The Senate Finance Committee held a hearing on June 15, 2016, on "Challenges and Opportunities for U.S. Business in the Digital Age" that focused on steps that can be taken by Congress and in trade agreements to prevent counterfeit goods from being imported into the United States.

In an opening statement, Chairman Orrin Hatch (R-UT) said counterfeiting is of increasing concern as the digital economy makes it easier for counterfeiters to find and engage with consumers. He also said that because other nations have taken an antiquated approach to regulating the Internet and the digital economy, the Committee made digital trade a priority for Trade Promotion Authority legislation approved in 2015, including in ensuring that digital goods and services can be exported to other nations without duties.

Ranking Member Ron Wyden (D-OR) also raised concerns about counterfeit goods that are no longer only brought to the United States in shipping containers, but delivered directly to consumers with the help of the Internet.

Witnesses at the hearing were:

— Bruce Foucart, Assistant Director, United States National Intellectual Property Rights Coordination Center, U.S. Immigration And Customs Enforcement (ICE), United States Department of Homeland Security, Arlington , VA

— Norman Schenk, Vice President, Global Customs Policy & Public Affairs, UPS, Washington , DC

— Tom Triggs, General Counsel And Chief Legal Officer, Belkin International, Inc., Playa Vista, CA

Foucart said the biggest challenge for ICE is criminals willing to counterfeit and market products regardless of dangers to consumers, including counterfeit lithium batteries that are not properly vented, counterfeit airbags that have too much propellant, counterfeit jewelry that contains lead, counterfeit pharmaceuticals that contain potentially toxic substances, and counterfeit health and beauty products that are made under unsanitary conditions.

Schenk discussed UPS efforts to screen high-risk inbound shipments. Triggs said US representatives must actively monitor activities in foreign jurisdictions that may unfairly dilute the value of American brands, and called for "enhanced and predictable" intellectual property rights standards and laws, and corresponding enforcement, especially in the Asia-Pacific region.

Chairman Hatch inquired about steps Congress can take to stem the flow of counterfeit goods. Schenk recommended requiring advanced electronic data for all packages coming into the United States. He said the data typically consists of seven points: who and where it is coming from; to whom and where it is going; what's in the shipment (item description); piece count; and item weight. "This not only helps us reduce the potential of dangerous goods entering through our system, but also aids in manifesting compliance, payment of duties and fees, and clearance through customs," Schenk said in his testimony.

Triggs said former Committee Chairman and current Ambassador to China Max Baucus "is doing a great job to help U.S. companies in this fight," with his team of State and USPTO officers working vigorously with the Chinese government to strengthen its intellectual property rights regime.

Member statements and witness testimony are attached.

———————————————

———————————————
ATTACHMENTS

Foucart statement

Hatch statement

Schenk statement

Triggs statement

Wyden statement