Hatch-Requested GAO Report Finds Alarming Number of Counterfeit Products Harmful to Americans’ Health, Safety

WASHINGTON – Senate Finance Committee Chairman Orrin Hatch (R-Utah) today released a Government Accountability Office (GAO) report that uncovers challenges facing consumers, businesses and the U.S. agencies that enforce intellectual property rights (IPR) – Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE). Specifically, GAO found a high ratio of counterfeit goods being sold alongside authentic goods, which threatens the health and safety of American consumers.  

“The rise of eCommerce and online marketplaces has brought countless benefits to job creators and consumers around the globe, while at the same time increased threats to intellectual property protection and consumer confidence and safety,” Hatch said. “These threats not only affect consumers’ health and safety, but also have the potential to wreak havoc on our economy here at home. The Customs and Border Protection and Immigration and Customs Enforcement agencies play critical roles in ensuring that goods that enter the United States are legitimate and safe for consumers. This report highlights an alarming ratio between authentic and counterfeit goods purchased online, and recommends changes to improve information sharing between CBP, ICE, rights holders, and eCommerce platforms. I plan to hold a hearing to take a deeper look at the dangers of counterfeits sold to unsuspecting consumers and further analyze GAO’s recommendations.”

The Senate Finance Committee has jurisdiction over international trade policy. In April 2016, Hatch requested a report to better understand how CBP and ICE work together following the enactment of the Trade Facilitation and Trade Enforcement Act, bipartisan legislation that put in place tools to facilitate the efficient movement of legitimate trade and travel while strengthening enforcement at the border. 

The report found:

• Growth in eCommerce has contributed to a shift in the sale of counterfeit goods in the United States;
• 20 of 47 items GAO purchased from third-party sellers on popular consumer websites were counterfeit, according to testing by products’ rights holders; and
• CBP should evaluate its efforts to enhance IPR enforcement and assess potential additional information sharing with the private sector.

Additional Background: A longtime advocate of establishing enforceable international rules for U.S. firms and workers doing business overseas, Hatch has fought to strengthen IPR standards around the world. Hatch authored legislation to increase U.S. enforcement of American IPR overseas, including improvements to the Special 301 mechanism and the establishment of a Chief Intellectual Property Negotiator at Office of U.S. Trade Representative (USTR). Hatch also spearheaded efforts in Congress to enact bipartisan Trade Promotion Authority (TPA) to help open more markets for U.S. exports and strengthen IPR protections in U.S. trade agreements, and led enactment of the Defend Trade Secrets Act of 2016. 

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