White House Looking at Executive Action on Counterfeit Goods; Section 321 Changes Mentioned
Several departments are to initiate a broad review of current policies and ways to improve measures to prevent the trade of counterfeit goods, the White House said in an April 3 memorandum. Among other things, the administration would like a review of how different parties, including customs brokers, can help stop the trade of counterfeit and pirated goods, it said. The Department of Homeland Security secretary is tasked with developing a report on the subject within 210 days, along with the attorney general, the U.S. trade representative, the assistant to the president for Trade and Manufacturing Policy and other officials, it said.
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Specifically, the report should focus on the role "third-party intermediaries," which are defined in the memo as "online third-party marketplaces, carriers, customs brokers, payment providers, vendors, and other parties involved in international transactions." The memo requires a "report, with recommendations," said Peter Navarro, the assistant to the president for Trade and Manufacturing Policy, during an April 3 call with reporters. "I emphasize the 'with recommendations' because we've established a clear track record in this administration when we do these reports 'with recommendations' we implement the recommendations. That's the goal here."
Navarro also made a mention of possible changes to the Section 321 de minimis rules and noted that the Treasury Department is permitted to modify that exemption as needed. "Congress passed a law that has a so-called 'de minimis' exemption of $800," he said. "And so, by that exemption, products that are coming in that are declared less than $800 don't really have to fill out any forms. This seems to be a vast oversight and a loophole, which is being exploited by counterfeiters." Navarro said that he mentioned changes to the rules as "just one possible example of how we might address the problem," but "it would be premature to take action before the report's findings come out." Navarro also wrote an opinion piece published in The Wall Street Journal about the administration's effort.
The report should include a review of current procedures used by the intermediaries used in "curbing the importation and sale of counterfeit and pirated goods, including those conveyed through online third-party marketplaces," it said. The report should also "recommend changes to the data collection practices of agencies, including specification of categories of data that should be collected and appropriate standardization practices for data."
The report should also include any "appropriate administrative, statutory, regulatory, or other changes, including enhanced enforcement actions, that could substantially reduce trafficking in counterfeit and pirated goods or promote more effective law enforcement regarding trafficking in such goods," President Donald Trump said in the memo. "The report should address the practices of counterfeiters and pirates, including their shipping, fulfillment, and payment logistics, and assess means of mitigating the factors that facilitate trafficking in counterfeit and pirated goods."
Necessary policy changes for information sharing "with intellectual property rights holders, consumers, and third-party intermediaries" should also be examined, the memo said. The government agency representative should also "consult with intellectual property rights holders, third-party intermediaries, and other stakeholders" while developing the report, Trump said in the memo. The report eventually will be published in the Federal Register.