CBP/ICE IPR Seizures Up 24% in FY 2011 (Consumer, Tech, Low Value Items)
U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement have issued statistics on their fiscal year 2011 intellectual property rights seizures. The statistics show that while the number of seized counterfeit goods has increased since FY 2010, their value has dropped due to an increased number of low-value seizures, including more seizures of express courier and consolidated shipments. The report also shows that FY 2011 is the first time since FY 2005 that footwear was not the top commodity seized and the first time handbags/wallets/backpacks were not on the "Top Commodities Seized" list.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Seizure of Consumer Safety, Critical Technology Products Increased by 44%
The number of consumer safety and critical technology IPR seizures increased by 44%, and the value of these seizures rose by 41% to more than $60 million compared to FY 2010 totals due to an increase in pharmaceutical and perfume seizures. The combined increase in value in FY 21011 for seizures of counterfeit pharmaceuticals and perfumes was $18.8 million compared to FY 2010, a 148% increase.
Top consumer safety and critical technology products seized include: (i) pharmaceuticals (representing 28% of domestic value), (ii) electrical articles (17%); (iii) perfume/cologne (15%); (iv) cigarettes (14%); (v) health/personal care (7%); (vi) toys/electronic games (5%); (vii) eyewear/parts (4%); (viii) critical technology components (4%); (ix) batteries (2%); and (x) all other commodities (4%).
Number of Seizures Up 24%, but Value only Up 5% as Low Value Items Seized
The number of IPR seizures increased by 24% to 24,792 in FY 2011 from 19,959 in FY 2010. However, the domestic value1 of these seizures decreased by 5% from $188.1 million to $178.9 million. The report states this is due to (1) a significantly increased number of high-volume but low-value seizures, including express courier and consolidated shipments, and (2) a lower average value of an IPR seizure, which dropped to $7,193 in FY 2011, the lowest average value for IPR seizures in the last 10 years.
Mail and Express Courier Seizures Rose 16%, Cargo Seizures Steady
Trade in counterfeit and pirated goods has shown a marked shift towards using international mail and express courier services to transport illegal merchandise. In FY 2011, the number of seizures at mail and express courier facilities increased by 16% compared to FY 2010, an overall increase of 84% since 2007. Meanwhile the number of cargo seizures remained steady.
Some of the factors contributing to the increased use of mail and express courier services to transport counterfeit goods include: (i) continued growth of websites selling counterfeit and piratical merchandise directly to consumers, (ii) increased enforcement efforts by CBP and ICE at mail and express courier facilities, and (iii) continued engagement with right holders to provide training and information about their products to CBP and ICE.
Top Commodities Seized Include Electronics, Footwear, Pharma, Etc.
The following commodities were the top IPR seizures in term of domestic value:
- Consumer electronics. Consumer electronics was the top commodity seized in FY 2011, with the value of seizures increasing by 16% compared to FY 2010. These commodities accounted for 22% of the total domestic value of items seized or $38,992,613 in FY 2011. Approximately one-third of the seized goods in this category were infringing cellular phones.
- Footwear. For the first time since FY 2005, footwear was not the top commodity seized. The domestic value of footwear seizures in FY 2011 declined more than 75% from the all-time high of $102.3 million in FY 2008. The report states this is due to a sharp decline in the number of large footwear shipments arriving at seaports. In FY 2011, footwear seizures accounted for 14% of the total domestic value of seizures, or $25,252,613.
- Pharmaceuticals. Pharmaceuticals accounted for 9% or $16,848,192 of the domestic value of seizures in FY 2011. This is an increase of almost 200% from FY 2010, during which pharmaceuticals only accounted for 3% of the total domestic value of seizures.
- Optical media. Optical media accounted 9% or $15,567,059 of the domestic value of seizures in FY 2011. This is a decrease from FY 2010, during which optical media accounted for 7% of the total domestic value of seizures.
- Wearing apparel. Wearing apparel accounted for 8% or $14,755,599 of the domestic value of seizures in FY 2011. This is a decrease from FY 2010, during which wearing apparel accounted for 10% of the total domestic value of seizures.
- Perfume/cologne. Seizures of counterfeit perfume/cologne increased in value by 471% to $9.4 million in FY 2011, which can be attributed to increased partnerships with right holders and successful coordinated enforcement efforts. Perfume/cologne accounted for 5% of the total domestic value of seizures in FY 2011, but did not make the "Top Commodities Seized" list for FY 2010.
- Other commodities. Other commodities, such as watches/parts, cigarettes, computers/hardware, toys/electronic games, and all other commodities accounted for 32% of the total domestic value of seizures. FY 2011 is the first year that the category of handbags/wallets/backpacks did not make the "Top Commodities Seized" list.
In terms of volume, wearing apparel accounted for the most number of seizures, representing 25% or 7,392 items seized. Optical media accounted for 15%, consumer electronics 11% and handbags/wallets/backpacks 10%, footwear 6%, and pharmaceuticals 4% in terms of total number of items seized.
China Remains Top Source of Counterfeits, Representing 62% of All Seizures
China remains the primary source country for counterfeit and pirated goods, representing 62% of all IPR seizures by domestic value. In FY 2011, seizures of infringing goods from China and Hong Kong totaled $142 million, which is a 3% increase from FY 2010. While the value of footwear seized from China declined by nearly $20 million, the value of pharmaceutical seizures from China increased by more than $4.3 million and the value of perfume seizures from China increased by $7 million.
India and Pakistan both made the "Top Ten Source Countries" this year due to seizures of counterfeit pharmaceuticals. Pharmaceutical seizures accounted for 86% of the value of IPR seizures from India and 85% of the value of IPR seizures from Pakistan.
1Domestic value is the cost of the infringing merchandise when it was last purchased, including all duties, fees, broker’s charges, profit, unloading charges, and U.S. freight charges to bring the property to the importer’s premises.
(See ITT's Online Archives 12011009 for summary of the Consumer Product Safety Commission's work with CBP in 2010-2011 to more than 6.5 million units of about 1,700 different children's products at U.S. ports due to safety concerns or failure to meet federal safety standards.
See ITT's Online Archives 11031814 for summary of CBP/ICE's FY 2010 IPR seizure statistics.)
CBP and ICE press releases are available here and here, respectively.
CBP's IPR Fact Sheet is available here.