[House Report 118-784]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 118-784
======================================================================
PROTECTING AMERICAN INDUSTRY AND LABOR FROM INTERNATIONAL TRADE CRIMES
ACT OF 2024
_______
November 29, 2024.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Jordan, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 9151]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 9151) to strengthen the Department of Justice's
enforcement against trade-related crimes, having considered the
same, reports favorably thereon with an amendment and
recommends that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 3
Background and Need for the Legislation.......................... 3
Hearings......................................................... 6
Committee Consideration.......................................... 6
Committee Votes.................................................. 6
Committee Oversight Findings..................................... 6
New Budget Authority and Tax Expenditures........................ 7
Congressional Budget Office Cost Estimate........................ 7
Committee Estimate of Budgetary Effects.......................... 8
Duplication of Federal Programs.................................. 8
Performance Goals and Objectives................................. 8
Advisory on Earmarks............................................. 8
Federal Mandates Statement....................................... 8
Advisory Committee Statement..................................... 8
Applicability to Legislative Branch.............................. 8
Section-by-Section Analysis...................................... 9
Additional Views................................................. 9
The amendment is as follows:
Strike all that follows the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting American Industry and Labor
from International Trade Crimes Act of 2024''.
SEC. 2. TRADE-RELATED CRIMES DEFINED.
In this Act, the term ``trade-related crimes'' shall be defined as
violations of law that are implicated by criminal activities in
furtherance of the evasion of duties, tariffs, and other import- and
export-related fees, import and export restrictions, or requirements
imposed by the Tariff Act of 1930, the Trade Expansion Act of 1962, the
Trade Act of 1974, or the Countering America's Adversaries Through
Sanctions Act, as well as all other laws and regulations involving
criminal activities relating to United States imports and exports,
trade-based money laundering, and smuggling.
SEC. 3. ESTABLISHMENT OF NEW STRUCTURE TO PROSECUTE INTERNATIONAL TRADE
CRIMES.
(a) In General.--A task force, named program, or other similar
structure to investigate and prosecute trade-related crimes, with
particular emphasis on violations of the statutes enumerated in section
4(a)(2), shall be established within the Criminal Division of the
Department of Justice not later than 120 days after the date on which
appropriations are made available to carry out this Act, and
coordinated by a supervisory criminal trial attorney selected by the
Assistant Attorney General of the Criminal Division or other official
designated by the Attorney General.
(b) Implementation.--To support this effort, the Attorney General
shall--
(1) create within the Criminal Division of the Department of
Justice new positions for criminal trial attorneys and
associated support personnel responsible for leading and
coordinating trade-related crime investigations and cases,
including those that may significantly impact more than one
district;
(2) ensure that experienced and technically qualified
criminal prosecutors support the effort; and
(3) promote and ensure effective interaction with law
enforcement, industry representatives, and the public in
matters relating to trade-related crimes.
SEC. 4. DUTIES AND FUNCTIONS OF NEW TRADE CRIMES STRUCTURE.
(a) In General.--Through the efforts of the task force, named
program, or other structure identified in section 3(a), the Attorney
General shall accomplish each of the following:
(1) Increase the capabilities and capacity of the Criminal
Division of the Department of Justice to prosecute trade-
related crimes.
(2) Increase the number of trade-related crimes being
investigated and prosecuted, including pursuant to health,
safety, financial, and economic trade-related crimes,
including--
(A) section 305 of title 13, United States Code;
(B) section 15 or 16 of the Toxic Substances Control
Act (15 U.S.C. 2614 or 2615);
(C) section 371 of title 18, United States Code;
(D) section 541 of title 18, United States Code;
(E) section 542 of title 18, United States Code;
(F) section 543 of title 18, United States Code;
(G) section 545 of title 18, United States Code;
(H) section 546 of title 18, United States Code;
(I) section 554 of title 18, United States Code;
(J) section 1001 of title 18, United States Code;
(K) section 1341 of title 18, United States Code;
(L) section 1343 of title 18, United States Code;
(M) section 1349 of title 18, United States Code;
(N) section 1956 of title 18, United States Code;
(O) section 1957 of title 18, United States Code;
(P) section 2320 of title 18, United States Code; and
(Q) section 301 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 331).
For the purposes of this Act, this list does not include
violations of national security-related laws and regulations,
including the Arms Export Control Act (22 U.S.C. 2771 et seq.),
International Emergency Economic Powers Act (50 U.S.C. 1701 et
seq.), Export Control and Reform Act (50 U.S.C. 4801 et seq.),
and the Trading with the Enemy Act (50 U.S.C. 4305(b)).
(3) Participate in basic and advanced training events with
Homeland Security Investigations, U.S. Customs and Border
Protection, and other Federal agencies and provide technical
assistance, where appropriate, to Homeland Security
Investigations, U.S. Customs and Border Protection, and other
Federal agencies with respect to the investigation and
prosecution of trade-related crimes.
(4) Develop multi-jurisdictional responses and partnerships
with respect to trade-related crimes through informational,
administrative, and technological support to other Federal
agencies and agencies of countries that are trading partners of
the United States, as a means for such agencies to acquire the
necessary knowledge, personnel, and specialized equipment to
investigate and prosecute trade-related crimes.
(5) Participate in nationally coordinated investigations in
any case in which the Attorney General determines such
participation to be necessary, as permitted by the available
resources of the Department of Justice.
(6) Ensure that all components that enforce laws against
trade-related crimes regularly consult with each other.
(b) Absence of Exclusion of Pursuing Other Remedies.--Litigation by
the Criminal Division of the Department of Justice shall not preclude
additional criminal prosecution or civil action against trade-related
violations. Nothing in this Act shall prevent the Criminal Division,
Civil Division, and other Department of Justice components from
pursuing enforcement action where appropriate.
SEC. 5. ANNUAL REPORT TO CONGRESS.
The Attorney General, in consultation with the Secretary of Homeland
Security, shall submit to the Committee on the Judiciary, Committee on
Ways and Means, and Committee on Financial Services of the House of
Representatives, and the Committee on the Judiciary and Committee on
Finance of the Senate a report on the work of the Department of Justice
with respect to investigation and enforcement of trade-related crimes.
Specifically, the report shall--
(1) be submitted not later than one year after the date of
the enactment of this Act, and annually thereafter, not later
than February 1 of each year that begins after the submission
of the first report;
(2) include annual statistics on the volume of publicly
charged trade-related crimes and indictments;
(3) include a summary on how the funds appropriated for
trade-related crimes were utilized in the prior reporting
period, including staff and operating expenses; and
(4) provide an estimate of any additional funding needed to
combat trade-related crimes.
Purpose and Summary
H.R. 9151, the Protecting American Industry and Labor from
International Trade Crimes Act of 2024, introduced by Rep.
Ashley Hinson (R-IA), provides for the establishment of an
initiative or similar structure within the Criminal Division of
the U.S. Department of Justice (DOJ) to address trade-related
crimes. The initiative would focus on identifying and
prosecuting individuals engaged in trade-related crimes,
including criminal activities in furtherance of the evasion of
duties, tariffs, and other import- and export-related fees,
import and export restrictions, or requirements imposed by the
Tariff Act of 1930, the Trade Expansion Act of 1962, the Trade
Act of 1974, and the Countering America's Adversaries Through
Sanctions Act, as well as all other laws and regulations
involving criminal activities relating to United States imports
and exports, trade-based money laundering, and smuggling.
Background and Need for the Legislation
U.S. trade policy is a vital tool of the U.S. government to
protect U.S. businesses and consumers, ensure U.S.
competitiveness, and accomplish foreign policy objectives. For
example, the Trump Administration enacted tariffs against a
variety of goods from the People's Republic of China (PRC) to
protect U.S. businesses and producers from unfair Chinese trade
practices, promote the ability of U.S. businesses and producers
to compete fairly with the PRC, and deter the Chinese
government from continuing to harm U.S. interests and break
international laws and norms.\1\ The Biden-Harris
Administration has retained most Trump Administration tariffs
against the PRC.\2\ The failures of the DOJ in prosecuting
entities and individuals who commit crimes to contravene U.S.
trade policy, including with respect to the PRC, undermines the
effectiveness of those policies and leads directly to harm for
U.S. interests and our economy.
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\1\U.S. Trade Rep, USTR Issues Tariffs on Chinese Products in
Response to Unfair Trade Practices (June 15, 2018), https://ustr.gov/
about-us/policy-offices/press-office/press-releases/2018/june/ustr-
issues-tariffs-chinese-products.
\2\Joseph R. Biden, Jr., Memorandum on Actions by the United States
Related to the Statutory 4-Year Review of the Section 301 Investigation
of China's Acts, Policies, and Practices Related to Technology
Transfer, Intellectual Property, and Innovation (May 14, 2024), https:/
/www.whitehouse.gov/briefing-room/presidential-actions/2024/05/14/
memorandum-on-actions-by-the-united-states-related-to-the-statutory-4-
year-review-of-the-section-301-investigation-of-chinas-acts-policies-
and-practices-related-to-technology-transfer-intellectua/.
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In 2016, the Enforce and Protect Act (EAPA) was enacted to
augment the Trade Facilitation and Trade Enforcement Act of
2015 (TFTEA).\3\ EAPA was intended to improve trade law
enforcement and duty collection for anti-dumping and
countervailing duties (AD/CVD).\4\ Pursuant to EAPA, U.S.
Customs and Border Protection (CBP) has identified 299 separate
cases of entities avoiding AD/CVD duties between 2016 and
2024.\5\ Of these 299 cases, approximately 74 percent were
based on goods suspected of originating in the PRC.\6\ The PRC-
connected cases include eight cases for outright failure to pay
AD/CVD duties, nine cases for misclassification of goods, three
cases for using the wrong AD/CVD rate, and 201 cases of
transshipment.\7\ The transshipment cases included instances of
goods being transshipped from the PRC through more than a dozen
different countries, including Malaysia, Thailand, India,
Vietnam, and Cambodia, in an attempt to conceal the true origin
of the goods and avoid duties.\8\
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\3\Enforce and Protect Act (EAPA) Statistics, U.S. Customs and
Border Prot., https://www.cbp.gov/trade/trade-enforcement/tftea/eapa/
statistics (last visited Sept. 23, 2024).
\4\New to EAPA, U.S. Customs and Prot., https://www.cbp.gov/trade/
eapa/new-to-eapa (last visited Sept. 23, 2024).
\5\Enforce and Protect Act (EAPA) Statistics, U.S. Customs and
Border Prot., https://www.cbp.gov/trade/trade-enforcement/tftea/eapa/
statistics (last visited Sept. 23, 2024).
\6\Id.
\7\Id.
\8\Id.
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In addition to the AD/CVD violations originating in the
PRC, in the past two years CBP has identified 3,976 shipments
entering the United States with a total value of $750 million
that contain goods mined, produced, or manufactured wholly or
in part in the Xinjiang Uyghur Autonomous Region.\9\ Based on
their origin, these goods are presumed to have been produced by
forced labor, which makes them illegal to import into the
United States under U.S. sanctions.\10\ Economic sanctions were
imposed on the PRC to penalize the Chinese government's
persecution and exploitation of religious minorities, including
its Uyghur population, in the hopes that such trade measures
would dissuade the Chinese government's human rights
abuses.\11\
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\9\Uyghur Forced Labor Prevention Act Statistics, U.S. Customs and
Border Prot., https://www.cbp.gov/newsroom/stats/trade/uyghur-forced-
labor-prevention-act-statistics (last visited Sept. 23, 2024).
\10\Id.
\11\An Act to Ensure That Goods Made With Forced Labor in the
Xinjiang Uyghur Autonomous Region of the People's Republic of China Do
Not Enter The United States Market, And For Other Purposes, Pub. L. No.
117-78, 135 Stat. 1525 (2021).
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In FY2023 alone, CBP seized counterfeit goods with a total
value of more than $2.7 billion. Like AD/CVD violations, goods
originating from the PRC (including Hong Kong) made up more
than 80 percent of these seizures.\12\ Counterfeit goods harm
U.S. businesses both by diverting sales away from legitimate
goods and by damaging the value and customer goodwill
associated with the affected brands because counterfeit goods
often are of lesser quality.\13\ In many cases, the counterfeit
goods also pose health and safety risks for unwitting U.S.
consumers.\14\
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\12\The Truth Behind Counterfeits, U.S. Customs and Border Prot.,
https://www.cbp.gov/trade/fakegoodsrealdangers (last visited Sept. 23,
2024).
\13\Id.; Edwina FitzHugh & Lindsey Annable, How does counterfeiting
affect brands?, Potter Clarkson, https://www.potterclarkson.com/
insights/how-does-counterfeiting-affect-brands/ (last visited Sept. 23,
2024).
\14\Id.
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Despite the large number of cases of duty evasion, forced
labor exclusions, and counterfeit good imports, there have been
few actual prosecutions. In 2020, a criminal indictment was
issued against a Houston-based company for conspiring to avoid
anti-dumping duties on vehicle and truck tires from the
PRC.\15\ And in early 2024, federal agents raided a subsidiary
of Qingdao Susong in Ohio, following allegations that Qingdao
Susong was illegally transshipping auto parts through Thailand
to evade U.S. duties.\16\ These cases appear to be the
exceptions, however.
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\15\Press Release, 15 named in $26 million international trade
fraud scheme, U.S. Dept. of Just. (Dec. 15, 2020), https://
www.justice.gov/usao-sdtx/pr/15-named-26-million-international-trade-
fraud-scheme.
\16\Bethany Allen-Ebrahimian, DHS raids Chinese car parts maker's
U.S. headquarters, Axios (Jan. 21, 2024), https://www.axios.com/2024/
01/21/dhs-raid-chinese-car-parts-makers-us-tariff.
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The need to prioritize prosecutions is likely to increase
in light of recent actions taken by the Biden-Harris
Administration related to the de minimis exception. The de
minimis exception currently exempts from duties and tariffs
single daily importations of goods with a value of less than
$800.\17\ Nearly four million packages enter the U.S. every day
under this exception.\18\ On September 13, 2024, the Biden-
Harris Administration announced that it would promulgate rules
to exclude from the de minimis exception goods that are subject
to tariffs imposed under Sections 201 or 301 of the Trade Act
of 1974 or Section 232 of the Trade Expansion Act of 1962.\19\
Approximately 40 percent of U.S. imports are covered by Section
301 tariffs, including 70 percent of textile and apparel
imports from the PRC.\20\ Applying Section 301 tariffs in the
small parcel environment will result in a significant expansion
of the numbers of imports subject to tariffs, and will
potentially encourage additional fraud by PRC-based bad actors.
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\17\19 U.S.C. Sec. 1321(a)(2)(C).
\18\Ronald A. Oleynik, Robert A. Friedman, Andrew K. McAllister,
and Sophie Jin, U.S. Government Plans to Restrict Low-Value Imports
Under De Minimis Exemption, Holland & Knight (Sept. 18, 2024), https://
www.hklaw.com/en/insights/publications/2024/09/us-government-plans-to-
restrict-low-value-imports-under-de-minimis.
\19\FACT SHEET: Biden-Harris Administration Announces New Actions
to Protect American Consumers, Workers, and Businesses by Cracking Down
on De Minimis Shipments with Unsafe, Unfairly Traded Products, The
White House (Sept. 13, 2024), https://www.whitehouse.gov/briefing-room/
statements-releases/2024/09/13/fact-sheet-biden-harris-administration-
announces-new-actions-to-protect-american-consumers-workers-and-
businesses-by-cracking-down-on-de-minimis-shipments-with-unsafe-
unfairly-traded-products/.
\20\Id.
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To ensure that the DOJ prioritizes the prosecution of these
and other trade-related crimes, H.R. 9151 establishes a new
initiative within the Criminal Division of DOJ to address
trade-related crimes. The initiative will focus on identifying
and prosecuting individuals engaged in trade-related crimes,
including criminal activities in furtherance of the evasion of
duties, tariffs, and other import- and export-related fees,
import and export restrictions, or requirements imposed by the
Tariff Act of 1930, the Trade Expansion Act of 1962, the Trade
Act of 1974, and the Countering America's Adversaries Through
Sanctions Act, as well as all other laws and regulations
involving criminal activities relating to United States imports
and exports, trade-based money laundering, and smuggling.
Further, to ensure effective Congressional oversight and to
prevent DOJ from ignoring the trade-crime objectives, H.R. 9151
requires robust annual reporting to key committees in the House
and Senate.
Hearings
For the purposes of clause 3(c)(6)(A) of House rule XIII,
the following hearing was used to develop H.R. 9151:
``Intellectual Property: Enforcement Activities by the
Executive Branch,'' a hearing held on May 7, 2024, before the
Subcommittee on Courts, Intellectual Property, and the
Internet, of the Committee on the Judiciary. The Subcommittee
heard testimony from the following witnesses:
Michael Ball, Acting Assistant Director for
the Global Trade Division, Homeland Security
Investigations, U.S. Department of Homeland Security;
Josh Goldfoot, Acting Deputy Assistant
Attorney General, Criminal Division, U.S. Department of
Justice; and
Brandon Lord, Executive Director of Trade
Policy and Programs, Office of Trade, U.S. Customs and
Border Protection, U.S. Department of Homeland
Security.
The hearing examined how the executive branch was enforcing
laws pertaining to trade-related crimes and how bad actors
exploit those enforcement practices.
Committee Consideration
On September 25, 2024, the Committee met in open session
and ordered the bill, H.R. 9151, favorably reported with an
amendment in the nature of a substitute, by voice vote.
Committee Votes
In compliance with clause 3(b) of House rule XIII, the
Committee states that no roll call votes occurred during the
Committee's consideration of H.R. 9151.
Committee Oversight Findings
In compliance with clause 3(c)(1) of House rule XIII, the
Committee advises that the findings and recommendations of the
Committee, based on oversight activities under clause 2(b)(1)
of rule X of the Rules of the House of Representatives, are
incorporated in the descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives does not apply where a cost estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974 has been timely submitted prior to filing of the report
and is included in the report. Such a cost estimate is included
in this report.
Congressional Budget Office Cost Estimate
With respect to the requirement of clause 3(c)(3) of rule
XIII of the Rules of the House of Representatives and section
402 of the Congressional Budget Act of 1974, the Committee has
received the enclosed cost estimate for H.R. 9151 from the
Director of the Congressional Budget Office:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
H.R. 9151 would require the Department of Justice (DOJ) to
establish a unit within its criminal division to investigate
and prosecute trade-related crimes, including the evasion of
sanctions, tariffs, or duties; trade-based money laundering;
and smuggling. The bill also would require DOJ to report
annually to the Congress on the unit's activities.
Based on the costs of similar programs and activities, CBO
estimates that DOJ would need 10 people, at an average annual
cost of $250,000 per person in 2025, and $8 million annually in
administrative costs to implement the bill's requirements.
Accounting for anticipated inflation, CBO estimates that
implementing H.R. 9151 would cost $50 million over the 2025-
2029 period. Any related spending would be subject to the
availability of appropriated funds.
The costs of the legislation, detailed in Table 1, fall
within budget function 750 (administration of justice).
TABLE 1.--ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 9151
----------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-------------------------------------------------------
2025 2026 2027 2028 2029 2025-2029
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Estimated Authorization................................. 5 11 12 12 12 52
Estimated Outlays....................................... 5 10 11 12 12 50
----------------------------------------------------------------------------------------------------------------
The CBO staff contact for this estimate is Jeremy Crimm.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Director of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
Committee Estimate of Budgetary Effects
With respect to the requirements of clause 3(d)(1) of rule
XIII of the Rules of the House of Representatives, the
Committee adopts as its own the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of House rule XIII, no provision
of H.R. 9151 establishes or reauthorizes a program of the
federal government known to be duplicative of another federal
program.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
House rule XIII, H.R. 9151 provides for the establishment of an
initiative or similar structure within the Criminal Division of
the U.S. Department of Justice (DOJ) to address trade-related
crimes.
Advisory on Earmarks
In accordance with clause 9 of House rule XXI, H.R. 9151
does not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits as defined in clauses
9(d), 9(e), or 9(f) of House rule XXI.
Federal Mandates Statement
The Committee adopts as its own the estimate of federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act (Pub. L. 104-
1).
Section-by-Section Analysis
Section 1. Short title
The ``Protecting American Industry and Labor from
International Trade Crimes Act of 2024.''
Section 2. Trade-related crimes defined
This section defines ``trade-related crimes'' as violations
of law that are implicated by criminal activities in
furtherance of the evasion of duties, tariffs, important
export-related fees, import and export restrictions, various
trade laws, and laws and regulations involving criminal
activities relating to imports, exports, trade-based money
laundering, and smuggling.
Section 3. Establishment of new structure to prosecute international
trade crimes
This section requires the Criminal Division of the U.S.
Department of Justice to establish an initiative to investigate
and prosecute trade-related crimes. In support of the
initiative, the Attorney General must create include new
positions for criminal trial attorneys and support personnel
responsible for leading and coordinating trade-related crime
investigations and cases, ensure experienced prosecutors
support the effort, and promote coordination between law
enforcement, industry, and the public.
Section 4. Duties and functions of new trade crimes structure
This section charges the initiative with increasing
capabilities and capacity to prosecuted trade-related crimes,
increase the number of trade-related crimes investigated and
prosecuted, including under certain specific statutory
provisions, participate in training with law enforcement and
Federal agencies, develop multi-jurisdictional responses and
partnerships to pursue trade-related crimes, participate in
nationally coordinated investigations, and ensure consultation
among components enforcing laws against trade-related crimes.
Section 5. Annual report to Congress
This section requires the Attorney General, in coordination
with the Secretary of Homeland Security, to provide an annual
report on the investigation and enforcement of trade-related
crimes, which will include annual statistics on prosecutions,
how funds were utilized, and whether additional funds are
needed.
Additional Views
H.R. 9151, the ``Protecting American Industry and Labor
from International Trade Crimes Act of 2024,'' would create a
task force within the Department of Justice (DOJ) to increase
the prosecution of trade-related crimes. Although DOJ already
has dedicated personnel to enforce laws protecting Americans
from illegal products, limited funding prevents prosecutors
from doing more. This legislation would ensure that a task
force across the DOJ is given the tools it needs to enforce our
trade laws, but its effectiveness will depend on whether
sufficient resources are dedicated to its implementation.
While I continue to support this legislation, I was
disappointed that the Manager's Amendment to H.R. 9151 removed
crucial language calling for specific funding to carry out the
bill. Any task force created in this legislation has an
uncertain future if it is not given the resources needed to
survive. Without funding, the myriad investigators,
prosecutors, and support staff envisioned for the task force
will never be hired. You cannot increase trade crime
enforcement without increasing the number of prosecutors
working on the issue, and you cannot increase the number of
staff handling trade crimes without more funding. I sincerely
hope we commit dedicated appropriations to this program, and
all aspects of DOJ, in the days and months ahead.
Many nations and non-state entities violate U.S. trade
statutes each year. These actions raise national security
concerns for other countries, including the United States, and
heighten scrutiny over how foreign nations may be manipulating
international ``free market'' rules, such as those supplied by
the World Trade Organization, to their advantage.
Trade crimes affect all Americans, from consumers to
business owners. Examples include exploding counterfeit
batteries that cause e-cigarettes to maim users, computer chips
equipped with spyware in our product stream that endanger
military secrets, and handbags made with forced Uyghur labor
passed off as fair-trade materials. These are terrible outcomes
with clear victims, and United States law enforcement should
ensure these cases never happen again.
Other trade crimes may not have a clear victim or a defined
perpetrator, but they are equally pernicious. For example,
cyber intrusions can risk a company's trade secrets without
their knowledge--they may never become aware of the data leak,
but a foreign competitor can use the intellectual property to
unfairly compete with the targeted company. Counterfeit
products that look identical to a brand's trademark can cause
irreparable damage to a small business or designer--victims can
suffer reputational damage, lose the opportunity to ``break
into'' a specific market, and otherwise lose revenue that would
have gone to them.
Americans are protected from these and other trade crimes
by a patchwork of national security laws, including the Tariff
Act of 1930, the Toxic Substances Control Act, and many others.
These statutes protect against a wide variety of crimes that
impact the health, safety, and financial security of Americans,
from the importation of counterfeit goods to the commission of
trade secret theft through economic espionage.
Intellectual property holders in the United States rely on
three primary mechanisms for enforcement of their rights. These
mechanisms include civil, administrative, and criminal
remedies. Each enforcement mechanism carries with it unique
costs and potential benefits for rights holders. Although the
U.S. government has a role to play in all enforcement
mechanisms, the U.S. government has a direct and primary role
in the administrative and criminal realms.
Numerous federal agencies serve this direct role in the
enforcement of intellectual property in the administrative and
criminal realms; however the DOJ leads on prosecution of IP
crimes, including trademark counterfeiting, copyright piracy,
and economic espionage. This responsibility places the agency
in the key role of enforcer of trade protections.
It is imperative that DOJ has the tools it needs to ensure
Americans are not taken advantage of by foreign nations seeking
to violate our laws and do us harm. H.R. 9151, if properly
funded, would place resources and a dedicated team in a
position to protect consumers, entrepreneurs, and our military
from harm. I support this legislation, and I hope that the
Majority will commit itself to providing the resources
necessary for it to succeed.
Jerrold Nadler,
Ranking Member.
[all]