Co-Authored by Sharath Patil
On October 13, 2020, President Trump issued a Presidential Memorandum on stopping counterfeit trafficking on e-commerce platforms. The memorandum called for U.S. Customs and Border Protection (“CBP”) to “impose the maximum fines and civil penalties permitted by law on any e-commerce platform that directs, assists with, or is in any way concerned in the importation into the United States of counterfeit goods.” Furthermore, the memorandum also called for:
- CBP to continue seizing counterfeit goods imported into the United States in connection with e-commerce transactions
- Congress to pass laws that clarify and strengthen the president’s authority and increase its resources to address e-commerce-linked counterfeit trafficking
- The U.S. Attorney General to develop a legislative proposal to promote the policy objectives of the memorandum within 120 of its publication
The memorandum defined “e-commerce platforms” as “any web-based platform that includes features primarily designed for arranging the sale, purchase, payment, or shipping of goods, or that enables sellers not directly affiliated with an operator of a web-based platform to sell goods through the web to consumers located in the United States.” Amazon.com, Inc. is the most common example of an e-commerce platform.
Concerns about Counterfeit Imports
The U.S. government, industry, and public alike have long been concerned about counterfeit goods and their threats to intellectual property rights, public health and safety, and confidence in the market. The presidential memorandum states that “it is the policy of the United States… to protect consumers, intellectual property rights holders, businesses, and workers from counterfeit goods trafficked through e-commerce.”
For decades, CBP has enforced U.S. anti-counterfeit laws by screening and seizing imports. Interestingly, U.S. imports of counterfeit goods have exploded in recent years. In a January 24, 2020 report published by the U.S. Department of Homeland Security, titled Combating Trafficking in Counterfeit and Pirated Goods, the agency stated:
- Counterfeiting is no longer confined to street-corners and flea markets. The problem has intensified to staggering levels, as shown by a recent Organisation for Economic Cooperation and Development (OECD) report, which details a 154 percent increase in counterfeits traded internationally — from $200 billion in 2005 to $509 billion in 2016. Similar information collected by the U.S. Department of Homeland Security (DHS) between 2000 and 2018 shows that seizures of infringing goods at U.S. borders have increased 10-fold, from 3,244 seizures per year to 33,810.
What You Can Do
If you are importing and want to be proactive against importing counterfeit goods, you should:
- Know your product, supplier, and which U.S. federal government agencies regulate you
- Keep records proving you used reasonable care
- Ensure you have a formal written import compliance program
- If you receive a notice of detention or seizure notice from CBP, be PROACTIVE. Always petition penalties and liquidated damages claims – never pay without a fight!
For additional guidance on import compliance, check out our Top 10 Tips When Importing to Ensure Compliance. Furthermore, be sure to check out our articles on how CBP can be your personal policeman at the border and another on how you can legally import counterfeit goods (you read that right!). If you have any questions on counterfeit seizures or other import matters, please reach out to us at email@example.com.