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Awareness Timeline

 



Awareness Timeline


1986


1986 – China's quest began for admission to the World Trade Organization (WTO)


1995


1995 - The Internet was commercialized
1995 (March 1) – Yahoo incorporated
1995 - Electronic Resellers Association Inc. (ERA) founded

Primary Objectives:
- Information Sharing
- Education
Most Common Complaint types:
- Cancelled Purchase Orders
- Past Due Invoices
- NSF Checks


1998


1998 – Google incorporated as a privately held company

The company's mission statement: "To organize the world's information and make it universally accessible and useful."

1998 - Electronic Resellers Association International Inc. (ERAI)

Name changed to reflect ERA had become an internationally recognized organization.
Google made the world a much smaller place.
International trade became readily available for everyone; not just large corporations.


2001


2001 (November) – China Admitted to the WTO

"A monumental change to the world trading system."
"An event of historic proportions for the world trading system."
- Kofi Annan, UN Secretary General

"I believe that as this century unfolds and people look back on this day, they will conclude that in admitting China to the WTO we took a decisive step in strengthening the global economic trading system."
- Robert Zoellick, US Trade Representative

"Just like every member of the WTO, China will have to deliver on its commitments, and we will be watching this very carefully,"
-Pascal Lamy, EU trade commissioner

2001 (November 29) – ERAI receives first nonconforming part complaint against a China-based distributor

3A Century aka Gold Advanced aka JXJ
Part number: TCM3105DW
Description of the product nonconformance:

Parts arrived in Samsung tubes (ordered TI parts). Numerous mixed date codes arrived in a single tube. Solder splash present on part leads. There were 'wash marks' and smears on the upper surface of the chip.

Within a few months, Chinese distributors began refurbishing and remarking parts to have consistent date and lot codes in order to pass used parts off as new.



2002


2002 (January) – ERAI Launches High Risk / Suspect Counterfeit Part Database
2002 (April 19) - ERAI Industry Advisory Committee formed; we saw it coming...
  • Ethical standards in the industry
  • Counterfeit/Substandard parts
  • ISO
  • ESD
  • ERAI’s role now and in the future
  • Negative advertising campaigns launched by AGMA & NEDA


2003


2003 (March 1) – IDEA Public Launch

ERAI Executive Conference, Las Vegas, NV

Objectives:
  • Promote the independent distribution industry through a media advocacy campaign.
  • Improve the quality of products and services through a quality certification program, educational seminars and conferences.
  • Promote the study, development and implementation of techniques and methods designed to improve the business of independent distributors.
2003 (March 31) – GIDEP Alert number CE9-A-03-02 issued by Texas Instruments

"Texas Instruments has received notice of counterfeit devices bearing the TI trademark and part number being sold through various brokers who are not authorized TI distributors.

In this specific case, the devices are marked as 5962-8961405QXCA and SMJ27C010A-15JM, date code 9939A1, and country of origin as Singapore. TI production in Singapore was terminated prior to this date. The devices in question contain SGS-Thompson die and will not program correctly using the TI part number.

Note that Austin Semiconductor Incorporated acquired the TI military memory product line and currently supplies product under the ASI trademark. Per ASI, all ASI 27C256 devices are manufactured using authentic TI die."

2003 (April 15) – GIDEP Alert number B8-A-03-01 issued by Textron Systems

"Textron Systems has experience a high failure rate of parts marked LT1097S8 with a date code of 0103 and a Linear Technology Corp. logo. Four parts were returned to Linear Technology Corp (LTC) for failure analysis. LTC has informed Textron Systems that the parts are counterfeit. Textron Systems had purchased the parts through a distributor that was not franchised by LTC.

LTC electrically tested the parts and confirmed the failures as catastrophic. LTC performed visual and DPA analysis. They discovered that the top of the parts appeared to have been sanded down and remarked. The back-marks on the part indicate the units were manufactured over eight years ago and are inconsistent with the year 2001 date code on top of the parts. DPA revealed that the bond and probe metallization had been severely corroded."


2004


2004 (January) – ERAI travels to China
2004 - U.S. Chamber of Commerce's Global Intellectual Property Center organized itself through a broad-based business coalition, the Coalition Against Counterfeiting and Piracy (CACP).
2004 (January 27) – Secretary of Defense releases Memo for Service Acquisition Executives

Subject: Encouraging Industry Participation in the Trusted Foundry Pilot Program
Back door threats realized….counterfeits not the only problem!


2006


2006 (June) - SIA launches the Anti- Counterfeiting Task Force (SIA ACTF)
2006 (October) - IDEA releases IDEA-STD-1010-A-Acceptability of Electronic Components Distributed in the Open Market

Standard specifically written to identify nonconforming/suspect counterfeit parts

"Counterfeits have a name and a face!"
2006 (November 29) – Counterfeit Components Detection & Prevention Symposium hosted by Component Technology Institute (CTI) (attended by Phil Zulueta who later becomes SAE Aerospace G-19 Committee Chairman.)
2006 (December) – ERAI’s Second Investigative Trip to China

Investigation specific to the handling of OEM excess by Chinese based OEMs and CMs.


2007


2007 (April 16) – ERAI Special Report Released – A Time For Change
2007 (May) – Electronic Resellers Association International Inc. is renamed ERAI Inc. (the term “resellers” removed as ERAI moves to share services with the entire supply chain). Membership no longer restricted to distributors only. Database opened to OEMs, CMs, US Government Agencies, law enforcement, etc.
2007 (June) - the U.S. Department of the Navy, Naval Air Systems Command (NAVAIR) asked the Bureau of Industry and Security’s (BIS) Office of Technology Evaluation (OTE) to conduct a defense industrial base assessment of counterfeit electronics. NAVAIR suspected that an increasing number of counterfeit/defective electronics were infiltrating the DOD supply chain and affecting weapon system reliability.
2007 (September) - SAE G-19 Committee Charter Counterfeit Electronic Components Committee

The committee was tasked with developing a document that would standardize requirements, practices and methods related to counterfeit parts risk mitigation.

2007 (September) - The L-3 Counterfeit Parts Team was established to define and provide guidelines for managing and controlling the risks associated with counterfeit parts.

OEMs ramping up awareness and avoidance efforts

2007 (Late) - U.S. and European customs launched “Operation Infrastructure” resulting in the seizure of over 360,000 counterfeit ICs that were destined for U.S. and European markets.

Enforcement is engaged


2008


2008 (April) - AIA forms the Counterfeit Parts Integrated Project Team

AIA Counterfeit Parts IPT Plan of Action
To address the challenges of today’s supply chain environment, AIA has established a Counterfeit Parts Integrated Project Team (IPT). The AIA Counterfeit Parts IPT is working in concert with government agencies, original manufacturers, industry associations and independent distributors.

Objectives of the IPT are to:
1. Engage the U.S. government in discussions concerning acquisition and procurement policies to avoid introducing counterfeit parts and materials into aerospace, space and defense products
2. Create a set of standards for government and industry to ensure that the risk of introducing counterfeit parts and materials is minimized, is consistent with risks accepted by the customer and implementable without sacrificing the benefits of buying commercially available products
3. Engage the U.S. government in discussions concerning enforcement of policies to avoid the introduction of counterfeit products into the U.S.


Significance = National & International Media Coverage


2009


2009 (April) – SAE AS5553 Published
2009 (August) – SAE AS5553 adopted by the DOD
2009 (October 9) – Mustafa Aljaff – MVP Micro /Indictment
2009 (November) – Counterfeit electronics survey initiated by the U.S. Dept. of Commerce, the Bureau of Industry and Security (BIS), and the Office of Technology Evaluation (OTE).


2010



Counterfeit electronics report was released by the U.S. Dept. of Commerce, the Bureau of Industry and Security (BIS) and the Office of Technology Evaluation (OTE).

Purpose: The purpose of this study is to provide statistics on the extent of the infiltration of counterfeits into U.S. defense and industrial supply chains, to provide an understanding of industry and government practices that contribute to the problem, and to identify best practices and recommendations for handling and preventing counterfeit electronics.

The veil was fully lifted.

2010 (June) - The 2010 Joint Strategic Plan on Intellectual Property Enforcement submitted to the President of the United States and Congress states the U.S. Government shall: "establish a government-wide working group tasked with studying how to reduce the risk of the procurement of counterfeit parts by the U.S.Government." The Administration also called for increased criminal penalties for such offenses.
2010 (September 14) - Shannon Wren and Stephanie McCloskey (VisionTech) Press Release / Indictment
2010 (October 11) - S.3729 - National Aeronautics and Space Administration Transition Authorization Act of 2010 became public law number 111-267. Sec. 1206 of the bill addresses counterfeit parts.
2010 (December) – Supply & Demand Chain Executive Special Edition - Supply Chain RISK


2011


2011 (March 20) - AIA releases white paper titled Counterfeit Parts: Increasing Awareness and Developing Countermeasures.
2011 (March) - Senators Levin & McCain announced a Senate Armed Service Committee (SASC) investigation into counterfeit electronic parts and the risks they pose to the Department of Defense (DOD) supply chain.
2011 (April)IDEA STD-1010-B Released.
2011 (June) - Senator Whitehouse proposed his own counterfeit bill, the Combating Military Counterfeits Act of 2011, to crack down on criminals who traffic in counterfeit military goods/services.
2011 (June 14) - Federal agencies launch "Operation Chain Reaction" a new comprehensive initiative targeting counterfeit items entering the supply chains of the Department of Defense and other U.S. government agencies.
2011 (June 16) - CNN broadcast

Counterfeit parts impact 40% of Pentagon’s Supply Chain according to U.S. Commerce Dept study.
Senator Brown (OH) recommends DOD cancel supplier contracts when counterfeits are found in their supply chain.

2011 (July) - The UK Ministry of Defence formed a Counterfeit Awareness Working Group (CAWG) to assess whether or not counterfeit components had been incorporated in aircraft or military equipment manufactured in the United Kingdom.
2011 (November 29) - The Whitehouse measure was amended to the McCain / Levin Bill and then unanimously approved by the Senate. It moved to the House for discussion.
2011 (December 1) - Senate passage of the Defense Authorization Act for Fiscal Year 2012.
2011 (December 20) – SAE ARP6178 - Fraudulent/Counterfeit Electronic Parts; Tool for Risk Assessment of Distributors was published.
2011 (December 31) – Measure signed by President Obama - 2012 National Defense Authorization Act (Sec. 818) Detection and Avoidance of Counterfeit Electronic Parts.


2012


2012 (January) – SAE G-19T – AIR6273 Terms and Definitions subcommittee was formed: Terms and Definitions - Fraudulent/Counterfeit Electronic Parts
2012 (April 24)Federal agents searched the office of Epic International Electronics, Inc., a home based business owned and operated by Peter and Lisa Picone
2012 (November 7)AS6081 - Fraudulent/Counterfeit Electronic Parts: Avoidance, Detection, Mitigation, and Disposition - Distributors released by SAE Aerospace


2013


2013 (January 1) – H.R. 4310 National Defense Authorization Act for Fiscal Year 2013 signed into law (Public Law No: 112-239).

(Sec. 833) Amends the NDAA for Fiscal Year 2012 to provide an exception, in limited circumstances, to the prohibition as allowable contractor costs the cost of counterfeit and suspected counterfeit electronic parts and rework or corrective action with respect to such parts.
2013 (March) - SAE G-19-AD subcommittee formed: Fraudulent/Counterfeit Electronic Parts: Avoidance, Detection, Mitigation, and Disposition - Authorized/Franchised Distribution
2013 (May 22) – U.S. Customs and Border Protection successfully completes "Operation Core Systems" - 480 shipments of potentially harmful counterfeit electronic components seized
2013 (June 12) - United States of America v. Hao Yang (MS Technologies) – First individual to be indicted under the relatively new charge of trafficking in counterfeit military goods, a federal crime enacted as part of the National Defense Authorization Act of 2011 (Conspiracy to Traffic in Counterfeit Goods and Counterfeit Military Goods, 18 U.S.C. 2320).
2013 (August 25) - The National Institue of Standards and Technology (NIST) proposes a new cybersecurity control overlay for federal agency supply chain risk management in NIST Special Publication 800-161.
2013 (October) - DoD published its 2013 Annual Industrial Capabilities Report to Congress. Within this report, DoD describes counterfeit electronic parts as "one of the worst trends to emerge in military systems spare parts".
2013 (December 11) - Xilinx, Inc. v. Flextronics International Xilinx Inc. filed a lawsuit in a California court against Flextronics International Ltd., alleging the contract manufacturer resold chips it purchased from the semiconductor vendor at a premium to other customers. The FPGA manufacturer also charged Flextronics with dealing in "gray market and counterfeit" Xilinx products, according to the filing with the Superior Court of California, County of Santa Clara.
2013 (December 26) - H.R. 3304 National Defense Authorization Act for Fiscal Year 2014 signed into law (Public Law No: 113-66).

(Sec. 803) Directs the Secretary to implement a process for the expedited identification and replacement of obsolete electronic parts included in DOD acquisition programs.


2014


2014 (January 27) - Hao Yang (MS Technologies) pleads guilty to selling counterfeit military grade circuits (Conspiracy to Traffic in Counterfeit Goods and Counterfeit Military Goods, 18 U.S.C. 2320).
2014 (April 17) - Hao Yang sentenced to 21 months in prison for conspiring to traffic in counterfeit goods and counterfeit military goods. First individual successfully prosecuted under the relatively new charge of trafficking in counterfeit military goods, a federal crime enacted as part of the National Defense Authorization Act of 2011. (Conspiracy to Traffic in Counterfeit Goods and Counterfeit Military Goods, 18 U.S.C. 2320)
2014 (May) - National Aeronautics and Space Administration Authorization Act of 2014- SEC. 712. Detection and Avoidance of Counterfeit Electronic Parts - The House of Representatives passed new NASA counterfeit parts legislation. If passed by Congress and the President, Section 712 of the NASA Authorization Act of 2014 would require that the NASA Supplement to the FAR be revised to address the detection and avoidance of counterfeit electronic parts.
2014 (June 3)Peter Picone Pleads Guilty to Importing and Selling Counterfeit Integrated Circuits from China and Hong Kong. Picone becomes the second conviction on the relatively new charge of trafficking in counterfeit military goods, a federal crime enacted as part of the National Defense Authorization Act of 2011. Title 18 – § 2320. Trafficking in counterfeit goods or services.
2014 (July 7) - The Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics releases the Assured Microelectronics Policy report in response to Senate Report 113-85, page 179, accompanying S. 1429, the Department of Defense Appropriations Bill, 2014, SAC-D which, "provides a strategy for acquisition programs to integrate robust systems engineering, supply chain risk management (SCRM), security, counterintelligence (CI), intelligence, information assurance, software assurance, and hardware assurance (with an emphasis on microelectronics) for managing risks to system integrity and trust."
2014 (July 10) - The UK MOD releases Defence Standard 05-135 – Avoidance of Counterfeit Materiel Issue 1. This Defence Standard defines the arrangements that a supplier is required to establish to demonstrate that they are actively planning and managing the risk of counterfeit materiel in their supply chain to prevent delivery of such materiel to the MOD.
2014 (July 30) - SAE publishes AS6174A – Counterfeit Materiel; Assuring Acquisition of Authentic and Conforming Materiel.
2014 (August 20) - SAE publishes AS6496 – Fraudulent/Counterfeit Electronic Parts: Avoidance, Detection, Mitigation, and Disposition – Authorized/Franchised Distribution.
2014 (November 2) - Three co-defendants were sentenced in federal court today for their roles in a $1 million wire fraud scheme to sell counterfeit and modified computer equipment to the U.S. Army.
2014 (November 13) - The US Nuclear Regulatory Commission (NRC) officially launched its Counterfeit, Fraudulent, and Suspect Items (CFSI) public webpage. The site is intended to help all interested parties quickly locate counterfeit, fraudulent, and suspect items (CFSI) information relating to NRC regulated activities spanning a period of approximately 30 years.
2014 (December 4) - H.R.5793 - Cyber Supply Chain Management and Transparency Act of 2014 (H.R.5793 — 113th Congress (2013-2014)) is introduced to require the Office of Management and Budget (OMB) to issue guidelines for agencies that contract to acquire software, firmware, or products containing a third party or open source binary component.
2014 (December 12)Jeffrey Warga pleads guilty to one count of conspiracy to commit wire fraud. Warga and others engaged in a scheme to defraud their business customers, including a Connecticut company, by falsely representing that the electronic parts they sold were not from Asia when, in fact, the parts had been purchased from companies located in Asia; were new parts from the original manufacturer when, in fact, the parts were used; and were authentic parts when, in fact, Warga and his co-conspirators knew the parts were counterfeit parts.
2014 (December 19) – H.R. 3979 H.R. 3979 National Defense Authorization Act for Fiscal Year 2015 signed into law (Public Law 113-291).

(Sec. 817) Revises sourcing requirements related to avoiding counterfeit electronic parts.


2015


2015 (January 7) - The Defense Department’s top acquisitions official releases a new version of the acquisitions corps’ guiding document: Department of Defense Instruction 5000.02, Operation of the Defense Acquisition System, which emphasizes that acquisitions programs should be tailored to the product being acquired.
2015 (February 10) - Text of the National Aeronautics and Space Administration Authorization Act of 2015. This bill passed in the House on February 10, 2015 and goes to the Senate next for consideration. The text of the bill below is as of Feb 11, 2015 (Referred to Senate Committee). See "SEC. 711. DETECTION AND AVOIDANCE OF COUNTERFEIT ELECTRONIC PARTS."
2015 (March 19) - San Francisco Man And Company Indicted For Smuggling Sophisticated Electrical Components To Russian Federation. Russian йmigrй Pavel Semenovich Flider was arrested on charges that he and corporate co-defendant Trident International Corporation, LLC, illegally smuggled sophisticated electrical components out of the United States, and used laundered funds to promote the scheme.
2015 (April 22) - The Secretary of the Navy issues SECNAV Instruction 4855.20 to establish Department of the Navy (DON) policy to prevent the introduction of counterfeit materiel into DON systems. It applies to all phases of life cycle management, from identifying an operational requirement, introducing an item into the supply chain, system operations and maintenance, through phase out and retirement.
2015 (May 27) - Chip Supplier Pleads Diminished Capacity to Avoid Imprisonment after Selling Counterfeit Parts to the U.S. Navy and Others. Despite acknowledging his participation in the conspiracy was inexcusable and an apology, Peter Picone is now asking for a non-incarceration sentence of house arrest and probation and a downward departure based upon “Diminished Capacity” after pleading guilty to conspiracy to intentionally traffic in counterfeit military goods in violation of Title 18, United States Code, Section 2320(a)(1).
2015 (June 11) - Alexander Brazhnikov Jr. admitted his role in an international procurement network that obtained and smuggled more than $65 million worth of electronics from the United States to Russia in violation of export control laws by pleading guilty to one count of conspiracy to commit money laundering, one count of conspiracy to smuggle electronics from the United States and one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA).
2015 (July 3) - In order to support consistent interpretation of UK Defence Standard 05-135, the UK MOD Counterfeit Avoidance Working Group (CAWG) issues the Counterfeit Avoidance Maturity Model version 1.0 support document for auditors assessing compliance with the requirements of the Standard.
2015 (July 6) - In compliance with DoDI 4140.67, "DoD Counterfeit Prevention Policy" (Reference (b)) and Section 818, Public Law 112-81 of the “National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2012” (Reference (d)), DCMA develops DCMA-INST 1205 – Counterfeit Mitigation Instruction to enhance surveillance activities.
2015 (July 13) - The U.S. Nuclear Regulatory Commission (NRC) issues Regulatory Issue Summary (RIS) 2015-08, "Oversight of Counterfeit, Fraudulent, and Suspect Items in the Nuclear Industry." This RIS is intended to heighten awareness of existing NRC regulations and how they apply to the nuclear industry stakeholders' oversight of counterfeit, fraudulent, and suspect items (CFSI).
2015 (July 28) - Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JEFFREY KRANTZ, 50, of New York, N.Y., waived his right to indictment and pleaded guilty today in Hartford federal court to supplying customers with falsely remarked microprocessor chips, many of which were used in U.S. Military and commercial helicopters.
2015 (September 18) - U.S. Customs and Border Protection (CBP) published a final rule that implements procedures for sharing information about imported merchandise with trademark owners for purposes of determining whether merchandise bears a counterfeit mark.
2015 (October 6) - Peter Picone sentenced to 37 months in prison for trafficking counterfeit military goods.
2015 (October 26) - Alexander Posobilov, Shavkat Abdullaev and Anastasia Diatlova were convicted of conspiring to export, and illegally exporting, controlled microelectronics to Russia. The defendants, all of whom worked at Arc Electronics Inc. (Arc), a Houston-based corporation, and eight other individuals were originally charged in October 2012. Five members of the conspiracy, including Arc owner Alexander Fishenko, previously pleaded guilty to related charges.
2015 (November 25) - S.1356 National Defense Authorization Act for Fiscal Year 2016 signed into law (Public Law 114-92).

(Sec. 238) Requires DOD to conduct a hardware assurance study to assess the presence, scope, and effect on DOD operations of counterfeit electronic parts that have passed through the Department supply chain and into fielded systems.

(Sec. 885) Expands the eligibility for contractors to include costs for rework and corrective action related to counterfeit electronic parts as allowable costs under DOD contracts. Permits DOD to approve industry-selected trusted suppliers.
2015 (December 11) - Jeff Krantz sentenced to three years’ probation, fined $100,000 and ordered to pay $402,650.00 in restitution for supplying the U.S. military with mislabeled microchips.


2016


2016 (January 21) - Jeffrey Warga was sentenced to three years of probation and was ordered to pay a $10,000 fine for supplying customers and the US military with falsely remarked microprocessor chips.
2016 (February 12) - – U.S. President Barak Obama states he will sign into law a US Customs bill passed into the U.S. Senate that includes a provision to combat counterfeit semiconductors.
2016 (February 16) - GAO report GAO-16-236 recommends that DOD oversee its defense agencies’ reporting efforts, develop standard processes for when to report a part as suspect counterfeit, establish guidance for when to limit access tor GIDEP reports, and clarify criteria to contractors for their detection systems.
2016 (March 18) - JEDEC, an international standards body, publishes JESD243 which identifies the best commercial practices for mitigating and/or avoiding counterfeit products by all manufacturers of electronic parts.
2016 (July 14) - The United States Congress recognizes July 2016 as “National Anti-Counterfeiting Consumer Education and Awareness Month”.
2016 (July 21) - Arc Electronics Inc. founder Alexander Fishenko is sentenced to 10 years in a U.S. prison after he pleaded guilty to charges including conspiracy, acting as an unregistered agent of the Russian government and the illegal export of sophisticated microelectronics.
2016 (August 30) - DFARS 2016-D010 – Costs Related to Counterfeit Electronics Parts amends the allowability of costs for rework or corrective actions from the use of suspect counterfeit and counterfeit parts.
2016 (September 12) - SAE AS5553 Revision B and SAE ARP6328 published.
2016 (October 1)IPC publishes IPC-1782: Standard for Manufacturing and Supply Chain Traceability of Electronic Products to help establish minimum requirements for manufacturing and supply chain traceability based on perceived risk as agreed between user and supplier
2016 (October 30) - SAE AS6171 is published. This SAE Aerospace Standard (AS) standardizes inspection and test procedures, workmanship criteria, and minimum training and certification requirements to detect Suspect/Counterfeit (SC) Electrical, Electronic, and Electromechanical (EEE) parts.
2016 (December 23) - S.2943 National Defense Authorization Act for Fiscal Year 2017 signed into law (Public Law No: 114-328). (Sec. 815) Revises requirements for the detection and avoidance of counterfeit electronic parts to require contractors and DOD to meet certain requirements using "suppliers that meet anticounterfeiting requirements" rather than "trusted suppliers."


2017


2017 (January 13) - U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE) seized a record number of shipments containing goods that violated Intellectual Property Rights (IPR) in FY2016.
2017 (February 7) - The Secure E-Waste Export and Recycling Act (SEERA) was reintroduced as H.R. 917 by Representatives Republican Paul Cook and Democrat Gene Green. If passed and signed into law by President Trump, the bill will ensure electronic waste does not become a source of counterfeit electronic parts which then re-enter the supply chain.
2017 (February 28) - Alexander Posobilov, the former Procurement Director of Arc Electronics, was sentenced to 135 months' imprisonment followed by 3 years’ of supervised release after a jury trial. Posobilov was found guilty of exporting controlled microelectronics to Russia in violation of the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act (AECA) and for money laundering conspiracy.
2017 (March 7) - ZTE pleaded guilty to the violation of US trade sanctions through the illegal export of American technology to Iran and North Korea and was fined $1.19 billion.
2017 (March 21) - S.442 - National Aeronautics and Space Administration Transition Authorization Act of 2017 became public law number 115-10. Sec. 823 of the bill acknowledged and addresses the risk counterfeit electronic parts pose to astronauts, crew, other personnel and to NASA overall.
2017 (April) - The Defense Science Board, an advisory committee established to provide advice to the Secretary of Defense, releases a Report of the Defense Science Board, Task Force on Cyber Supply Chain providing a critical analysis and 25 recommendations to address cyber vulnerabilities in the DoD’s weapon systems supply chain and sustainment programs.
2017 (May 30) - The Office of Inspector General of the Department of Transportation released an audit which found that the Federal Aviation Administration’s process for monitoring and investigating suspected unapproved parts requires enhancements to recordkeeping and lacks a management control to capture and accurately report suspected unapproved parts.
2017 (June 20) - The U.S. Department of the Navy released the "Counterfeit Materiel Process Guidebook, Guidelines for Mitigating the Risk of Counterfeit Materiel in the Supply Chain" to provide a tool for implementing a risk-based counterfeit materiel prevention program.
2017 (June 26) - ERAI launches InterCEPT, a web-based counterfeit avoidance training program designed exclusively for professionals with roles in manufacturing, management, procurement, logistics, distribution, or otherwise serving or engaged with the electronics industry.
2017 (July 3) - A joint customs operation, code-named Operation Wafers, resulted in the seizure of more than one million counterfeit devices imported into Europe from China and Hong Kong.
2017 (August 3) - Peter Zuccarelli pleaded guilty to conspiring to smuggle and illegally export radiation hardened integrated circuits (RHICs) for use in the space programs of China and Russia, in violation of the International Emergency Economic Powers Act (IEEPA).
2017 (September 8) - Paul Skiscim, President of Aerospec Inc., was sentenced to 26 months in prison, ordered to pay $420,000.00 in restitution to the Defense Logistics Agency and to forfeit cash and real-estate holdings valued at approximately $500,000.00 after entering a plea of guilty to count one of an eight count indictment for fraud involving aircraft parts in interstate commerce.
2017 (September 28) - The Government Accountability Office (GAO) releases a report entitled, "Defense Supply Chain – DOD Needs Complete Information on Single Sources of Supply to Proactively Manage the Risks". The GAO examined DOD’s report per Senate Report 114-49 which instructed DOD to provide a report which, "identifies major defense acquisition programs with operational implications, a list of critical components of such major defense acquisition programs provided by single-source and/or single-provider suppliers, the severity of the operational impact of the loss of such suppliers, and risk management actions with associated implementation plans and timelines the Department will take to prevent negative operational impact in the event of such loss." The GAO report found that the DOD’s October 2016 report addressed two of four elements required by the Senate, partially addressed one element and did not address a fourth element.
2017 (October 2) - The United States Department of Defense (DoD) Defense Contract Management Agency (DCMA) released its latest update of the Contractor Purchasing System Review (CPSR) Guidebook. The CPSR Guidebook, "provides guidance and procedures to Government personnel for evaluating contractor’s purchasing systems and preparing the CPSR reports".
2017 (October 3) - Ali Caby aka "Alex Caby", Arash Caby aka "Axel Caby", and Marjan Caby pleaded guilty to conspiracy to defraud the United States and to illegally export aviation parts and equipment to Syria, in violation of the International Emergency Economic Powers Act (IEEPA).
2017 (November 30) - Prosecutors in the Northern District of California filed an indictment against four former employees of Applied Materials, Inc. for allegedly conspiring to commit theft of trade secrets and possession of stolen trade secrets, aiding and abetting. Liang Chen, Donald Olgado, Wei-Yung Hsu and Robert Ewald were accused of downloading more than 16,000 CAD drawings, bills of materials, chemical recipes, prototypes, client data, and marketing materials and plans related to high volume manufacturing of semiconductor wafers for use in LEDs in lighting and electronic applications.
2017 (December 19) - Three former employees of AW-Tronics, LLC were sentenced today for their roles in a conspiracy to defraud the United States and to illegally export aviation parts and equipment to Syria. Ali Caby aka "Axel Caby", who pleaded guilty to one count of conspiracy to violate IEEPA and defraud the United States, was sentenced to 24 months’ imprisonment, a $100.00 assessment fee, and ordered to surrender to U.S. Customs and Immigration after imprisonment for removal proceedings. Arash Caby, who also pleaded guilty to one count of conspiracy to violate the IEEPA, was sentenced to 24 months’ imprisonment, a $10,100.00 assessment and fine and 2 years’ of supervised release. Marjan Caby was sentenced to one year and one day imprisonment, a $100.00 assessment fee and 2 years’ of supervised release.


2018


2018 (January 4) - MHz Electronics, Inc., an independent distributor based in Phoenix, Arizona entered into a settlement agreement with the US government for two alleged violations of the Export Administration Regulations (EAR). The order by the US Bureau of Industry and Security states that on two occasions in 2013, MHz Electronics sold controlled pressure transducers, which are, “controlled for nuclear nonproliferation reasons and can be of significance for nuclear explosive purposes”, to entities in Taiwan and China without the required licenses. Both of these sales, totaling $1,380.00, were facilitated through eBay.
2018 (January 19) - Federal authorities arrested Yi-Chi Shih and Kiet Ahn Mai on federal charges that allege a scheme to illegally obtain technology and integrated circuits with military applications that were exported to a Chinese company without the required export license.
2018 (January 30) - The Government Accountability Office (GAO) was asked to analyze the enforcement efforts made by U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE) of counterfeit goods entering the United States with regard to the enforcement of intellectual property rights and the extent of the agencies’ collaborative efforts be-tween themselves and the private sector. The results, contained in a report entitled, "Intellectual Property – Agencies Can Improve Efforts to Address Risks Posed by Changing Counterfeits Market", were released in January of 2018.
2018 (March 3) - Trilogy International Associates, Inc. and William Michael Johnson, Trilogy’s President and General Manager, allegedly committed three violations of the EAR when they exported an explosives detector and various shipments of analog-to-digital converters through the use of a freight forwarder to Russia. The controlled products were sold between January and May of 2010 to TAIR R&D Co., Ltd, a company located in Russia, whose employee was Alexander Volkov, a former co-founder of Trilogy International along with William Johnson.
2018 (March 21) - Anni Beurklian, a/k/a Anni Ajaka (“Beurklian”), her husband, Antoine Ajaka, a/k/a Tony Ajaka ("Ajaka"), Amir Katranji, a/k/a Amir Hachem Katranji, a/k/a Amir Hachem Alkatranji, a/k/a Amir Katra ("Katranji"), and Top Tech US Inc, which operated out of the Ajaka/Beurklian residence in Waltham, were indicted on conspiracy to violate U.S. export laws and regulations, conspiracy to defraud the United States, smuggling U.S. goods out of the United States, conspiracy to obstruct justice, and obstruction of justice.
2018 (April 6) - United States Department of Veterans Affairs (VA) proposes to amend and update its VA Acquisition Regulation (VAAR) to require that contractor purchasing system reviews focus special attention on whether the contractor has implemented a counterfeit electronic part detection and avoidance system to ensure that counterfeit electronic parts do not enter the supply chain.
2018 (April 11) - Zhelyaz Andreev, a Bulgarian national and former employee of AW-Tronics in their Sofia, Bulgaria office, was detained by police in Dobrich, Bulgaria at the behest of the Miami Prosecutor’s office pursuant to an Interpol Red Notice. Andreev was indicted and an arrest warrant was issued in October of 2016 for Andreev along with 10 other employees of AW-Tronics and Syrian Arab Airlines for one count of alleged conspiracy to export items in violation of the IEEPA (International Emergency Economic Powers Act) and defraud the United States and 6 counts of attempted export of goods in violation of the Syria sanctions.
2018 (April 17) - ZTE, the Chinese smartphone manufacturer, is hit with an export ban by the US Department of Commerce. The Government alleged that Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd, collectively "ZTE", illegally shipped telecommunications equipment to Iran and North Korea in 2017 who then subsequently agreed to a combined civil and criminal penalty and forfeiture of $1.19 billion along with a seven-year suspended denial of export privileges. In April of 2018, the Department of Commerce alleged ZTE made false statements to BIS by not reprimanding ZTE staff and senior management, which Secretary of Commerce Wilbur Ross described as, "egregious behavior [that] cannot be ignored." This resulted in the immediate suspension of export privileges of ZTE for a 7-year period and made it illegal for US companies to sell components to ZTE.
2018 (April 25) - Joyce Marie Eliabachus aka Joyce Marie Gundran Manangan, principal of Edsun Equip-ments LLC, an aviation parts trading company, was charged with conspiracy to violate the Iranian Trans-actions and Sanctions Regulations (ITSR), conspiracy to commit money laundering, and conspiracy to smuggle goods from the United States.
2018 (April 25) - The U.S. Department of State concluded an administrative settlement with FLIR Systems, Inc for alleged violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). The Government alleged that FLIR exported defense articles, including technical data, without authorization, provisioned defense services without authorization, violated the terms of provisios or other limitations of license authorizations and failed to maintain specific records involving ITAR-controlled transactions. The transfer of data and provision of defense services included dual national employees of Iran, Iraq, Lebanon, and Cuba, all countries with export restrictions.
2018 (May 1) - The owner of PRB Logics Corporation, an Orange County-based seller of electronic components, was arrested on federal charges alleging he sold counterfeit integrated circuits, some of which could have been used in military applications. Rogelio Vasquez is charged in a 30-count indictment that alleges he acquired old, used and/or discarded integrated circuits from Chinese suppliers that had been repainted and remarked with counterfeit logos.
2018 (May 2) - Ericsson Inc. of Texas and Ericsson AB of Sweden, both subsidiaries of Telefonaktiebolaget LM Ericsson, entered into a settlement agreement with the Office of Foreign Assets Control (OFAC) for an alleged violation of the International Emergency Economic Powers Act (IEEPA) and the Sudanese Sanctions Regulations.
2018 (June 15) - President Trump announced the implementation of a 25% import tax against a list of over 1,000 products imported from China. Included in the list are certain capacitors, materiel for airplanes, batteries, transistors, LEDs, industrial machinery and other electrical, electronic and electromechanical components.
2018 (July 16) - Xiaolang Zhang, a former member of Apple’s autonomous car research team, was arrested at San Jose International Airport preparing to board a flight for China in July 2018 for allegedly stealing trade secrets from Apple.
2018 (July 26) - The Office of the National Counterintelligence Executive issues a report providing a warning of the industrial sectors and technologies it has determined to be of highest interest for a cybersecurity and cyberespionage attack.
2018 (August 7) - The United States Trade Representative (USTR) released the next list of an estimated $16 billion worth of items imported from China to also be subjected to a 25% tariff. This second round of Section 301 tariffs is in addition to the list released on July 6. The list contains 279 out of the original pro-posed 284 product types that were proposed on June 15. CBP began collecting the duties on these items on August 23, 2018.
2018 (August 13) - President Trump authorized the 2019 National Defense Authorization Act, or NDAA, which provides a budget of $717 billion for U.S. national defense. A few notable points relative to the electronics industry are: Section 843 Pilot program to test machine-vision technologies to determine the authenticity and security of microelectronic parts in weapons systems; Section 845 Report on defense electronics industrial base; Section 1261 United States strategy on China; Section 1653 Study and report on reserve component cyber civil support teams and Section 1765 Annual report to Congress.
2018 (August 20) - Ghobad Ghasempour, a Canadian citizen, was sentenced by the U.S. court to serve a 42-month prison term for conspiracy to export U.S. goods to Iran. Ghasempour pleaded guilty in April of 2018 to using front companies in China to export restricted products to Iran.
2018 (August 22) - The United States Attorney’s Office, Central District of California announced that Johnny Paul Tourino, owner of Spectra Equipment, Inc registered in Laguna Niguel, CA, was accused of violating the International Emergency Economic Powers Act (IEEPA), conspiracy, smuggling goods out of the United States and money laundering. Tourino allegedly purchased computer servers for an Iranian bank.
2018 (September 11) - Applied DNA Sciences announced the signing of a new contract with the Defense Logistics Agency’s (DLA) Land and Maritime’s Product Test Center (PTC). The contract extends Applied DNA’s services for an additional two years with a one-year optional extension at DLA’s discretion. The services include the supplies and services for unique DNA marks in various inks and quality assurance authentication testing and training specific to FSC 5962 microcircuits.
2018 (September 21) - The USTR released a third list of approximately $200 billion worth of Chinese imports to be subject to additional tariffs starting September 24. These imports will initially be subjected to a 10% tariff; however, the tariff will increase to 25% starting January 1, 2019. The list contains 5,745 lines.
2018 (September 25) - Ji Chaoqun, a Chinese citizen and United States Army reservist, was arrested on September 25, 2018 for violating the Foreign Agents Registration Act (FARA) by acting as an illegal agent for the Republic of China.
2018 (October 1) - Si Chen, a Chinese citizen who pleaded guilty in July on federal charges of conspiring to illegally export sensitive space communications technology to China, was sentenced to serve 46 months in a federal prison. Si Chen, also known as Cathy Chen, Celia Chen, Cecilia Chen and Chunping Ji, operated Archangel Systems Space, Inc. (ASSI) based in El Monte, California with additional addresses in Pomona, Gardenia, and Walnut, California and Shenzhen, China. Chen pleaded guilty to conspiracy to violate the IEEPA, money laundering and using a forged passport issued by the People’s Republic of China with her photo but a different name.
2018 (October 4) - Bloomberg published a report entitled "The Big Hack: How China Used a Tiny Chip to Infiltrate U.S. Companies" that described how nearly 30 American companies stored data on servers that contained chips which had allegedly been secretly inserted during the manufacturing process in China by members of the People’s Liberation Army. Among the allegedly affected companies were Apple, a large unnamed banking institution, Department of Defense contractors and Amazon, who the report states, discovered an intrusion while performing a security audit on video compression servers that had been assembled by Super Micro Computer Inc. during a build of a secure cloud for the CIA.
2018 (October 6) - The Department of Defense issues "Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States". The report describes the forces affecting the defense industrial base, identifies primary categories of risk, illustrates impact within sectors and provides recommendations for mitigation.
2018 (October 9) - US Government Accountability Office released a report in early October 2018 analyzing the state of the Department of Defense’s weapon systems cybersecurity. While the report identified mission-critical vulnerabilities, the GAO did not provide any recommendations to the DoD.
2018 (October 9) - Yanjun Xu, aka Qu Hui aka Zhang Hui, was extradited from Belgium and arrested and charged with conspiring and attempting to commit economic espionage and steal trade secrets from several US aviation companies, including GE Aviation. Xu is a Deputy Division Director with the Chinese Ministry of State Security’s (MSS) Jiangsu State Security Department, Sixth Bureau, an intelligence and security agency of the Chinese government responsible for counter-intelligence, foreign intelligence and political security. This is the first time a Chinese intelligence spy is deported to the United States for criminal charges.
2018 (October 30) - The US Justice Department brought charges against 10 Chinese individuals accused of stealing American intellectual property. Beginning in January 2010 through May 2015, the US Government alleges that the defendants hacked the network of a French company with an office in Suzhou, China as well as companies in Arizona, Oregon and Massachusetts to obtain proprietary information on a turbofan engine used in US and European commercial jets and parts for that engine. The technology was stolen for the benefit of a Chinese state-owned aerospace company who was developing a similar turbofan engine.
2018 (November 1) - US Justice Department announced a federal grand jury indictment against a state-controlled Chinese company, its Taiwanese partner company and three individuals for "conspiracy to steal, convey and possess stolen trade secrets of an American semiconductor company for the benefit of a company controlled by the PRC government." The named defendants are: United Microelectronics Cor-poration (UMC), Fujian Jinhua Integrated Circuit, Co., Ltd, Chen Zhengkun aka Stephen Chen, He Jianting aka J.T. Ho; and Wang Yungming aka Kenny Wang.
2018 (November 2) - Shuren Qin was charged in a Massachusetts federal court on June 22, 2018 with one count of conspiring to commit violations of U.S. export regulations and one count of visa fraud. From July 2015 to December 2016, Qin allegedly illegally exported hydrophones using his company, LinkOcean Technologies, to Northwestern Polytechnical University, a Chinese military research institute, in violation of US export laws by concealing from his supplier the true end-user of the parts.
2018 (November 20) - The US Department of State offers a reward of up to $3 million leading to the arrest and/or conviction of Hossein Ahmad Larijani. In 2010 Larijani was charged with illegally exporting American technology, including radio transceiver modules, to Iran. From 2007-2008 and with the help of an Iranian company, three companies in Singapore and four co-conspirators in Singapore, Larijani procured technology that was used in improvised explosive devices (IEDs) that were used against US military forces from 2008 through 2010.


2019


2019 (January 17) - Rogelio Vasquez, the owner of PRB Logics Corporation, an Orange County-based seller of electronic components, pleaded guilty to one count of trafficking in counterfeit military goods, two counts of trafficking in counterfeit goods, and one count of wire fraud.
2019 (January 28) - Huawei Technologies Co. Ltd. (Huawei), the world’s largest telecommunications equipment manufacturer, two Huawei affiliates — Huawei Device USA Inc. (Huawei USA) and Skycom Tech Co. Ltd. (Skycom) — and Huawei’s Chief Financial Officer (CFO) Wanzhou Meng (Meng) are charged by the US Government with bank fraud and conspiracy to commit bank fraud, wire fraud and conspiracy to commit wire fraud, violations of the International Emergency Economic Powers Act (IEEPA) and conspiracy to violate IEEPA, and conspiracy to commit money laundering.
2019 (April 3) - President Donald Trump signs a memorandum addressing the trafficking of counterfeit goods through online marketplaces. The order requires Homeland Security to provide recommendations on how to improve monitoring and enforcement.