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The global market for all counterfeit items is booming, with the value of goods seized by U.S. Customs and Border Protection in fiscal year 2014 exceeding $1.2 billion. Moreover, the U.S. Department of Homeland Security reported that the number and value of seizures of counterfeit automotive parts increased by 83 percent and 66 percent, respectively, over the previous year. In addition, counterfeiters have become extremely sophisticated and the risk of counterfeiting extends to electronic parts,…
The U.S. Department of Defense (DOD) published, on May 6, 2014, its first set of final regulations imposing specific obligations on defense contractors and their suppliers for the detection and avoidance of counterfeit electronic parts. Those new rules represent an improvement over DOD’s initial proposal, but still expose contractors and their suppliers to substantial risks, especially when it comes to dealing with “obsolete” (i.e., out-of-production) parts that are no longer available through the preferred channels of the…
On April 14, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) issued its long-anticipated ruling in the industry challenge to the Securities and Exchange Commission’s (SEC) conflict minerals rules, and – as we forecast in a previous blog post – free speech issues proved to be critical to the Court’s decision. In fact, the First Amendment challenge to the rules’ requirement that companies self-identify as “not conflict-free” was…
Shortly after the Securities and Exchange Commission (“SEC”) adopted its conflict minerals disclosure rule in August 2012, a coalition of business interests filed suit to challenge the SEC’s rule as unduly burdensome. That legal challenge to the conflict minerals rule entered its latest stage on Tuesday, January 7, 2014, when three judges of the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) heard oral argument and sharply questioned the SEC about…
The U.S. Department of Defense (DOD) recently published its first set of proposed regulations that would impose specific anti-counterfeiting obligations on defense contractors. These proposed regulations represent a partial implementation of Section 818 of the fiscal year (FY) 2012 National Defense Authorization Act (NDAA), which directed DOD to issue regulations making certain “covered” defense contractors responsible for detecting and avoiding the use or inclusion of counterfeit electronic parts in the products they supply to DOD. These…
The SEC’s conflict minerals reporting rules became effective January 1, 2013, and those rules impose burdens on companies throughout the automotive supply chain, given how prevalent the so-called “conflict minerals” are in automotive applications. We covered the SEC’s conflict minerals rules in detail in a Legal News Alert we prepared in August 2012, when the SEC’s final rules were adopted. Now that those rules have become effective, and companies are confronting the challenges posed by the…