Trump Signs Executive Order to Prevent Online Sales of Counterfeit Goods

President Donald Trump arrives for a signing ceremony for the United States–Mexico–Canada Trade Agreement on the South Lawn of the White House in Washington on Jan. 29, 2020. (Drew Angerer/Getty Images)

President Donald Trump signed an executive order on Jan. 31 aimed at “ensuring safe and lawful e-commerce for U.S. consumers, business, government supply chains, and intellectual property rights.”

The order noted that “e-commerce, including transactions involving smaller express-carrier or international mail packages, is being exploited by traffickers to introduce contraband into the United States, and by foreign exporters and United States importers to avoid applicable customs duties, taxes, and fees.”

In order to cut the number of counterfeit items sold online, Trump has asked the Department of Homeland Security to “consider appropriate measures” to ensure that companies selling goods from abroad aren’t shipping knockoffs, and to identify companies suspected of trying to import goods to the United States despite being banned from doing so.

U.S. Customs and Border Protection (CBP) has also been directed to review its Importer of Record Program and take steps to ensure that importers who have been suspended are not able to reestablish business activity by changing their name or address.

“It is the policy of the United States Government to protect consumers, intellectual property rights holders, businesses, and workers from counterfeit goods, narcotics (including synthetic opioids such as fentanyl), and other contraband now being introduced into the United States as a result of the recent growth in e-commerce,” the order reads.

“The United States Government must also protect the revenue of the United States from individuals and entities who evade customs duties, taxes, and fees.”

A notice of proposed rule-making also will be issued to establish criteria importers must meet in order to obtain an importer of record number, and CBP must develop criteria to create an international noncompliance metric that will measure the international post carrier’s efforts to prevent the shipment of counterfeit products to U.S. customs.

The noncompliance metric will “take into account rates of trafficking of counterfeit goods, narcotics (including synthetic opioids such as fentanyl), and other contraband through a particular international post, effectiveness of the international post in reducing such trafficking, including cooperation with CBP, as well as such other factors the Secretary, through the Commissioner, determines advisable,” the order states.

Any postal service that doesn’t meet the minimum requirements and has high rates of contraband shipments may be banned from delivering to the United States, according to the order.

The trafficking of counterfeit and pirated goods is causing “significant harm” to U.S. workers, consumers, intellectual property owners, and the economy, U.S. Trade Representative Robert Lighthizer said.

“Under President Trump’s leadership, the federal government and industry partners are working together to combat illicit trade. In addition, President Trump has ensured that intellectual property protection and enforcement against pirated and counterfeit goods are a priority in America’s trade relationships,” Lighthizer said in a statement.

“The Trump Administration is continuing to show strong leadership in stopping those who steal American intellectual property and seek to profit off of counterfeit products. I commend Acting Secretary Wolf and his staff at the Department of Homeland Security for their important report that highlights the extent of this problem and sets forth an action plan to address it.”

In a 2019 report, U.S. Customs and Border Protection said that 33,810 shipments containing goods that violated intellectual property rights were seized in 2018. The goods, had they been genuine, would have had an estimated retail price of $1.4 billion.

China remains the primary source economy for counterfeit and pirated goods seized, accounting for a total estimated retail price of over $761 million, or 54 percent of the estimated retail value of all IPR seizures, CBP said.