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Counterfeit Components Continue to Slam Electronics Industry

Counterfeit Components Continue to Slam Electronics Industry

The problem of counterfeiting keeps getting worse. In 2013, the US Customs and Border Protection reported more than 24,300 counterfeit shipment seizures, representing more than $1.7 billion in goods. Over the last five years, counterfeit seizures have increased nearly 50%.

Power management company Eaton has launched a program to raise awareness of ways industry professionals can protect themselves against counterfeit electrical products. The "I Didn't Know" educational campaign includes a website devoted to helping buyers identify and report counterfeit parts. The campaign intends to reach professionals in the electrical and electronics industry and is part of the company's ongoing effort to combat counterfeit components worldwide.

Eaton noted that counterfeit products need to be seen as a problem affecting the entire electronics industry. "A counterfeit electrical product poses a significant risk to health and safety," Tom Grace, brand protection manager at Eaton's Electrical Sector Americas, told Design News. "The counterfeit product also represents a significant liability to anyone involved, should a product failure or personal injury occur."

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Grace noted that over the last 10 years, the techniques used by counterfeiters have improved significantly. Counterfeit manufacturers are becoming increasingly sophisticated in their production of unsafe lookalike products, making it extremely difficult to tell the difference between a counterfeit and an authentic product. "Eaton's 'I Didn't Know' counterfeit awareness campaign was created to highlight the difficulty of identifying counterfeit parts, even for the experienced contractor," said Grace.

The sophistication in shipping counterfeit products is adding to the difficulty of detection. Counterfeit shipments often take an indirect shipping route to avoid detection. "The counterfeiter also reduces the size of the shipment to decrease losses should a shipment be seized," said Grace. This adds to the needle-in-a-haystack difficulty in spotting counterfeit parts. The sheer number of imported products elevates the challenge. In 2013, 11 billion shipping containers and 250 million air shipments arrived in the US.

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China still leads in counterfeiting

According to the US Customs and Border Protection's annual "Intellectual Property Rights Seizures Statistics" for fiscal year 2013, 93% of seized counterfeit products originated in China. And the overall volume continues to grow. There was a 38% increase in counterfeit seizures in 2013 over 2012.

Even as US and European governments enforce penalties for counterfeit goods as they arrive, the enforcement in the countries where the counterfeit goods originate has been weak or non-existent. "Penalties for counterfeiting exist in many countries, yet they are not enforced, nor are they significant or punitive enough to stop manufacturers from producing dangerous components," said Grace. "More needs to be done to ensure that counterfeiting is enforced as a crime and the penalties reflect the severity and impact to the global economy."

Rob Spiegel has covered automation and control for 15 years, 12 of them for Design News. Other topics he has covered include supply chain technology, alternative energy, and cyber security. For 10 years he was owner and publisher of the food magazine, Chile Pepper.

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