Dear ERAI Members and Colleagues,

One of the most difficult questions that people ask me is, “what do you do for a living”? It’s hard to answer, not because of what the job entails, but rather the length of time it takes me to answer that question. This simple question cannot garner a simple response; it usually takes me at least 5 minutes to explain the industry, the distribution of components and products and the role that ERAI plays in assisting organizations to reduce the risk they face. I find the best way is to start by gaining an understanding of how much knowledge the individual has about electronics and how they are made before I go into the nitty gritty details of counterfeits and the plethora of supply chain problems. Over the past 16 years I have managed to develop a presentation of sorts in my mind that can be adjusted relative to my audience.

Without background knowledge of this industry and how it works, describing my day to day activities is nearly impossible. Likewise, hiring new staff poses a great challenge as the learning curve is huge if the individual doesn’t have industry-specific experience. Even more frustrating is hearing from peers who are uninformed on procurement best practices, risk avoidance and the general state of affairs and happenings in the industry.

I urge each and every one of you to stay tuned – you’re already one step ahead reading this newsletter! Attend conferences (whenever possible), join online communities such as those on LinkedIn (ERAI’s group is open to all), stay up to date on events through news articles, publications and blogs and invest in training. ERAI developed the InterCEPT training program with this learning curve in mind whether it’s for a new hire or someone transitioning into a different role, ERAI is here to help fill the void. It is the duty of each person in the supply chain to be aware and educated: Knowledge is power!

As always, we welcome your input. Contact us with any questions, ideas for stories or problems facing your organization.

Anne-Liese Heinichen

MROs: Counterfeit, Corruption and Terrorism Threats

A recent Mango Airlines flight from Johannesburg to Cape Town, South Africa was recently “forced into a nosedive” prior to an emergency landing. The flight reached cruise level when the crew was notified of a trim issue on the Boeing 737-800. The crew disengaged the autopilot resulting in a nosedive until the crew managed to regain control, forcing the flight back to Johannesburg without further incident.

An investigation by the South African Civil Aviation Authority (SACCA) uncovered that the airplane had undergone maintenance prior to the September 2 incident, including the replacement of the electrical trim motor on August 5. Traceability on the defective part could not be established resulting in questions regarding the authenticity of the part, despite being serviced by SAA Technical, a full-service MRO organization of the state-owned South African Airways.

Subsequently, SAA Technical admitted to a, “’security breach’ caused by criminal enterprises who are looting ‘hundreds of millions of rands’ from the airliners, benefitting from dishing out the faulty items”.i This international crime syndicate allegedly includes senior SAA procurement executives and dates back to 2014.

In an October 10 statement, SAA stated, “categorically that the airline’s maintenance division South African Airways Technical (SAAT) did not and does not use fake parts when servicing aircraft belonging to Mango Airlines or any other airline it services…whilst any acts of criminality cannot be ruled out, it is untrue that there is a known international crime syndicate that has infiltrated SAA or SAAT that is responsible for tender manipulation and/or corruption at SAA or SAAT. There is no link, direct or indirect between the aircraft incident involving the Mango flight reported on and matters that are currently under investigation at SAAT.”ii SAA Technical conducts maintenance for South African Airlines, Mango Airlines, a number of other African airlines as well as in the Middle East and Europe. Comair, a British Airways contractor, had allegedly severed dealings with SAA Technical due to, “well-documented problems with maintenance scheduling and parts inventory”.iii

Vusi Pikoli, SAA’s legal, risk and compliance executive, stated that the National Prosecuting Authority was revisiting organized crime and corruption allegations stemming from nine audit reports dating back to as early as 2017. However, Pikoli claims that the preliminary findings do not affect SAA’s safety record.

In another recent incident, a July 17 American Airlines flight was scheduled to fly from Miami, Florida to Nassau, Bahamas. However, the flight was aborted after the pilots received an error message regarding the flight computer when powering the aircraft’s engines on the Boeing 737-800. The plane was taken out of service when it was discovered that the air data module (ADM), a system that reports the speed of the aircraft, had been tampered with. A loosely connected tube in the front nose gear had a piece of foam deliberately glued to it to stop it from functioning.

After a review of video footage, Abdul-Majeed Marouf Ahmed Alani, a veteran American Airlines mechanic, was subsequently arrested and charged with “willfully damaging, destroying, disabling, or wrecking an aircraft, and attempting to do so” according to the criminal complaint filed against him in a Florida federal court. When interviewed, Alani had admitted he accessed the ADM and inserted foam with super glue to prevent the foam from coming off. His alleged motive was that he was upset over a contract dispute between the mechanics union, TWU-IAM Association, and American Airlines which had affected him financially and sought to get overtime working on the plane.

In mid-September, news reports cited that Alani, a naturalized US citizen born in Iraq, had ties to ISIS (Islamic State) terrorist group. In court, prosecutors argued that Alani’s brother was a member of ISIS and thus, Alani posed a flight risk as he had taken a trip in March to visit his brother in Iraq. Two witnesses testified to prosecutors that Alani had told them he had a brother in ISIS but both accounts were conflicting and no further evidence was provided. In addition, a video was found to have been sent from Alani’s phone showing people being shot along with ISIS propaganda. Alani has not been charged with terrorism-related crimes. He faces up to 20 years’ imprisonment if found guilty.

While ERAI has been touting the importance of supplier selection and monitoring, it is important to also include any maintenance, repair and overhaul service companies in your counterfeit mitigation plans. As the above examples show, counterfeit mitigation standards requirements, such as those found in SAE Aerospace Standard AS5553, should be flowed to your company’s MROs as well.

i https://www.thesouthafrican.com/news/mango-airlines-emergency-landing-or-tambo-criminals/
ii https://businesstech.co.za/news/business/345710/ saa-responds-to-fake- parts-claims-and-says-faulty-plane- experienced-minor-jolt-akin- to-driving-through-a-pothole/
iii https://simpleflying.com/mango-air-corruption-nosedive/

Caveat Online Emptor

Distributors are often required to search for new sources of revenue due to market fluctuations, global trade wars and market restrictions, and the ever-changing electronics industry landscape. This may mean merging their company into a larger organization, securing authorized lines or products, or as in the case of Avnet, venturing out into the world of direct Internet sales in specialized markets.

In late September, Avnet, Inc., one of the world's leading distributors of electronic components, issued a press release announcing an alliance with the Alibaba Group. The distribution company has launched an Avnet Super Store through Alibaba’s Chinese B2B marketplace, 1688.com. Alibaba is China’s largest B2B wholesale platform with 1688.com having an estimated 150 million users per day,i providing Avnet with new customers in an expanded small and medium business market. Alibaba has long been a sourcing channel for Chinese buyers and is expanding its cross-border B2B reach by bringing foreign suppliers onto the platform.

Among the first products offered on the Avnet Super Store is the Alibaba Cloud-enabled Raspberry Pi 3 Model B/B+ computer.ii While the Internet of Things (IoT) market has had global exponential growth, China has had a boom in the IoT universe due to widespread low power wide area (LPWA) networks. Through the use of Alibaba’s cloud service platform, Chinese-based developers will be able to more quickly deliver their IoT products to market through the use of the universal platform with built-in cloud connectivity. In turn, Avnet, and other companies expanding into the Chinese market, can benefit from these emerging markets and innovative platforms.

While purchasing from suppliers, even established distributors, on Internet B2B portals, organizations still need to ensure that their corporate purchasing processes address the risks posed by online purchases. Through the use of shopping baskets and online credit card purchases, buyers are inherently accepting the supplier’s terms and conditions, so thorough review of a website’s terms/conditions of sale is critical prior to placing an order. Without the issuance and acceptance of a purchase order, buyers acknowledge acceptance of a seller’s posted terms.

ERAI received a complaint from a European organization against another European company selling product on their e-commerce website. The buyer required parts be contained in the original manufacturer’s packaging. The parts were labeled as “brand new” but no mention of the product’s packaging was listed. Several pricing discounts were offered based on quantity purchases of 1, 3, 6, 10 and 25+ pieces.

Upon receipt of the parts, the buyer notified the seller that the product was being rejected as the parts were not in the original manufacturer’s packaging. As there were no markings to identify the parts, the buyer requested traceability documents or an RMA and refund would be required.

The seller agreed to issue the RMA and refund; however, they indicated the buyer would be responsible for return shipping fees. The buyer did not agree as they felt it was not their responsibility for these fees as the product was not received in the original manufacturer’s packaging. The seller’s refund terms listed on their website state that returns are at the customer’s “expense and risk”; the buyer was required to pay for return shipping of the parts.

Caveat online emptor: Due diligence is required to protect yourself as a buyer. Buyers should never assume online ecommerce purchases will take into consideration your terms and conditions. It is up to the buyer to ensure that the product being advertised meets your customer’s needs and that you understand all of the terms and conditions being offered by the seller.

i https://news.avnet.com/press-release/avnet/avnet-expands-e-commerce-strategy-china-alibaba
ii https://news.avnet.com/press-release/avnet/avnet-expands-e-commerce-strategy-china-alibaba

A: ANYONE. Membership to ERAI is not required.

We have made the process as simple as possible by offering two ways to report parts:

1. Report a part online at: http://www.erai.com/SubmitHighRiskPart
2. Or even simpler, email your report to reportparts@erai.com

We require: 1) the part information, manufacturer, part number, date code, lot code; 2) a text description of the non-conformance or findings and; 3) digital images that support the findings.

Ideally, you can send all archived data you have and make reporting future cases routine by including a report to ERAI in your existing inspection process.

Please note that you can report parts anonymously. We will not include your company name on an alert. You do not have to report the supplier that shipped you counterfeit devices unless you choose to. The major benefit to the industry at large is knowing there is a suspect counterfeit part out there.

Chinese Efforts to Steal US Aerospace Technology Continue

Within the past few years, the US government has increased its efforts into the investigation and prosecution of Chinese attempts to steal US intellectual property and theft of military technology. A 2018 US Department of Justice report found that China was involved in 90% of cases filed with the department regarding alleged economic espionage and two-thirds of the trade secret cases from 2011 to 2018. In a July statement, Christopher Wray, FBI Director, stated they had over 1,000 open investigations involving Chinese intellectual property theft.i Wray added, “there is no country that poses a more severe counterintelligence threat to this country right now than China”.

Two cases highlight the continued need for the US government and industry to be aware of state-sponsored actors’ attempts to steal components and intellectual property as China has yet to match US manufacturers’ production.

Tao Li
Tao Li, a Chinese citizen, was sentenced on October 18 to 40 months’ imprisonment after pleading guilty to conspiracy to export military and space technology to China. Li exported radiation-hardened power amplifiers and supervisory circuits primarily used in military and aerospace applications in violation of the International Emergency Economic Powers Act (IEEPA) which prohibits the export of such material to China without a license. These electronic components are able to withstand extreme heat and radiation levels, making them highly sought after for foreign military and space programs.

Li and his conspirators used various aliases to contact US companies who were suppliers of the target parts. He unknowingly also contacted three undercover agents to whom he offered an additional 10% “risk fee” to smuggle the parts to China. Li was arrested in September 2018 at the Los Angeles Airport when traveling to Arizona to meet an undercover agent. Li pleaded guilty to the charge last April.

Pengyi Li
On August 21 Pengyi Li was arrested at the Honolulu International Airport attempting to board a flight to Hong Kong. Li was carrying a bag of export-controlled radiation-hardened microchips and advanced aerospace sensors for use in advanced military satellites and missile applications. Li’s arrest came after a two-year investigation by the Department of Homeland Security. Li was not the target of the investigation but was apparently employed as a smuggler sent to retrieve the parts from the US on flights paid for by the undercover HSI agents. Li’s indictment is sealed; however, he was released from prison on September 4 according to the Federal Bureau of Prisons’ Inmate Locator.

As the trade war continues between China and the United States, the theft of US technology by Chinese companies and state-backed organizations remains a key issue. Although companies are privately held, the Chinese government retains great influence over most major firms.ii Through it’s Made in China 2025 plan and aggressive acquisition strategies, the Chinese government is attempting to dominate the $1.5 trillion electronics industry while US companies face losses in the billions due to intellectual property theft.

i https://time.com/5633390/fbi-christopher-wray-china-counterintelligence/
ii https://www.theguardian.com/world/2019/jul/25/china-business-xi-jinping-communist-party-state-private-enterprise-huawei

ERAI Member Benefit: Data Connect

If your organization is an ERAI Member, you can benefit from receiving data via ERAI’s “Data Connect” subscription service. The ERAI High Risk and Suspect Counterfeit Parts Database and Reported Companies Database can be customized to make it accessible to an ERAI Member’s internal operating system or software and is provided via FTP direct upload or an e-mail feed.

FTP Direct Upload Option

ERAI High Risk and Suspect Counterfeit Parts: This service is for users that do not want to use the one-per request query routine on the ERAI website and want to establish more comprehensive cross-checking within their system. In this option, ERAI will upload an up-to-date parts list that includes all of the parts in the ERAI High Risk and Suspect Counterfeit Parts Database on a daily basis to an FTP address specified by the client. The database file includes the part numbers, manufacturer information, lot codes and date codes of the reported parts, and the date the part was reported. It also identifies the status of the part (Suspect Counterfeit or Nonconforming or Suspect Counterfeit/Nonconforming) and a link to the detailed profile of the reported part inside the www.erai.com website including images, reports and descriptions of non-conformance.

ERAI Reported Companies Data: In this option, ERAI will upload an up-to-date list of all companies that have at least one ERAI Alert issued against them on a daily basis to an FTP address specified by the client. The database file includes the company name, company aliases (aka), headquarters city and country, indicates if a company has multiple locations, and cage code and provides a direct link to the detailed profile of the reported company inside the ERAI website.

E-mail Option

ERAI High Risk and Suspect Counterfeit Parts: ERAI will provide a master list of part numbers in the ERAI High Risk and Suspect Counterfeit Parts Database. Then, on a daily basis, ERAI will e-mail updates that include only parts reported that day by ERAI.

ERAI Reported Companies Data: An initial email will contain a master list of all the companies reported by ERAI. From then on, an update is sent on a daily basis containing the following fields: Company Name, Alternate Company Names, Headquarters City, Headquarters Country, Multiple Locations (Y/N), Cage Code, Is Reported (Y/N), and a link to their profile in the ERAI website.


The annual subscription for “ERAI Data Connect” can be waived if your company meets certain eligibility requirements and agrees to become an “ERAI Data Share” Subscriber. For further details on fees and becoming a Data Share Subscriber, please contact Richard Smith at rsmith@erai.com or at +239-261-6268.


On July 30, Senator Mike Crapo and Senator Mark Warner introduced the Manufacturing, Investment, and Controls Review for Computer Hardware, Intellectual Property and Supply Act, or MICROCHIPS Act, in the US Senate. The goal of the act is to protect the national infrastructure from threats from countries like China through the development of a national strategy and creation of a centralized clearinghouse to “assess and prevent risks to critical technologies”. The National Supply Chain Intelligence Center would be responsible for the identification of and reporting on potential threats and would allocate funding through the Defense Production Act.

Through a press release, Senator Crapo outlined the lack of a coordinated strategy to address supply chain exploitation and comprehensive detection and the serious implications posed by compromised technology. The bill would guard against threats posed by China and Russia to violate national security and penetrate federal supply chains. The legislation also addresses emerging technologies, such as 5G, which have placed China at an unfair advantage and names Chinese telecommunication technology exports as threats to consumers and the military.

The senator further cited China’s attempts to exploit the national chain of supply, cyber-physical attacks on military and infrastructure systems, cybersecurity and the use of human actors to gain sensitive, proprietary data and information as risks to human life and the military’s effectiveness. Accordingly, the bill, S. 2316, addresses the four main points by summarizing key Congressional findings on supply chain security, instructs the Director of National Intelligence and key agencies to create a plan to strengthen supply chain intelligence; establish a national supply chain intelligence center, and invest in supply chain security under Section 303 of the Defense Production Act of 1950.

“Actions by the People’s Republic of China have contributed to an unfair and unsafe advantage in its technological race against the United States,” said Senator Crapo. “Through government investments and subsidies, as well as intellectual property theft of companies like Idaho’s Micron, China aims to dominate a $1.5 trillion electronics industry, which creates serious, far-reaching threats to the supply chains that support the U.S. government and military. The MICROCHIPS Act would create a coordinated whole-of-government approach to identify and prevent these efforts and others aimed at undermining or interrupting the timely and secure provision of dual-use technologies vital to our national security.” i

Senator Warner added, "as a result, U.S. companies lose billions of dollars to intellectual property theft every year, and counterfeit and compromised electronics in U.S. military, government and critical civilian platforms give China potential backdoors to compromise these systems".

Read the MICROCHIPS Act:
https://www.crapo.senate.gov/imo/media/doc/MICROCHIPS - Bill Text - 2019.pdf

i https://www.crapo.senate.gov/media/newsreleases/crapo- warner- legislation- would- secure- us- supply- chains- against- foreign- exploitation-

Criminal Arrests and Convictions

Jianhua Li

Jianhua “Jeff” Li was sentenced on July 30, 2019 for his participation in a scheme to traffic and smuggle counterfeit Apple products from China. Li, while in the US on a student visa, smuggled an estimated 40,000 counterfeit iPads and iPhones and packaging, netting an estimated $1.1 million in sales proceeds into Li’s overseas accounts. Monies were first sent to accounts in Florida and New Jersey with a portion then sent to conspirators in Italy to disguise the source of the funds.

Li was the Sales Manager at Dream Digitals Technology (HK) Co, Ltd, a company who manufactures tablets, cellular phones and portable digital music players allegedly bearing counterfeit Apple trademarks. Li would ship product to the US via the help of 3 co-conspirators: Andreina Becerra, Roberto Volpe and Rosario LaMarca. Becerra, President of VAS Export Corporation in Miami, FL, and her husband, Volpe, imported approximately 40,000 electronic devices for which Becerra, Volpe and VAS received over $1.1 million. LaMarca, as president of RLN Incorporated in New Jersey, also received thousands of counterfeit Apple and Sony devices from Li and resold them to unsuspecting US customers. To avoid detection by CBP, the devices and fake labels were shipped separately and were then assembled and subsequently sold to customers.

Becerra, Volpe and LaMarca have pleaded guilty: Becerra was sentenced to 3 years’ probation; Volpe was sentenced to 22 months’ imprisonment; and LaMarca to 37 months’ imprisonment.

Li was sentenced to 37 months' imprisonment. As of the date of this article, Li, under register number 69151-112, was not listed as a federal inmate in the Federal Bureau of Prisons' website.

Further Reading:

Mehdi Hashemi

On August 20, 2019, US authorities arrested Mehdi “Eddie” Hashemi for his alleged participation in a conspiracy to illegally export computer numerical control (CNC) machines to Iran in violation of the International Emergency Economic Powers Act (IEEPA) and Iranian sanctions.

Hashemi bought CNC machines from US and Canadian suppliers and shipped the machines to the United Arab Emirates using fake invoices and packing lists. The machines were then forwarded to Iran from the UAE and were allegedly purchased on behalf of an unnamed textile, medical and automotive components manufacturer. Hashemi is also charged with lying to federal authorities when questioned in 2018 regarding his illegal activities, intention to send the parts to Iran and knowledge of export violations.

Feroz Khan, of the United Arab Emirates, was charged in the indictment for helping Hashemi forward the CNC Machines from the UAE to Iran and is a fugitive.

Hashemi, a dual citizen of the US and Iran, faces a maximum sentence of 320 years’ imprisonment if convicted of all charges.

Further Reading:

Saad Ahmed

On September 5, 2019, Saad Ahmed, owner of PhonePartsUSA.com LLC, pleaded guilty to a federal charge of conspiracy to traffic in counterfeit goods. 

Ahmed admitted to trafficking approximately $1.5 million of counterfeit cellular phone parts that bore fraudulent Samsung, Apple and UL trademarks. The vast majority of parts were purchased from overseas suppliers based principally in China. Ahmed's conspirators were named as "Alfie Wu", "Linda Jin" and "Helen Hao".

Ahmed additionally "grossly undervalued his international imports to deflect US. Customs' attention from his shipments." To avoid detection by CBP, the shipments containing counterfeit materials were separated from other shipments, counterfeit trademarks were obscured by protective stickers, and addresses and names to which counterfeit product was sent were manipulated in order to deflect detection.

Ahmed has agreed to pay $269,681 in restitution to the trademark holders and forfeit 4,453 cell phone parts and accessories seized in June 2018 by Homeland Security Investigations. His sentencing is scheduled for December 9, 2019. If convicted, Ahmed faces a maximum of 10 years imprisonment and a fine of up to $2,000,000.

Further Reading:

Negar Ghodskani

On September 24, 2019, Negar Ghodskani was sentenced to 27 months' imprisonment for her participation in a conspiracy to illegally export controlled technology from the United States to Iran through a Malaysian company, Green Wave Telecommunication, which acted as a front company for Fanavar Moj Khavar (Fana Moj), a company that supplies microwave radio systems and wireless broadband access to the Islamic Republic of Iran Broadcasting (IRIB). Both the IRIB and Fana Moj have been placed on the Specially Designated National list for their alleged support of international terrorism.

From 2008 through 2011, the government alleges that Ghodskani falsely represented herself as an employee of Green Wave to purchase restricted digital communications equipment which was subsequently diverted to Iran. Ghodskani and other co-conspirators concealed the destination and end-user of the controlled product through illegal financial transactions and misstatements.

Ghodskani was indicted by the US government in 2015 and arrested in Australia in 2017.

Ghodskani, who pleaded guilty to conspiracy to defraud the United States, was sentenced to time served and was subsequently deported back to Iran. Co-conspirator, Alireza Jalali, was sentenced in March 2018 to 15 months' imprisonment for his role as the former head of purchasing for Green Wave.

Green Wave has also been placed on the Specially Designated Nationals List.

Further Reading:

Artur Pupko

On September 25, 2019, Artur Pupko, a/k/a Arthur Pupko, pleaded guilty in a US federal court to three charges of trafficking in counterfeit goods.

The government alleges that Pupko, in collaboration with 9 other defendants, conspired in a scheme to sell counterfeit mobile phones and accessories that were misrepresented as genuine Apple and Samsung products in popular online platforms. Pupko imported the counterfeit product from Hong Kong and China through six companies based in Idaho: AlphaCell LLC, AnchorCell LLC, Cell2U4Less LLC, CellLife LLC, Cellularity LLC and Purecell LLC. The items were sold on Amazon and eBay to the general public and on various occasions to law enforcement. It is estimated that between $9.5 million and $35 million worth of counterfeit product was sold by Pupko from 2014 through 2018. The government alleges that various automobiles, jewelry, properties in Idaho, including a church and real estate in Brazil, were purchased with the proceeds.

Pupko’s co-defendants are: Pavel Babichenko, Gennady Babitchenko, Piotr Babichenko, Timofey Babichenko, Kristina Babichenko, Natalya Babichenko, David Bibikov, Anna Iyerusalimets and Mihail Iyerusalimets. Named entities include: Babichenko LLC, Midstar Distributor LLC, Midstar LLC, Midway Distributors Inc, Midway Distributor LLC, Midway Cellular LLC, Pacific Cellular Distributor LLC, Power Moxie LLC, Sahara Case LLC, Blue Ocean Distribution LLC, Mobi LLC, Mobi Recycle LLC, Mobile Recycle LLC, Mobi Recycling, Sahara Case LLC, Ariginall LLC, Global Distributing LLC, Global Distributors LLC, Wholesale Gadgets LLC, Wholesale Cell Phones LLC, Babichenko Dental Lab Inc, Babichenko & Sons LLC, European Denture Center, Morning Star Christian Church Inc, Russian Christian Church, Morning Star Mission Inc, Cell Phone Geeks LLC, Wireless Closeouts LLC, Droid Masterz LLC, Mountain Wireless Distributing LLC, Peg-A-Phone LLC, Western Trade LLC, Cell Zone LLC, Electro Metro LLC, Mobile Rack LLC, Mountain Wireless Distributing LLC, Simplified Selling LLC, Vast Trace LLC, Bibbs Electronics LLC, Case & More LLC, CellTalk LLC, Cell Function LLC, Speedy Wireless LLC and Tech4RLess LLC.

These other co-defendants have pleaded not guilty and were scheduled for trial in October 2020. The co-defendants face up to 20 years’ imprisonment and a $250,000 fine for money laundering, wire fraud and mail fraud and up to 10 years’ imprisonment and a $5 million fine for counterfeit trafficking. One co-defendant who is out on release, Paul Babichenko, has filed a permit in Boise, Idaho to sell mobile phones and accessories.

Pupko has agreed to pay restitution of $9.5 million to Apple and Samsung. Pupko faces a maximum of 10 years’ imprisonment and a $5 million dollar fine. A sentencing date is scheduled for December 17, 2019.

Further Reading:

Ban Amendment Becomes Law

On September 6, 2019, Croatia became the 97th country to ratify the 1995 Basel Ban Amendment. The amendment has now become an international law which prohibits the export of hazardous waste, including e-waste, from member states of the European Union, Organization for Economic Cooperation and Development (OECD), and Liechtenstein to non-OECD countries. Meaning, the 29 member countries can no longer export e-waste for recycling to Asia and Africa as of December 5, 2019, when the amendment becomes a new article in the Basel Convention.

The Ban Amendment was designed to limit the movement of hazardous waste from developed to developing countries. After trade disasters in the 70’s and 80’s, the United Nations community created the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal in 1989. The aim was to combat unrestricted hazardous waste trade and requires that all countries first obtain consent from a recipient country before exporting hazardous waste.

E-waste dumping drives the counterfeit electronics components industry, kills small businesses, threatens national security and funds criminal organizations, all of which are taking an enormous toll on the global economy and human safety. Despite the federal government’s awareness of these risks, the United States has not ratified the Basel Convention, nor have Canada, Japan, Australia, New Zealand, South Korea, Russia, India, Brazil or Mexico. The US, who has opposed the Ban Amendment, is the highest waste per-capital producer with an estimated 40% of e-waste being exported to Asian and African countries.i

"There can be no excuse for using the developing world as a convenient dumping ground for hazardous wastes, under the guise of recycling," stated Jim Puckett, Basel Action Network (BAN) director. "Once the Basel Ban enters into force, the crime of waste trade should be abundantly clear to those countries and industries now horribly complicit with this e-waste tragedy."

For more information on the Basel Convention and the Amendment:

To learn more about e-waste and the electronics industry, visit ERAI’s E-Waste Knowledge Center:

i https://www.recyclingproductnews.com/article/31807/global- ban- on- exporting- hazardous- waste- to- developing- countries- close- to- becoming- law

New InterCEPT Certification Programs

InterCEPT has developed two new certification programs designed for individual students in the electronics industry who want to take an extra step to further their counterfeit mitigation knowledge. Counterfeit techniques and, accordingly, detection methods and avoidance best practices are constantly changing and evolving. InterCEPT Certification programs are designed to verify an individual’s technical knowledge and skills and provide recognition to the individual’s commitment to quality.

What InterCEPT certification means for you...

Provides proof of your skills and knowledge to an employer or potential employer
Affirms your competency and dedication to stay informed about the mitigation of counterfeit parts
Increased employer confidence and commitment to quality

What InterCEPT certification means for your company...

With millions of dollars lost per year due to counterfeits, the continuous growth of counterfeit parts entering the market has a tremendous effect on all organizations in the chain of supply. Many employers, customers and certification standards now include personnel training requirements. Conventional training and off-site educational opportunities place increasing time, budget and travel constraints on you and your personnel.

InterCEPT provides your organization with:
  • Training solutions to meet customer, standards and federal requirements
  • Proficient employees versed in counterfeit mitigation
  • Increased customer, organizational and employee confidence to quality products and services
  • Flexible online classes with administrative tools to easily monitor training patterns

The Certification Process:

Each program has individual requirements. However, all programs will require that a student take a specified set of InterCEPT classes. Once you have completed the classes and have met the eligibility criteria, an application for certification can be submitted to InterCEPT along with any other required documentation. Your application will be reviewed to confirm your documented skills to ensure the credibility of InterCEPT’s certification program. Upon approval, you will receive your training certificate. Please remember that certification is valid for 5 years after which you will need to apply for recertification.

The Certification Programs:

InterCEPT Visual Inspector 1

An individual who completes the InterCEPT Counterfeit Inspection and Testing of Electronic Parts Certification is a person qualified to inspect and record the results of a counterfeit detection inspection on an electrical, electronic or electromechanical part. The certified inspector will have an understanding of the knowledge and skills necessary to perform a visual inspection, knowledge of the tests used to detect counterfeit electronic parts and knowledge of best practices used in the mitigation of counterfeit electronic parts.

An InterCEPT Certified Inspector 1 (Visual Inspection) has demonstrated the knowledge covered in the following InterCEPT classes:
CF-02: Understanding the Global Electronics Supply Chain and How Counterfeits Enter the Supply Chain
CP-01: Developing and Implementing a Documented Counterfeit Mitigation Program
TM-01: Counterfeit Inspection and Testing of Electronic Parts: Test Methods Overview
TM-02: Counterfeit Inspection and Testing of Electronic Parts: Visual Inspection and Criteria for Acceptance or Rejection

InterCEPT Certified Program Manager

A program manager is responsible for ensuring that products are manufactured in an organized manner to ensure that all customer requirements are met. In the electronics industry, a project cannot be successful without a pro-gram manager with the knowledge and experience necessary to avoid the risk posed by counterfeit parts. An individual who completes the InterCEPT Program Manager Certification for Counterfeit Electronic Parts is a person who understands the history, impact and solutions for mitigating counterfeit electronic parts.

The required courses include an understanding of how counterfeit parts enter the supply chain, developing a counterfeit mitigation program, an overview of the various industry standards developed to combat counterfeit electronic parts and an overview of the various counterfeit detection test methods for counterfeit electronic parts. These topics are all necessary to ensure that the customer requirements for the mitigation of counterfeit electronic parts are appropriately communicated to employees and flowed down throughout the supply chain.

An InterCEPT Certified Program Manager has demonstrated the knowledge covered in the following InterCEPT classes:
CP-01: Developing and Implementing a Documented Counterfeit Mitigation Program
TM-01: Counterfeit Inspection and Testing of Electronic Parts: Test Methods Overview
CF-02: Understanding the Global Electronics Supply Chain and How Counterfeits Enter the Supply Chain
ST-01: Industry Response to Counterfeits: An Overview of the Industry Standards

Coming November 2019

InterCEPT Visual Inspector 2

An InterCEPT Certified Inspector 2 (Visual Inspection, Surface analysis, X-Ray, Decapsulation and XRF) will complete all requirements for an Inspector 1 in addition to the following:
TM-03: Counterfeit Inspection and Testing of Electronic Parts: XRF, Decapsulation, Radiography and Criteria for Acceptance or Rejection; and
TM-04: Counterfeit Inspection and Testing of Electronic Parts: Surface Testing and Criteria for Acceptance or Rejection.

Please visit www.counterfeittraining.com to sign up or email interceptinfo@counterfeittraining.com for additional information.

White Paper Reviews

Submission of the Semiconductor Industry Association on Request for Public Comments on Report on the State of Counterfeit and Pirated Goods Trafficking and Recommendations

Why you should read it: The report outlines the importance that the semiconductor industry plays in the US economy and the criticality of counterfeit part avoidance. SIA believes that while GIDEP data has “dramatically declined” in recent years, the data is not reflective of the scale of counterfeits within government supply chains. Six recommendations are provided to combat the significant risks posed by counterfeit semiconductors on the health, safety and security of people worldwide.

ERAI Insight: On July 26, 2019, the Semiconductor Industry Association (SIA) submitted comments in response to the Government’s Request for Public Comments on Report on the State of Counterfeit and Pirated Goods Trafficking and Recommendations (84 FR 32861). The Department of Commerce sought comments from stakeholders on the state of counterfeit trafficking specifically with regard to online third-party marketplaces and requested recommendations for curbing the activity.

The SIA’s response discusses how counterfeits have been uncovered in US federal defense procurements and how CBP should increase border seizures and should not tie in recognition to the monetary value of the seized product as counterfeit semiconductors may “pose more significant risks than most other counterfeit products”.

SIA provides six recommendations for CBP:
  • Establish a centralized data system to collect information on all seizures from all ports.
  • Clarify and make public if current seizure data includes assembled goods with counterfeit components installed within them.
  • Increase referrals of suspect “blank” semiconductors that are imported without trademarks or logos to Homeland Security Investigations.
  • Strengthen federal procurement practices so federal agencies purchase from the original manufacturers or authorized dealers.
  • Ensure DLA is verifying that all suppliers on DLA’s “Qualified Suppliers List of Distributors” have not previously sold counterfeit parts and ensuring no suppliers that have trafficked in counterfeit goods are added to the list.
  • Once USMCA is fully ratified, the US government should urge Mexico and Canada to grant ex officio authority to allow them to stop suspect counterfeit goods.
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A Blockchain-Based Framework for Supply Chain Provenance

Why you should read it: Given the complexity of attempting to establish the provenance of electronic components, this report outlines a blockchain-based framework to track and trace chips throughout their circulation in the supply chain of electronics using Hyperledger.

ERAI Insight: Despite the US government’s recognition of the threats faced by federal supply chains, a viable solution to determine the traceability of electronic components has yet to be found. This paper proposes the use of blockchain technology to enable traceability of parts throughout the supply chain by using smart contracts to enable verification. This computer protocol would allow “credible transactions without third parties” which would be trackable and irreversible. Each chip would have a unique device ID programmed into the device using one-time programmable memory (commonly known as electronic chip ID or ECID). The origin, path of travel and bill of materials could then be tracked and verified through a query to the blockchain. To confirm ownership, the system would require a transfer transaction from the sender and a confirming transaction from the receiver before the ownership transfer would be completed to avoid human errors or theft.

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December 2-5, 2019
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