The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“COMBATING MILITARY COUNTERFEITS ACT” mentioning the U.S. Dept. of Commerce was published in the Senate section on pages S8239-S8240 on Nov. 29, 2010.
The publication is reproduced in full below:
COMBATING MILITARY COUNTERFEITS ACT
Mr. WHITEHOUSE. Mr. President, I rise to speak about a bill I recently introduced: S. 3941, the Combating Military Counterfeits Act of 2010. This bill will help protect America's Armed Forces from the risk of defective equipment by enhancing the ability of prosecutors to keep counterfeit goods out of the military supply chain.
The safety of our servicemembers and the success of their missions depend upon the proper performance of weapon systems, body armor, aircraft parts, and countless other mission-critical products. Unfortunately, America's military faces a significant and growing threat: the infiltration of the military supply chain by counterfeit products. These counterfeit products do not meet military standards, putting troops' lives at risk, compromising military readiness, and costing taxpayers millions in replacement costs. In the case of microelectronics, counterfeit parts also provide an avenue for cybersecurity threats to enter military systems, possibly enabling hackers to disable or track crucial national security applications.
Let me give you a few examples from a recent report by the Government Accountability Office:
The Defense Department discovered in testing that it had procured body armor that was misrepresented as being ``Kevlar.'' Think about that: a criminal sold fake body armor to the military, putting our troops' lives at risk just to make a buck. The law must provide strong deterrence and harsh sanctions for such conduct.
And in another example, a supplier sold the Defense Department a personal computer part that it falsely claimed was a $7,000 circuit that met the specifications of a missile guidance system. As my colleagues may know, military grade chips are required to withstand extreme temperature, force, and vibration. Chips that don't meet those specifications are prone to fail--for example, when a jet is at high altitude, when a missile is launching, or when a GPS unit is out in the field. The possible tragic consequences of such equipment failing are unthinkable.
And the increasing number of counterfeits has broad ramifications for our national security. A January 2010 study by the Commerce Department, for example, quoted a Defense Department official as estimating that counterfeit aircraft parts were ``leading to a 5 to 15 percent annual decrease in weapons systems reliability.'' And the risk is growing. The Commerce Department study, which surveyed military manufacturers, contractors, and distributors, reported approximately two and a half times as many incidents of counterfeit electronics in 2008 as in 2005. It is only going to get worse as the high prices of military grade products attract more and more counterfeits. Consider, for example, that before fleeing the country, the supplier that sold a counterfeit
$7,000 circuit for a missile guidance system had been paid $3 million as part of contracts worth a total of $8 million.
We should also evaluate this bill in the context of the relentless cyber attacks America weathers every day. The chip might not only be counterfeit, it might be the carrier for dangerous viruses and malware that may create windows for enemies to enter to sabotage our military equipment to steal our military secrets.
I applaud those of my colleagues who have been working with the Department of Defense to ensure that it does everything it can to keep counterfeits out of its supply chain. And I am pleased the administration, and particularly the intellectual property enforcement coordinator, Victoria Espinel, is taking on this issue.
But I also believe that Congress needs to give the executive branch more tools to address these problems. As a former U.S. attorney, I know the significant deterrent effect criminal sanctions can provide. To that end, the Department of Justice has a vital role to play in using criminal investigations and prosecutions to identify and deter trafficking in counterfeit military goods.
Current law is insufficient. The existing counterfeit trafficking statute, 18 U.S.C. Sec. 2320, provides for heightened penalties for trafficking in counterfeits that result in bodily injury or death. But unlike cases of counterfeit pharmaceuticals, it may not be possible to prove that a military counterfeit caused bodily injuries or death, since the faulty part may never be recovered from a battlefield. As a result, traffickers in military counterfeits are likely to face penalties that do not reflect the unacceptable risk that counterfeits impose on our troops, our military readiness, and our national and cyber security.
We must address this flaw in our laws and we must do so soon. Traffickers should face stiff penalties if they knowingly sell the military a piece of counterfeit body armor that could fail in combat, a counterfeit missile control system that could short-circuit at launch, or a counterfeit GPS that could fail on the battlefield.
The Combating Military Counterfeits Act of 2010 will make sure that such reprehensible criminals face appropriate criminal sanctions. It creates an enhanced offense for an individual who traffics in counterfeits and knows that the counterfeit product either is intended for military use or is identified as meeting military standards. It doubles the statutory maximum penalty for such offenses. The bill also directs the Sentencing Commission to update the Sentencing Guidelines as appropriate to reflect Congress's intent that trafficking in counterfeit military items be punished sufficiently to deter this reckless endangerment of our servicemembers and weakening of our national security.
The bill is narrowly crafted. It adds to an existing offense so that it only targets particularly malicious offenders--those who already are guilty of trafficking in counterfeit goods and know that the goods in question are intended for military use. As a result, this bill will not affect legitimate military contractors who might be unaware that a counterfeit chip has made its way into one of their products. Nor will it apply to makers of products that unintentionally fall short of military specifications as a result of innocent mistakes. Indeed, this bill will help military suppliers by deterring criminals from selling counterfeits to them or to their subcontractors. Manufacturers will benefit from the protection of their intellectual property.
To that end, I have received a letter of support from the U.S. Chamber of Commerce which explains that ``[t]his legislation would . .
. provide an important deterrent to those seeking to profit from the sale of counterfeit parts to the military.'' The Semiconductor Industry Association has similarly weighed in with their support, explaining the irresponsible manner in which counterfeit chips are made and the harm that counterfeit chips, most of which are imported into the United States, can cause to the military and to their industry. I am grateful for their early support and I welcome the comments of other stakeholders as I work to make the legislation as effective as possible in its deterrence of this shameful criminal activity.
I of course also very much look forward to working with my colleagues on what I expect to be bipartisan legislation that we can act on promptly. We all have had the privilege of visiting with our troops. We all know the sacrifices they make for our country. We all want to do everything we can to ensure that their equipment functions properly and that counterfeits do not compromise our nation's military readiness or security. By deterring trafficking in counterfeit military goods, the Combating Military Counterfeits Act of 2010 is a vital and necessary step towards these important goals.
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