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The Impact of Sequestration on Homeland Security: Scare Tactics or Possible Threat?

U.S. Customs & Border Protection - U.S. Department of Homeland Security

Written testimony of DHS Management Directorate, U.S. Customs & Border Protection, U.S. Immigration & Customs Enforcement and the Transportation Security Administration for a House Committee on Homeland Security, Subcommittee on Oversight and Management Efficiency hearing titled “The Impact of Sequestration on Homeland Security: Scare Tactics or Possible Threat?”

CBP Targets, Intercepts Illegally Imported Vehicles

U.S. Customs & Border Protection /

Washington — U.S. Customs and Border Protection is on the lookout for illegal imports of Land Rover Defender vehicles that do not meet federal safety standards, including the standard that requires airbags. This year, CBP has identified dozens of illegal shipments at various ports of entry across the United States, including Baltimore, Charleston, S.C., Jacksonville, Fla., and Savannah, Ga.

Most recently on March 5, CBP officers at the port of Norfolk, working closely with the U.S. Department of Transportation’s National Highway Traffic Safety Administration, seized a shipment of two imported Land Rover Defender vehicles. CBP officers seized the shipment following the determination that the vehicle identification numbers on the vehicles were found to be fraudulently manipulated. The VINs were changed to make the vehicles appear older than they are to take advantage of an exemption that allows vehicles that are at least 25 years old to be imported without regard to whether they comply with federal motor vehicle safety standards. The shipment arriving from Great Britain had been targeted for examination by CBP’s Commercial Targeting and Analysis Center in Washington, D.C.

“Ensuring the safety of imported products is a top priority for CBP,” said Allen Gina, CBP’s assistant commissioner for international trade. “The concerted targeting efforts of CTAC and the vigilance of CBP officers and import specialists at our ports of entry will help ensure that unsafe vehicles from overseas markets do not reach our roadways.”

NHTSA regulates imported motor vehicles. Illegally imported vehicles can pose potential safety hazards to drivers and all road users.

“Safety is the Department of Transportation’s top priority,” said NHTSA Administrator David Strickland. “Those who illegally import Defenders and fraudulently offer the vehicles for sale are motivated by profit and do so at the expense of U.S. consumers and legitimate U.S. businesses that follow the law. We continue to work with our partners at CBP and the CTAC to prevent the importation of illegal vehicles and to inform consumers about the presence of and potential safety risks associated with these vehicles.”

Since October 2012, CBP has seized more than a dozen illegal Land Rover Defender vehicles for violating NHTSA and Environmental Protection Agency regulations, for a total value of approximately $250,000. The overseas value for this model of vehicle is approximately $25,000. However, the resale value in the U.S. can run as much as $150,000 per vehicle depending on its model year, condition, and because these vehicles cannot be lawfully imported into the U.S. unless they are at least 25 years old. A significant portion of those shipments arrived into the U.S. via sea cargo from Great Britain.

Prospective buyers of imported vehicles can confirm the validity of the vehicle by checking the VIN in a vehicle history report. Buyers who suspect a vehicle is being illegally imported are encouraged to report suspected trade violations. All information submitted to CBP is voluntary and confidential. To report a possible trade violation, please visit eAllegations.  ( eAllegations )

The CTAC combines resources and staff from several government agencies, including NHTSA and EPA, to protect the American public from harm caused by unsafe imported products. For additional information on the CTAC and import safety, please visit, and click on the “Priority Trade Issues” tab.

Customs Broker Assessed $8 Million in Damages for Trademark Infringement

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP /

On March 28, 2013, a jury awarded $8 million dollars in damages against a Customs Broker found to have engaged in a conspiracy to import fake Coach® handbags and wallets in the case of Coach v. Celco Customs Services and Celine Wang, Ct. No. 11-cv-10787 (Central District of California).

On June 24, 2009, CBP seized a shipment of “catalogs” which actually contained 22,040 handbags and 10,300 wallets. Entry was attempted utilizing a fraudulent Power of Attorney (“POA”) allegedly issued by a biochemical company. Coach claimed that the customs broker, Celine Wang, and her company Celco Customs Services (“Defendants”), knew the POA was fraudulent and were actively involved in a conspiracy to import counterfeit Coach® handbags and wallets into the United States.

Coach alleged in its complaint that members of the conspiracy included: unknown John Doe defendants that had the responsibility of manufacturing the counterfeit handbags and wallets in China; others that had the responsibility of arranging for the transportation of the fake handbags and wallets from China to the Port of Los Angeles/Long Beach; and still others that had the responsibility of providing the financing for the manufacture and transportation of the fake handbags and wallets. Finally, Coach alleged that unknown persons stole the identity of a biochemical company and created fraudulent import documents in the name of that company.

Coach claimed that the POA received by Defendants was so patently false, fraudulent, and invalid on its face that no legitimate, law-abiding customs broker would have relied upon it to file entry papers with CBP. In this regard, Coach cited to the following inconsistencies in the POA: it was received from a foreign freight forwarder rather than directly from the importer and the broker had no direct contact with the importer; the tax identification number on the POA belonged to a different company; an ABI/ACS bond query performed by the broker confirmed the tax identification number and importer address discrepancy; the forwarder provided a “HOTMAIL” e-mail address for the importer; the POA had a duration of nine (9) days; even though the commercial invoice, packing list and bill of lading were addressed to the party alleged to have issued the POA, the broker made entry in the name of the company that matched the tax identification number in ABI. The broker sent all correspondence and invoicing for the shipment to the forwarder despite not having permission from the importer to do so and declined to respond to subsequent requests for copies of the documents from the importer of record.1

Significantly, Coach did not allege that Wang and Celco were liable for trademark infringement simply because they failed to take precautionary steps that would have alerted them to the counterfeiting activity. To the contrary, Coach alleged that Wang and Celco already knew about the counterfeiting activity and were thus conspirators to the fraud.

In civil cases, when a jury makes a decision in favor of the plaintiff, the jury determines the defendant’s liability and the amount of money damages (if any) a defendant must pay. In this case, there is no written opinion by the judge, but rather findings by the jury as to the facts at issue in the case. Coach’s Complaint alleged three claims against Defendant’s on which the jury found a verdict:

1. The Defendants contributed to the infringement of six (6) of Coach’s registered trademarks;

2. The Defendants contributed to the false designation of the origin of the imported counterfeit Coach handbags and wallets; and

3. The Defendants unlawfully imported Coach® handbags and wallets without the trademark holder’s consent.

The jury found for Coach and determined that it had not consented to the importation at issue and that the imported goods did have a false country of origin, to which Defendants contributed. Finally, the jury found that the customs broker “[knew] or [had] reason to know that the person or entity that falsely designated the origin of goods was using its customs brokerage services to do so.”

Coach sought statutory damages in this case. The jury could have awarded between $1,000 and $2,000,000 for each of Coach’s trademarks that was infringed (not to exceed $16,000,000). The jury awarded $4,000,000 against Wang personally and $4,000,000 against her Company for contributing to the infringement of six of Coach’s registered trademarks.

The case is significant for a number of reasons, not the least which is that unlike prior attempts to assign liability to customs brokers for trademark infringement, Coach did not attempt to assert a private right of action against the broker under Title 19 for failing to adequately validate the POA. Instead, Coach relied upon the broker’s actual knowledge of the counterfeiting scheme to hold them accountable under the trademark statute.
1 Coach also alleged that Defendants prepared a Delivery Order for the purpose of picking up and transporting the counterfeit handbags and wallets to parts unknown within the United States. Coach alleged that by preparing the Delivery Order, Defendants directly facilitated the transportation of the counterfeit COACH brand handbags and wallets in commerce in the U.S.

FDA Approves Abuse-Deterrent Labeling for Reformulated OxyContin

Food & Drug Administration /

Agency will not approve generics to original OxyContin

The U.S. Food and Drug Administration today approved updated labeling for Purdue Pharma L.P.’s reformulated OxyContin (oxycodone hydrochloride controlled-release) tablets. The new labeling indicates that the product has physical and chemical properties that are expected to make abuse via injection difficult and to reduce abuse via the intranasal route (snorting).

Additionally, because original OxyContin provides the same therapeutic benefits as reformulated OxyContin, but poses an increased potential for certain types of abuse, the FDA has determined that the benefits of original OxyContin no longer outweigh its risks and that original OxyContin was withdrawn from sale for reasons of safety or effectiveness. Accordingly, the agency will not accept or approve any abbreviated new drug applications (generics) that rely upon the approval of original OxyContin.

The FDA approved the original formulation of OxyContin in Dec. 1995. The product was abused, often following manipulation intended to defeat its extended-release properties. Such manipulation causes the drug to be released more rapidly, which increases the risk of serious adverse events, including overdose and death. In April 2010, the FDA approved a reformulated version of OxyContin, which was designed to be more difficult to manipulate for purposes of misuse or abuse. Purdue stopped shipping original OxyContin to pharmacies in August 2010.

“The development of abuse-deterrent opioid analgesics is a public health priority for the FDA,” said Douglas Throckmorton, M.D., deputy director for regulatory programs in the FDA’s Center for Drug Evaluation and Research. “While both original and reformulated OxyContin are subject to abuse and misuse, the FDA has determined that reformulated OxyContin can be expected to make abuse by injection difficult and expected to reduce abuse by snorting compared to original OxyContin.”

The FDA has determined that the reformulated product has abuse-deterrent properties. The tablet is more difficult to crush, break, or dissolve. It also forms a viscous hydrogel and cannot be easily prepared for injection. The agency has determined that the physical and chemical properties of the reformulated product are expected to make the product difficult to inject and to reduce abuse via snorting. However, abuse of OxyContin by these routes, as well as the oral route, is still possible. The reformulated product also may reduce incidents of therapeutic misuse, such as crushing the product to sprinkle it onto food or to administer it through a gastric tube. When FDA finds that a new formulation has abuse deterrent properties, the agency has the authority to require generics to have abuse-deterrent properties also.

The agency review of this issue included an analysis of the following:

  • Citizen petitions requesting that the agency determine whether original OxyContin was voluntarily withdrawn from sale for reasons other than safety or effectiveness;
  • Comments submitted to the public dockets associated with these petitions;
  • Information concerning original and reformulated OxyContin and the withdrawal of original OxyContin;
  • Clinical data, peer-reviewed literature, and other information concerning postmarketing adverse events associated with original OxyContin, reformulated OxyContin, and other extended-release oxycodone products.

Postmarketing assessments of the impact of reformulated OxyContin on abuse are ongoing, and the FDA will update its evaluation of the effects of reformulated OxyContin on abuse as new data become available. 

The FDA, together with other public health agencies, continues to encourage the development of abuse-deterrent formulations of opioids and believes that such products will help reduce prescription drug abuse. At the same time, the FDA remains committed to ensuring that patients with pain have appropriate access to opioid analgesics.

Press Release – FAA and Port Authority of New York and New Jersey Reach Agreement on Airport Safety Violations

Federal Aviation Administration /

WASHINGTON – The Federal Aviation Administration (FAA) and the Port Authority of New York and New Jersey (PANYNJ) have reached a settlement agreement about aircraft rescue and firefighting (ARFF)  violations from December 2010 to June 2012 at four New York area airports owned and operated by the PANYNJ — John F. Kennedy, Teterboro, LaGuardia, and Newark Liberty International.

“We expect all airports to comply with our safety regulations and to correct any deficiencies immediately,” said U.S. Transportation Secretary Ray LaHood.  “These violations were egregious, and they will not be tolerated.”

Under the agreement, the PANYNJ agrees to pay a $3.5 million fine within 30 days. If there is a violation of the settlement agreement, the FAA will impose an additional fine of $1.5 million and will assess an additional $27,500 daily for each violation.  In addition to the fine, the PANYNJ has agreed to take the following actions, with FAA approval, to address the underlying problems that led to systemic noncompliance with ARFF requirements at the four airports:

  • The Port Authority will create a dedicated ARFF force to carry out airport-related ARFF functions with no collateral police officer duties.
  • The staff will report directly to the Department of Aviation and be operational no later than March 31, 2014.
  • The Port Authority will hire an ARFF fire chief and facility captains as soon as possible, but no later than March 31, 2014.
  • The Port Authority will submit a curriculum for training to the FAA on or before December 31, 2013, which includes at least 75 hours of initial ARFF training and 40 hours of annual recurrent firefighting training in addition to Part 139 training, pertaining to an airport’s operational and safety standards and providing for such things as firefighting and rescue.
  • The ARFF personnel will work a 12-hour shift.
  • The Port Authority will amend the airport certification manuals for the four airports to include: an organizational chart; a process to maintain ARFF training records; and a description of ARFF operations, including shift assignments, personnel training records management, and Department of Aviation oversight.
  • The Port Authority will conduct monthly internal audits of ARFF training and shift assignments and annual external audits to ensure that all ARFF personnel assigned to a shift are trained.

“We expect the Port Authority to have trained safety personnel to ensure the safety of the travelling public and airport personnel, just like we have at all airports in the United States,” said FAA Administrator Michael P. Huerta.

The FAA became aware of ARFF violations as a result of an annual airport certification safety inspection of JFK in December 2011. The FAA also discovered similar violations at Teterboro, which prompted a full review of training at LaGuardia, Newark Liberty International, and Stewart International Airports. The review of ARFF training revealed violations at LaGuardia and Newark, with no violations at Stewart.

The FAA believes the settlement agreement provides the best long-term solution to ensure ARFF compliance, given the systemic nature of the PANYNJ airport problems.

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