ENFORCEMENT

TABLE OF CONTENTS
SECTION 1
THE GLOBAL SCALE OF INTELLECTUAL PROPERTY THEFT AND ITS UNLAWFUL EXPLOITATION
BY THIRD PARTIES POSES SERIOUS THREATS TO U.S. NATIONAL INTERESTS......................................17
A. The Economic Scope and Magnitude of Counterfeiting, Commercial Piracy, and Trade
Secret Theft: A Global Perspective...................................................................................................................19
1. Assessments of the Scale and Economic Impact of Counterfeiting and Commercial Piracy........................20
2. Assessments of the Scale and Economic Impact of Trade Secret Theft.......................................................21
B. The Complex and Sophisticated Nature of Commercial Piracy, Counterfeiting and Trade
Secret Theft in the Modern Era..........................................................................................................................21
1. Schemes Employed for the Unlawful Exploitation of Digital Content..........................................................21
2. Schemes Employed to Facilitate Illicit Trade in Counterfeit Goods.............................................................26
3. The Targeting and Theft of Trade Secrets.....................................................................................................31
C. The Theft and Unlawful Exploitation of Intellectual Property as Threats to U.S. National Interests.........32
1. Undermines Principles of Fair Trade in the Global Economy.......................................................................32
2. Threatens Consumer Health and Safety.......................................................................................................33
Example: Counterfeit Personal Care Products.......................................................................................33
Example: Counterfeit Consumer Electronics & Electrical Products........................................................34
Example: Counterfeit Pharmaceuticals...................................................................................................35
Example: Counterfeit Automotive Parts.................................................................................................37
3. Threatens the Environment...........................................................................................................................38
4. Exploits Labor...............................................................................................................................................39
5. Poses Threats to Domestic and International Security.................................................................................40
a. The Integrity of Supply Chains and Critical Infrastructures.................................................................41
b. The Convergence between Intellectual Property-Based Crime
and the Financing of Criminal and Terror Networks...........................................................................42
SECTION 2
HELPING TO PROMOTE A SAFE AND SECURE INTERNET: MINIMIZE COUNTERFEITING
AND INTELLECTUAL PROPERTY-INFRINGING ACTIVITY ONLINE.............................................................61
A. Targeting Financial Support Flowing to Criminals: A “Follow-the-Money” Approach to
Combating Online Commercial Piracy and Counterfeiting............................................................................61
1. Strengthen Payment Processor Networks’ Efforts to Curb Illicit Proceeds...................................................62
2. Strengthen Online Advertising Networks’ Efforts to Curb Flow of Illicit Revenue........................................63
3. Strengthen Foreign Banking Practices to Curb the Financing of Illicit Trade...............................................66