[Congressional Record Volume 156, Number 153 (Monday, November 29, 2010)]
[Senate]
[Pages S8239-S8240]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
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
[[Page S8240]]
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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