denial of entry and voluntary abandonment) but did not maintain related data, (2) did not have data to evaluate whether ports met targeting priorities (e.g. shipments from repeat violators), (3) lacked data about how it identified 99 percent of IPR seizures and if those targeting efforts were focused on priority areas, and (4) reported different data on the number and value of IPR seizures to Congress than what was set forth in its SEACATS database.

The report concluded that DHS and CBP “must address strategic leadership gaps and data accuracy issues as CBP receives exponentially more counterfeit items than it is capable of seizing and processing.” OIG made a number of recommendations toward this end, such as PLCY developing a departmental approach for managing and enforcing IPR and CBP developing a strategic risk assessment for its IPR PTI. DHS agreed with all but one recommendation and set deadlines for complying with them within the next 18 months.

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