- The Washington Times - Tuesday, November 8, 2011

The chairman of the Senate Armed Services Committee pledged Tuesday to introduce a bill to stop fake and illegally recycled electronic parts from China making their way into vital U.S. defense equipment.

Some industry groups and other observers said the proposal is impractical and an overreaction to revelations that millions of electronic components in U.S. weapons systems are counterfeit or recycled from electronic scrap by street traders in China.

“If China will not act promptly, then we should treat all electronic parts from China as suspect counterfeits,” said Sen. Carl Levin, Michigan Democrat, “That would mean requiring inspections at our ports of all shipments of Chinese electronic parts to ensure that they are legitimate.”

The cost of inspections “would be borne by shippers, as is the case with other types of border inspections,” Mr. Levin said.

He added the measures would be required until the Defense Department had established a trusted supplier program for electronic parts, including regular certification and audit requirements.

“We can’t tolerate the risk of a ballistic-missile interceptor failing to hit its target, a helicopter pilot unable to fire his missiles or any other mission failure because of a counterfeit part,” said Sen. John McCain of Arizona, the committee’s senior Republican.

Mr. McCain and Mr. Levin said the Chinese government at the very least is ignoring wide-scale counterfeiting of electronic components. Mr. Levin said that Beijing had refused to issue visas to committee staff investigating the supply chain for fraudulent parts back into China.

A spokesman at the Chinese Embassy told The Washington Times that Beijing supports the fight against counterfeit goods.

“While there may be some loopholes in law enforcement efforts in a vast country like China, the Chinese government takes an attitude of zero-tolerance towards fake and counterfeit products,” said Wang Baodong in an email.

Mr. Wang added that Beijing had refused visas for committee staff because “conducting investigations in China involves law enforcement and China’s judicial sovereignty.”

He urged lawmakers to take the matter up “through the normal channel of China-U.S. law enforcement cooperation.”

Executives from defense and other industries generally agreed with lawmakers that the issue of counterfeit electronic parts is a problem, but some reacted with concern to the committee proposals.

“U.S. Customs inspectors are already overwhelmed checking a single digit percentage of imports,” said William A. Reinsch, head of the National Foreign Trade Council, a business group that lobbies for free trade.

He said Mr. Levin’s proposal for total inspections of Chines<e electronic imports sounded “logistically impossible.”

Former senior Customs official Jayson P. Ahern said, “In general, that kind of shotgun response is excessive and unnecessary.”

Mr. Ahern, now with the Chertoff Group security consultants, advocated looking at individual shipments on a case-by-case basis.

“You ask, ‘Who is the supplier?’ ‘Where are the parts headed?’ questions like that,” he said.

Even some executives from the defense industry, which has publicly praised the work of committee investigators, were privately concerned about the proposal.

“It’s very possible an over-broad policy [response] might have unintended consequences,” said one executive at a defense industry trade association.

“We have major concerns about the implementation” of the proposed new rules, he said. He added industry lobbyists would “get to the table [with the committee] to work out an effective and technically feasible solution.”

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