Focus on Customs Laboratories © Japan Customs Available Resources, Assistance and Networking Possibilities

FOCUS WCO news N° 77 June 2015

Focus on Customs laboratories © Japan Customs Available resources, assistance and networking possibilities

WHILE MANY TRADED goods can be correctly wheat flour from a modified starch for These analyses are performed by labo- identified and classified by simple visual industrial use. Equally, the classification ratories. They can be Customs laborato- inspection or documentation review, some of a ceramic mug depends on whether it ries, which may be public or private but require chemical or scientific testing to is made of stoneware or earthenware, and are specifically under the direction of a ascertain their identity and enable their the classification of a textile product made Customs administration, national labo- correct classification. Products as diverse of a mixture of cotton and synthetic fibres ratories which fall under the jurisdiction as acetaminophen (a pharmaceutical pro- depends on the predominance of one of of another government agency, or private duct), saccharin (an artificial sweetener), the fibres. laboratories which undertake work on ascorbic acid (a vitamin), piperonal (a drug behalf of Customs. precursor) or potassium cyanide (a potent Processing chemical and scientific analyses poison), for example, cannot be differen- is not essential only for the correct classi- Customs laboratories differ from other tiated without being analysed. fication of products in the Harmonized laboratories in that they have to analyse all System (HS), it is also critical to the fight types of products mainly for the purposes This applies not only to classic chemical against dangerous substances, for ins- of Customs classification, with staff skil- products. Without chemical testing, it is tance, chemical weapons, ozone depleting led in two disciplines: chemical analysis impossible to distinguish powdered baby substances, pesticides, persistent organic and Customs regulation. As well as solid formula from a milk protein concentrate, products, and drug precursors, etc. training in analytical methods, industrial natural honey from a substitute made processes of manufacturing, and che- with glucose syrup and colourants, or mistry in general, the staff must have an

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The WCO has drawn up practical

in-depth knowledge recommendations, as the classification research on a “metal detector” that res- of Customs pro- well as a comprehensive of certain products ponds only to iron (the material used in cedures and regu- for the purposes of firearms) and a “detection radar” that lations pertaining technical assistance and their national tariff detects drugs hidden inside the hollowed- to, for example, training programme, to nomenclature. The out cavities in stone or wooden objects. the classification of WCO Secretariat goods, the applica- assist its Members in also uses the exper- There is no such thing as a typical Customs tion of excise duties improving the efficiency tise of laboratories laboratory. Some have a long history, such and the processing when tasked with as the Austrian Customs Laboratory in of export refunds of their Customs the classification Vienna established in 1848, while others among others. laboratories and in of certain goods have only recently been set up. No labora- for purposes of the tory is exactly the same as the next. They Most Customs admi- implementing such a HS nomenclature. may differ in terms of staff numbers, remit, nistrations have their facility or assessing its The work of labo- tasks, range of available equipment, accre- own Customs labora- ratories, however, dited analytical methods, and particular tories. The use of pri- implementation feasibility goes on behind the specialities offered. vate laboratories and and practicality. scenes on a daily State-owned labora- basis, as one of the Guidance and resources tories is exceptional. unseen faces of Taking the above factors into account, the In such cases, ensu- Customs and bor- WCO has drawn up practical recommen- ring good communi- der management. dations, as well as a comprehensive tech- cation and coordination between Customs nical assistance and training programme, and the laboratories is crucial in terms of Traditionally, Customs laboratories per- to assist its Members in improving the the relevance of test results. form chemical analyses to determine the efficiency of their Customs laboratories tariff classification of goods referenced and in implementing such a facility or Indeed, although basic analysis would not in the Customs nomenclature, which is assessing its implementation feasibility pose issues to the staff of private laborato- crucial for applying the correct duties, and practicality. ries, some complex analyses may require particularly in agricultural and industrial a specific knowledge of Customs mat- trade, as well as for matters relating to anti- The Organization notably developed a ters. The same problem may arise when dumping procedures and export refunds. Customs Laboratory Guide as a practi- working with a national laboratory fal- Customs laboratories may also provide cal handbook for the establishment or ling under the control of another public advice on Binding Tariff Information improvement of Customs laboratories in agency. Some private laboratories include (BTI) requests. developing countries. It includes “best units specialized in carrying out analyses practices” covering a variety of issues and for Customs purposes – Danish Customs, Customs laboratories are also beco- operations: from the organizational struc- for example, has used the services of such ming more and more involved in export ture, staff categories, design, space utiliza- a laboratory since 1908 (see article on control, in environmental protection tion, equipment and information systems, page 38). (e.g., controlling the trade in ozone deple- to safety and pollution measures, sample ting substances and hazardous waste), preparation methods, recommended ana- Another benefit for Customs adminis- in endangered species protection, and in lytical methods, and operation and results trations in establishing their own labora- controlling dangerous goods (e.g., pesti- reporting procedures. tories is that, as they fall directly under cides, persistent organic pollutants and the administration’s authority, Customs chemical weapons, and narcotics and drug Several databases, some managed by the has a direct say on issues relating to staff precursors). WCO and some managed by other insti- management, training and equipment, and tutions, are specifically designed for the can ensure optimal use of the laboratory. Some laboratories, such as the one in purpose of facilitating the classification The drawback is that the costs associated Japan, also provide advice on the per- of products. These databases may also with the running and maintenance of a formance assessment of various inspec- be helpful in the day-to-day routine of a Customs laboratory may be high, as it is tion equipment, along with methods for Customs laboratory: important that they are well-resourced and their practical use, and are collaborating fully equipped for optimum results. with private firms to tap into new fields • The WCO’s HS database and the data- of research, including the development of base of classification advice offer the Role of Customs laboratories contraband detection equipment. possibility of searching by keyword Customs laboratories are an essential ins- or by using an HS code to retrieve trument for Customs authorities, which For example, the Japan Customs Central information. rely on their expertise when faced with Laboratory is currently conducting

30 WCO news N° 77 June 2015 © Japan Customs

• The INN Table, an Excel spreadsheet Another interesting resource for Customs form of expert assessment missions and that contains the HS classification of and tax authorities is the sampling manual workshops. international non-proprietary names developed by the Sampling Working agreed by the WCO HS Committee Group of the European Commission (EC) To deliver assistance, the WCO has so far (HSC). to ensure the quality of samples received benefitted from the experience of Customs for analysis at laboratories. chemists from Germany, Japan, Mexico, • The European Union (EU) Inter the Netherlands and Spain, who have Laboratory Inventory of Analytical Also, the WCO launched the WCO/ kindly been made available by their res- Determination (ILIADe) is a shared Japan Regional Customs Laboratories pective Customs administrations. Funding directory of analytical methods that Programme (RCLP) in 2013, under the has been provided by German Customs, laboratories are required to use for sponsorship of Japan Customs. It pro- Japan Customs, the EC’s Taxation and Customs purposes, as well as for authen- vides an opportunity for chemists or Customs Union Directorate-General ticity and quality controls, consumer analysts working, or planning to work, (DG TAXUD), the Swedish International health protection and environmental at a Customs laboratory in a developing Development Cooperation Agency controls. country to update their skills in chemical (SIDA), and the Norwegian Agency for analysis for HS classification purposes and Development Cooperation (NORAD). • The European Chemical Inventory of to improve their knowledge of the HS. Chemical Substances (ECICS) which Prior to the implementation of any assis- lists chemical names along with their Under the RCLP, participants spend the tance activity, the WCO Secretariat invites tariff classification in the European first week of the programme at WCO the future beneficiaries to express precisely Community’s Combined Nomenclature Headquarters and then about seven weeks the nature of the assistance requested and (CN). As the CN codes are based on the at the WCO Regional Customs Laboratory the objective sought, including a descrip- WCO HS, ECICS tariff classifications (RCL) in Japan where they are exposed to tion of the status quo and plans for the are helpful throughout the world. the latest technologies and techniques. Customs laboratory, its possible use, the volume of trade of target commodities, • The Binding Tariff Information data- WCO technical assistance and the training required. This enables the base (EBTI-database) which contains Based on the WCO Customs Laboratory content of the assistance to be customized classification decisions issued by EU Guide, the WCO Secretariat provides tech- accordingly. Member States. It also provides details nical assistance for the implementation or of the composition of goods (excluding modernization of Customs laboratories, Most WCO training starts with presen- any confidential information), and jus- as well as specific training for labora- tations aimed at broadening laboratory tifications for classifications. tory staff. Assistance generally takes the workers’ knowledge of the HS Convention

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Most WCO training starts and its related tools, as well as the classifi- Training was also conducted on specific cation of chemicals in Sections V to VII of issues identified by Serbia relating to alco- with presentations aimed the HS. Moreover, analytic methodology, hol, textured/non-textured vegetable fat/ at broadening laboratory methods validation, quality assurance and oil and mineral products. modernization potential are usually dis- workers’ knowledge of cussed extensively with participants. WCO experts assisted Albanian Customs the HS Convention and laboratory staff in analysing certain types The content of the WCO Customs of goods with which the administration its related tools, as well Laboratory Guide and existing useful was facing difficulties, such as energy as the classification of resources, such as the databases and web- drinks, solvents, additives, textiles and sites mentioned above, are presented and shoes. In addition, at Albania’s request, chemicals in Sections V discussed too. Last but not least, some ana- information and examples of the classi- to VII of the HS. Moreover, lytical determinations of special interest fication of mineral oil were provided, as for the country concerned are conducted well as basic knowledge on the taxation analytic methodology, in the laboratory under the supervision of of mineral oils in the EU and common methods validation, WCO experts. variants of mineral oil tax evasion. quality assurance and The Serbian Customs administration, In Ecuador, a National Workshop on the modernization potential for example, requested the assistance of Modernization of the Customs Laboratory the WCO in modernizing its laboratory, was organized, enabling laboratory staff are usually discussed which included the construction of a new and WCO experts to discuss particu- extensively with laboratory and the purchase of new equip- lar problems in the day-to-day routine ment, as well as taking on new employees of laboratory staff activities, as well as participants. and training employees on the use of the future plans for the enhancement of the new equipment and on testing methods. laboratory. Staff were also trained on the

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AUSTRIA BELGIUM CZECH REPUBLIC DENMARK FINLAND FRANCE GERMANY ITALY NORWAY SWEDEN THE NETHERLANDS UAE WCO news N° 77 June 2015

amendments introduced in the 2012 edi- participants are informed about relevant composition of food products in particu- tion of the HS, and more particularly on examples of cooperation and networking lar, and ever increasing security requi- specific areas concerning chemical pro- between Customs laboratories in the rements, laboratories need to be ready ducts, pharmaceutical products, “hi-tech” world. Among the initiatives taken in this and organize themselves to meet any products and vehicles. domain are the WCO Regional Customs challenges. Laboratory (RCL) and the Customs The WCO undertook a feasibility study Laboratories European Network (CLEN). Concerning food products in particu- for the implementation of a new Customs lar, Customs administrations have to laboratory in Bogota, Colombia. WCO There is, for the time being, only one WCO find ever more innovative solutions to experts provided information on the RCL. Launched in November 2014 within identify transformed products. A French equipment, infrastructure, staff and trai- the Central Customs Laboratory of Japan laboratory has developed a technique ning necessary for the modernization Customs in Kashiwa City, it will be used identifying fish species by DNA sequen- process. to provide regional training and technical cing, for example. This technique is the assistance to Asia/Pacific administrations only way to trace the species of fish when In Ethiopia, different possibilities were in the field of chemical analysis, as well as they are delivered in pieces. examined in detail regarding the use of to promote information-sharing between laboratories. Two alternative scenarios the region’s Customs chemists, classifica- To keep abreast of the latest techniques, were proposed to the Ethiopian Revenues tion specialists and enforcement officers. as well as maintain cooperation among and Customs Authority (ERCA): coope- one another, there are many other bodies ration with the Ethiopian Conformity Dating back to 1999, the CLEN aims to with which Customs laboratories should Assessment Enterprise (ECAE), or the rationalize, coordinate and optimize the liaise, including universities, private creation of a new ERCA-owned Customs use of human and technical resources companies and standardization bodies. laboratory, even though this could result among European Customs laboratories. in a duplication of equipment. It was also One of its most important missions is to In the field of new psychoactive and suggested that a small laboratory be set anticipate changes in the Customs envi- medicinal substances, Customs admi- up in the Customs warehouse at Kaliti, ronment and to ensure that the Customs nistrations and universities often colla- where about 90% of all imports are clea- laboratories are sufficiently prepared to borate on one-off special cases. For ins- red, to speed up the clearance process. meet both current and future challenges. tance, successful collaboration with the University of Toulouse in France helped Customs officers in Montenegro received Through networking and face-to-face French Customs to identify a medicinal expert training on the use and possibi- contacts between the Customs laborato- substance distributed on the parallel lities of a Customs laboratory for goods ries, the WCO RCL in Japan and the CLEN market that was still at the experimen- classification and tariff management, as aim to make it easier to exchange expe- tal stage. well as training in the management of a riences and best practices. In addition, Customs laboratory. Information about there are other platforms, such as the one There have also been some interesting the equipment, infrastructure, staff and developed by the European Monitoring developments in the use of information training necessary for the modernization Centre for Drugs and Drug Addiction for technology (IT) to expedite procedures of the country’s Customs laboratory was Customs chemists, which allow Customs – a key issue for Customs administra- also provided. scientists to share their results. tions. The Austrian Customs Laboratory, for example, has a computer system In Tanzania, a comprehensive feasibility Informal presentations and encounters allowing a Customs officer to fill in an study on the implementation of a Customs make it easier to establish collaboration electronic form to request clarification laboratory in the Tanzania Revenue initiatives as the case arises, and in this about a Customs classification and add Authority was undertaken. It included regard the WCO encourages its Members’ images of the product concerned. The recommendations on the characteristics Customs laboratories to develop coopera- same system is visible to the laboratory, of Customs laboratories (i.e. their main tive links between one another, especially saving time and informing staff what field of work and how to develop this acti- at the regional level. samples are on the way before they have vity) and the number of laboratories to be physically arrived on the premises. The set up, as well as their location, distribu- Adaptation Customs officer can later see the out- tion, design, organizational structure and From the moment a new fraud is detec- come of the analysis on his or her screen. necessary equipment. ted, laboratories have to implement a new type of test within days. New techniques More information Cooperation and networking need to be developed in order to be ope- www.wcoomd.org/en/topics/key-issues/ Despite their particularities, Customs rational as fast as possible. Today, with customs-laboratories.aspx laboratories face common problems and the arrival of new substances branded challenges. During WCO workshops, as drugs, more precise guidelines on the

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Customs laboratories, chemistry and excise: an historical introduction

By Ignacio Suay-Matallana, POSTDOCTORAL FELLOW, CHEMICAL HERITAGE It is true that the total number of che- James Madison, the fourth US president, FOUNDATION, PHILADELPHIA, UNITED STATES mists – and other experts – working in recognized the importance of Customs Customs laboratories is smaller than in duties, declaring that “the power of taxing AT THE END of July 1882, a strange package other chemistry sites, and that such labo- people and their property is essential to the arrived at the Madrid Customs labora- ratories are less known by society than very existence of government.” Customs tory which was under the direction of other laboratories open to students or the regulations were, therefore, of enormous Gabriel de la Puerta-Ródenas, a Spanish general public. Moreover, undertaking a political and economic importance for chemist who lived from 1839-1908. study on Customs laboratories could be the industrial development and growth Destined for Spain’s Prime Minister, the rather problematic as historians have to of modern nations in Europe and the Spanish authorities, fearing for the Prime deal with dispersed original sources and Americas after what is commonly called Minister’s life, decided to have the pac- archival material, and very often, these ‘the age of revolution.’ kage examined. laboratories are located in different cities and within different government depart- Authorities developed particular stra- They first turned to the Army laboratory, ments, such as Customs houses, port tegies to examine the merchandise and and then to the School of Mines’ labora- authorities or treasury offices. to collect Customs taxes. In Spain, pre- tory in Madrid, but both refused to open liminary inspections were carried out it. Fortunately, De la Puerta, a renow- Genesis by appraisers, port officials and other ned chemist, pharmacist, botanist and Governments have been employing science Customs house officials, but their work doctor, was willing to take on sensitive to prevent fraud and to improve their reve- was limited to visual examinations. assignments, nue collections When chemical analyses were requi- including Authorities developed over the centu- red, local chemists or pharmacists were dealing with ries, but impor- contracted as external experts or consul- packages that particular strategies to examine tant changes in tants. Some were appointed as drug could contain the merchandise and to collect the pattern and inspectors to control the most relevant c h e m i c a l volume of trade ports and national borders, focusing s u b s t a n c e s . Customs taxes. In Spain, in the mid-19th mainly on the study of drug and medi- H e o p e n e d preliminary inspections were century required cine purity, but dealing also with other the package, a new approach types of goods for tax purposes when deactivated carried out by appraisers, port in this domain. As required. As this system proved to be the bomb officials and other Customs new products and inefficient, some countries decided to a nd sta r ted merchandise were set up state-owned laboratories: analysing its house officials, but their being exchan- content. work was limited to visual ged between • The British government created the countries, mainly British Laboratory of the Board of This histori- examinations. When chemical due to the reduc- Excise, and the Laboratory of the cal anecdote analyses were required, local tion in trans- Board of Customs in 1842 and 1860 is just one portations costs, respectively; example of chemists or pharmacists were new spaces and the important contracted as external experts experts were nee- • The French Customs laboratory role played ded to enforce (Laboratoire des Douanes et Droits by Customs or consultants. tariff regulations. Indirects) was founded in 1875; laboratories, a n d t h e i r Although they • The Customs laboratory of New York special consideration and significance now only account for a small amount of was established in 1878, and later for national governments. Science his- the national revenue in many countries, reorganized by US Customs and torians have extensively studied the during the 19th century, Customs duties Border Protection into a network of contributions and work of many relevant were an important source of income for Laboratories and Scientific Services; scientists from different ages, and more governments. For instance, they repre- recently, they have also considered scien- sented about 15% of the Spanish govern- • The Analytical Laboratory of Singapore tific spaces such as hospitals, including ment’s revenue in the mid-19th century, was created in 1885, one of the first in academic and municipal laboratories, and they were almost the exclusive source Asia; but Customs laboratories have scarcely of income for the United States (US) been studied. government before the civil war.

34 WCO news N° 77 June 2015

until the 1920s, when the director of the Madrid laboratory convinced the government of the need to develop a network of regional laboratories as the country, emer- ging from World War I, began enjoying strong growth and rising trade exchanges. Ten new laboratories were set up in cities such as Barcelona, Seville and Valencia during the 1920s and the 1930s.

The decentralization of the laboratories implied the organization and expansion of the service. In Spain, 20 chemists and pharmacists passed a public examination U.S. Customs and Border Protection historical collections Chief Chemist Walter L. Howell analysing sugar at the New Orleans laboratory, 1906. to be appointed as Customs chemists in 1925. After a short practical training period, under the supervision of the direc- • The Italian Customs laboratory growth in the volume of alcohol, including tor of the Customs central laboratory in (Laboratorio Chimico delle Gabelle) was cheap alcohol produced for industrial pro- Madrid, they were moved to the newly- set up in 1886 from a previous tobacco poses and not for human consumption, created regional Customs laboratories. laboratory; imported into Spain after the adoption by The new structure of the service included other European countries of new taxes on one director, four chemists and one clerk • The Spanish Customs laboratory alcohol in the 1880s. The government felt in Madrid, as well as a director and a che- (Laboratorio central de análisis quí- that it needed more and better chemical mist in each regional laboratory. mico) was established in 1888; analyses to deal with these imports as well as with other products such as petrol, oil, Experts, controversies and cooperation • The Government Analytical Laboratory asphalt, sugar and other goods not pro- Customs laboratories are exceptional was established in Cape Town, South duced domestically. spaces, where scientific, economic, regula- Africa in 1891 followed by the creation tory and administrative knowledge is com- of a branch laboratory in Grahamstown, Development and expansion bined. In many countries, they have been South Africa in 1910; Most countries having established a single headed by some of the most recognized Customs laboratory started expanding and influential scientists of their time. • Customs laboratories were in operation their numbers between the late 19th cen- in Alexandria, Egypt and Tripoli, Libya tury and the first part of the 20th century. Stanislao Cannizzaro (1826-1910), who by 1906; The US created one of the most decentra- built a modern and well-equipped chemi- lized Customs laboratory networks. Its cal laboratory in Rome, Italy, was one of • The Analytical Laboratory of the Straits first and biggest laboratory was located in greatest Italian chemists and is considered Settlements in Penang, Malaysia was set New York, as the city port received about as having contributed to laying the foun- up in 1909. 70% of all US imports. New laboratories dation of modern chemistry. Ulysse Gayon were also established in cities such as (1845-1929), one of the favourite pupils of Although the academic, scientific, econo- Chicago, Philadelphia and San Francisco. the French scientist Louis Pasteur, was mic and socio-political contexts differed in charge of the Customs laboratory in from country to country, the creation of In the United Kingdom (UK), the network Bordeaux, France. a Customs laboratory was a great step spread even faster, from one laboratory in forward in improving the efficiency of London in 1842 to 28 ‘chemical stations’ In the UK, British chemist Edward Thorpe Customs services everywhere. These labo- in the 1870s. France also started creating (1845-1925), who served as President ratories were a new scientific platform to a large network of Customs laboratories, of the Society of Chemical Industry, provide general technical support for law starting with five laboratories in 1875, and took over the direction of the Somerset enforcement activities. expanding to 16 by 1897, although some House Laboratory, also known as the were closed shortly thereafter. Government Laboratory, which was origi- In Spain, before the creation of a central nally established in 1842 for the prevention Customs laboratory, a Customs chemical The expansion in Italy and Spain was of the adulteration of tobacco products and office had been in existence since 1850. slower. In Italy, a central Customs labora- then expanded by the 1875 Sale of Food Although also managed by the Ministry tory was created in Rome in 1886, with a and Drugs Law. of Finance, it had only one chemist and a regional branch in Genoa. Later – between clerk in attendance with limited resources. the 1890s and the 1930s – nine new labora- Thorpe moved the laboratory in 1897 to a tories were established. Meanwhile, Spain new building of his own design and helped One of the factors which triggered the maintained a very centralized system with to further the effectiveness and reputation creation of the laboratory was the sudden just one laboratory located in Madrid, of this government laboratory. With his

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staff, he worked on matters of public health, including Dominican Republic opens top-notch Customs laboratory the detection of arsenic in beer and the elimination of lead from pottery.

In the case of Spain, there was Gabriel de la Puerta- Ródenas, mentioned in the opening paragraph of this article, and José Casares-Gil (1866-1961) who had notable academic and political authority. Both were chairs at the University of Madrid, fellows of different national and international scientific academies, and also members of the Senate.

Because of their location between the scientific world and the economic world, Customs chemists were experts at circulating between different spaces – universities, academies, industries, administrative offices, and even courts – and frequently participated in controversies or disputes with economic and social implications.

For instance, in the 1930s many chemists, agriculture engineers, diplomats and grape producers from different countries participated in international conferences to agree on a “wine quality” standard that included common gauge practices and chemical operations to test this alcoholic beverage which was highly taxed at that time.

When importers or traders were not satisfied with the results of the chemical analysis, usually because they had to pay more taxes than expected, they were allowed to request a second analysis of the merchandise. Afterwards, it was even possible to appeal the chemical test to a Customs court, where chemists had to explain their scientific procedures and the report.

In other cases, there were problems related to the use of different standards to determine quality or purity of substances, so the value of the merchandise was different depending on the country. Finally, there were also economic disputes among different countries that imposed Customs taxes to protect their domestic goods and their national economy.

Although these issues are still current and valid today, the establishment, after World War II, of new international regulatory organizations, such as the WCO, was a crucial step forward in reducing economic disputes, achieving standardization and improving the admi nistration of Customs, thereby facilitating international commerce.

References pertaining to this article may be obtained directly from the author, Ignacio Suay-Matallana.

More information [email protected] Photos © Dominican Republic General Directorate of Customs

36 WCO news N° 77 June 2015

Dominican Republic opens top-notch Customs laboratory

the potential entry into the country of pro- not subjected to tests and sampling, espe- ducts that may adversely affect any aspect of cially in industries dealing with chemicals, human or animal health, the environment food products, pharmaceuticals, cosmetics, and natural resources. It is one of the most textiles and metal products, among others. significant assets available to the country’s Customs administration. In addition, the Dominican Republic’s Customs laboratory will be an effective Prior to its establishment, the analysis of ally to the national agricultural, agriche- samples was conducted at laboratories in mical, pharmaceutical and petrochemical Mexico and Spain, as well as at national industries, as well as to public and private laboratories belonging to local universities, institutions, as they will have a centre to depending on the complexity of the case. The which they can refer materials or subs- WCO was also consulted. The principal rea- tances for analysis when they have ques- son behind the DGA’s decision to construct tions about the biological origin or com- the new laboratory was the pressing need to position of such goods. be able to analyse metallic and non-metallic mineral products, such as gold, silver, The laboratory was constructed using the copper, zinc, iron, aluminum, palladium, DGA’s own funds at a cost of 3,573,024 platinum and europium, exported from US dollars – equivalent to 155,283,638 the country’s mining concessions, that were Dominican pesos, inclusive of construc- complex to identify, both in terms of quan- tion works and adjustments to the physical tity and quality. facilities, technological equipment, fittings, etc. The DGA also drew upon advice from By the General Directorate Exhaustive controls of these substances are the Spanish Customs and Excise Central of Customs of the Dominican required upon export to determine compo- Laboratory of Madrid, which has been in Republic nent volumes which are of fiscal importance operation for about 125 years and has a ON 18 FEBRUARY 2015, the General to the national budget. According to data remarkable ability to keep pace with scien- Directorate of Customs (DGA) of the published by the Dominican Geology Society tific progress necessary to tackle the increa- Dominican Republic officially opened a (SODOGEO), the country is sitting on nearly singly complex challenges related to physical modern scientific laboratory occupying a 58 billion US dollars’ worth of unexplored inspection of goods. site measuring 1,217 square metres in the reserves of minerals and metals. city of Santo Domingo. The facility has an The expert chemists selected to join the uninterruptible power supply (UPS), an The Customs laboratory will also be an laboratory staff had to pass a series of tests emergency generator, kitchen facilities, indispensable tool for the Dominican to demonstrate not only their analytical vehicle parking and an area for unloading Republic to monitor compliance with envi- expertise but also their specialist knowledge and receiving samples, and complies with ronmental protection regulations relating and skills in taxation and Customs legis- the highest health and safety standards. to, for example, ozone-depleting substances, lation. They also received special training Designed to improve the managerial chemical weapons, heavy metals, persistent abroad in team management. All this was efficiency, predictability and availability, organic compounds and pesticides, and for done with the aim of ensuring that this within its remit, of the DGA vis-à-vis all the purposes of protecting endangered and modern facility runs smoothly and delivers external trade users and operators, the new protected animals, combating drugs traf- high-level results for the country. laboratory is at the forefront of 21st century ficking, controlling chemical precursors, cutting-edge technology and science. etc. Hence the importance to Customs of a The establishment of the laboratory repre- laboratory of this status built to high speci- sents a significant step forward for the The laboratory embodies the political will fications and incorporating state-of-the-art DGA in its process of institutional reform on the part of the current management of equipment. and modernization. It will also benefit the the DGA to implement the institutional entire region, as the laboratory will be open reforms and modernization currently under By being able to identify products through to neighbouring Customs administrations way as part of the Customs 2013-2016 stra- analysis, it will be possible to determine and to regional and international bodies that tegic plan. The role of the laboratory is not precisely the applicable fiscal regime and require an analysis to be conducted of any only to satisfy the analytical and inspection to improve the effectiveness of Customs product that is the subject either of a trade requirements for goods that are difficult to controls on restricted or prohibited products, or classification dispute relating to its com- identify in order to determine the correct thereby preventing uncertainty, arbitrari- position or specific properties. duties and taxes payable under the prevai- ness and, worst of all, fiscal evasion through ling tariff structure, but also to provide high Customs fraud – a very frequent occurrence More information standards of protection for the public against in countries where imported goods are often www.aduanas.gob.do

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Is it possible to use a private laboratory as a Customs laboratory?

By Laila Jensen, methods important for Customs purposes, you with sound and valid results, when it CUSTOMS OFFICER, AND Preben Buchholtz Hansen, which participates regularly in proficiency comes to the content of alcohol, sugars, DIRECTOR GENERAL, DANISH CUSTOMS AND TAX tests and which has a quality management proteins, etc., but not many of them have ADMINISTRATION system is generally a good idea. Besides its knowledge of the Harmonized System accreditation, another advantage of having – its definition of stainless steel, or that IN ONE WORD: Yes! At least, that is the an external laboratory is that the analysis theobromine is decisive when determi- experience of the Danish Customs and is done by a body independent of SKAT, ning cocoa content, or what is meant with Tax Administration (SKAT). There are, thereby adding credibility to the results composition leather, or how to differen- of course, issues to be considered and of the laboratory. As SKAT bases its final tiate between ceramics and porcelain, etc. addressed before taking the decision to decision on these results, it also adds extra use a private laboratory as a Customs credibility to Customs’ decision. There is also the issue of the contract laboratory, but once the issues have been between the laboratory and the Customs addressed, it is entirely possible. Issues that need to be addressed administration to consider. Due to the There are, of course, some issues that need rules on public procurement, every four The first question that arises is why even to be addressed before deciding on the use years a call for tender for the contract consider using a private laboratory? Being of a private laboratory as a Customs labo- has to be published. This requires quite a small country with an equally small ratory. The same factor that lends extra a significant amount of work, both from number of Customs officers, it would be creditability to the analytical result – the the Customs authority and the tenderers difficult for Denmark to finance a Customs fact that the laboratory is not part of the wishing to submit a bid for the contract. laboratory with the necessary equipment Customs authority – is also cause for the and staff it with qualified personnel. Even main issue that needs to be addressed, Special care must be taken to ensure that if was possible, SKAT would not have a namely the matter of confidentiality. the contract covers all the needs of the sufficient number of samples to analyse, Customs administration at a reasonable thereby finding it hard to justify the cost of It goes without saying that the contract price level. Even the best laboratory will having its own Customs laboratory. between SKAT and FORCE Technology occasionally need help from experts out- stipulates absolute confidentiality. side the laboratory, so procedures concer- Advantages for Customs However, even in everyday work, confi- ning such subcontractors should also be The most important advantage is that dentiality remains a focus issue – for in place. instead of just having access to the exper- example, emails are used internally tise of one or two Customs chemists between Customs officers without having Collaboration between Customs and the and a few laboratory technicians, SKAT to worry about the confidentiality of the laboratory now has access to the expertise of the content. But as the laboratory does not use For the Customs officer, collaborating with approximately 1,300 employees of FORCE SKAT’s internal secure mail system, extra the laboratory follows the normal practice. Technology – the company that it uses as precaution is needed when communica- A sample is taken or provided together a Customs laboratory – who cover a wide ting with them. with a request for an advance ruling. The range of specialities. officer-in-charge then decides if an analysis Therefore, proper routines and secure is required – if so, the sample together with Not only can the company handle usual emails, including a system to handle any additional information is forwarded to SKAT requests to analyse the content of requests for analysis, receipts of samples the laboratory for analysis. After perfor- sugar, cocoa, alcohol, proteins, etc., but and the exchange of analytical results, ming the analysis, the laboratory forwards also questions about materials like poly- may all be helpful in ensuring safe and its report and a suggested classification to mers, ceramics and metals, including how easy communication between Customs the Customs officer-in-charge. a set-top box works and whether a screw and the laboratory. has been turned from a bar or not, as well It is then up to the Customs officer to make as liquid scintillation analysis to determine Another issue is that as the laboratory is the final decision based on the available biogenic alcohol or fuel, etc. Seen from the private, it is often not recognized as an offi- information. The officer is not obliged to point of view of a Customs officer, it makes cial Customs laboratory, making access to follow the laboratory’s suggested classifi- life easier when all technical questions can forums reserved for official Customs labo- cation but will mostly do so. Any doubts be directed to the same place and not to a ratories, on occasion, slightly more proble- or uncertainties will usually be discussed wide range of advisory bodies. matic than would otherwise be the case. between the Customs officer-in-charge and the laboratory before a suggested clas- Using a laboratory which is ISO 17025 Finding the right laboratory is another sification is overturned. accredited for some of the analytical major issue. Many laboratories can provide

38 WCO news N° 77 June 2015

SKAT (Tax)

The Danish Customs and Tax Administration, or SKAT, is an independent national agency responsible for admi- nistering and enforcing tax laws. SKAT handles the administration of all tasks relating to direct and indirect taxes, The importer may request access to the communication Customs, debt collection, and the tax assessment of real between Customs and the laboratory – the laboratory’s estate and vehicles. analytical results would generally be provided to the reques- ting importer but any other communication would only be The contract between SKAT and FORCE Technology covers provided upon special request under the rules for ‘access a wide array of topics. Besides the analysis of samples for to own files.’ Customs, it also covers analysis for excise duty purposes, technical advice concerning legal texts and the translation Besides everyday discussions between individual Customs thereof, and participation in different meetings at the natio- officers and the laboratory, quarterly meetings are also held nal and international level. between representatives of FORCE Technology and SKAT to discuss general issues, problematic cases, and so on. FORCE Technology The use of a private laboratory as a Customs laboratory is not a new thing in Denmark. The first contract between FORCE Technology is one of the leading technological Customs and a private laboratory was signed on 1 April consulting and service companies in Denmark and interna- 1908! Over the years the name of the laboratory has changed tionally. The company makes a targeted effort to sell highly a number of times, it has been a private laboratory then one specialized engineering knowledge, offering practical and under governmental control and later privatized again, it cost-effective solutions to a wide range of industries. It has has merged with other laboratories, etc., however collabo- more than 1,300 employees working at its headquarters in ration between Customs and the laboratory has continued Brøndby and in offices all over Denmark, as well as at sub- throughout. sidiaries in China, Norway, Singapore and Sweden.

The right laboratory is a must The Customs laboratory is part of FORCE Technology’s So yes, it is possible to use a private laboratory as a Customs department of chemical analysis. It is equipped with modern laboratory. Although it does require some considerations analytical instruments for inorganic, organic, material and beforehand, what is most important is that it should be the surface analysis, as well as equipment for physical testing. right laboratory which can handle all the needs of a Customs The Customs chemists consult regularly with experts from administration. other departments, when additional specialized knowledge is needed to answer questions relating to Customs matters. More information www.skat.dk

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Ira Reese, Executive Director of CBP’s Laboratories and Scientific Services and current Chairperson of the WCO Scientific Sub-Committee, at a CBP laboratory where scientists Stephen Cassata and Michael McCormick examine seized digital evidence. Photo: James Tourtellotte Customs laboratories in the United States: at the frontline of fighting fraud

By Marcy Mason, A WRITER WHO COVERS TRADE FOR US CUSTOMS Some of the honey was contaminated. something you can do from a cursory AND BORDER PROTECTION When the shipments arrived at the port glance or examination. It requires an in- of Seattle, samples of the honey were sent depth look by scientists.” IN LATE DECEMBER 2010, the news broke to the US Customs and Border Protection about a Seattle court case involving coun- (CBP) laboratories for testing. There, the And as Reese pointed out, “products don’t terfeit honey. A 70-year old Bellevue, true origin of the honey was discovered stop being imported incorrectly until you Washington man, Chung Po Liu, had been and the CBP scientists found that it was take some action to stop them. Legally, it sentenced to a year and a day in prison and tainted with Ciprofloxacin, an antibiotic is very difficult to develop a case without was ordered to pay 400,000 US dollars that is banned in the US as an unsafe food the presentation of physical evidence,” he (USD) in restitution for importing falsely additive. said. “Our labs present the physical evi- declared Chinese honey. dence that can be further investigated or While few outside the trade community brought into court for prosecution. It gives Liu was trying to avoid paying USD 2.9 are aware of the vital role that the CBP legal reasoning or probable cause for sei- million in tariffs on the honey, which had labs play in protecting Americans and the zure of the material so it doesn’t enter the been shipped through the Philippines and US economy, the labs’ work is critically commerce of the US and end up on store Thailand where it was re-labelled to make important to keeping the public safe from shelves.” it appear as if it were a product of those counterfeit, substandard, or any other type countries. But aside from attempting to of fraudulent goods. Over the years, the CBP labs have tested avoid paying millions of dollars in anti- a multitude of suspect goods. Starting in dumping duties that had been added to “In order to determine whether goods the 1950s, the labs began testing for coun- the price of the honey to protect United are fraudulent, you need technical ana- terfeits as part of the US Customs Service, States (US) industry, Liu’s deception had lysis. You need to be able to physically one of CBP’s legacy agencies. “Customs endangered the American public. analyse the shipment,” said Ira Reese, the did most of the investigations on impor- Executive Director of CBP’s Laboratories ted alcohol,” said Reese. “There were big and Scientific Services division. “It’s not investigations regarding the importation

40 WCO news N° 77 June 2015

of fake brandy, which was alcohol mixed “I did a chemical analysis on a pharma- comparisons with the test samples to see with flavourings and caramel colouring,” ceutical shipment that was sent by one of if the proteins matched. he said. our officers to the Chicago lab,” said Mike McCormick, a CBP science officer who is DNA testing As time passed, the labs expanded their now based at the agency’s headquarters. Eventually, the protein testing became testing of counterfeit and substandard pro- “There were two active ingredients to treat outdated and the New York lab discovered ducts. All kinds of goods were analysed erectile dysfunction in the same tablet – a more advanced technique of identifying including designer clothing, handbags, sildenafil citrate and tadalafil, the active species using DNA bar coding. The bar shoes, jewellery, perfumes, toys, compu- ingredients for Viagra and Cialis respec- coding analysis identifies species by using ters, pharmaceuticals and the list goes on. tively,” he said. “This combination hasn’t a section of DNA from the organism’s “Anytime there’s the potential to make been clinically tested or been approved, so genetic material. A key component of the money, there’s a counterfeit,” said Reese. you wouldn’t know what kind of an effect DNA bar coding process is a database that it would have.” contains a library of species identifiers. Dangerous goods Although the economic losses to American Likewise, the CBP “We’re comparing companies are staggering, estimated labs are at the “Our labs present the samples that are conservatively at hundreds of millions of forefront of nearly submitted to the dollars per year, that’s not all that’s trou- every economic physical evidence that can lab for analysis with bling. Many knockoffs are dangerous. or safety-related be further investigated the known species issue that involves in the database,” “Counterfeiters will use whatever mate- potentially frau- or brought into court for said Goldstein. rials they have to make a copy of a legiti- dulent imports prosecution. It gives legal “What we’re doing mate product. They don’t care if it’s dan- or exports. For is called nonhuman gerous. They’re just out to make money,” exa mple, si nce reasoning or probable DNA testing. We’re said Stephen Cassata, a senior science 2003, when the cause for seizure of the looking to iden- officer who works at CBP’s Laboratories US Department of tify a species rather and Scientific Services headquarters in Commerce issued material so it doesn’t enter than an individual. Washington, D.C. “They don’t pay any an antidumping the commerce of the Human DNA testing licensing fees to a legitimate rights hol- order to protect looks to identify an der and there’s no real inspection of these the domestic cat- US and end up on store individual,” she said. products for quality assurance. So wearing fish industry, CBP’s shelves.” apparel, for example, may still have chemi- New York lab has T h e d a t a b a s e cal solvents in the fabric that could irritate been testing sea- contains DNA bar your skin.” food to identify codes for more than mislabelled fish. 2 million specimens of plants and animals, But the dangers can be worse. In 2007, the including approximately 14,000 species of CBP labs were on high alert when cats and The problem arose because pangasius, a fish, not including shellfish. “Using our dogs were dying from melamine-tainted Vietnamese fish that has a striking resem- old technique, we needed authenticated pet food. “It went on for about six months,” blance to catfish, was being sold below fair samples that were very difficult to obtain. said Reese. “Instead of putting expensive market value and was negatively impac- So we were limited in what we could iden- protein into the products, they used mela- ting the sale of US catfish. As a result of tify previously,” said Goldstein. mine, a cheap chemical used to make plas- the antidumping order, importers of the tics. It resulted in killing a lot of dogs and Vietnamese fish were required to pay “Now we can just take our unknown and cats, causing them to die of kidney failure,” higher duties to compensate for the unfair search it against the database and look at he said. pricing. This, in turn, led to mislabelling the results. We can identify a much lar- of the fish to pass it off as everything from ger range of products.” The DNA testing That same year, the CBP labs also found catfish to sole to flounder to grouper to is also more accurate. “It’s a much more toothpaste containing diethylene glycol, avoid paying the extra tariff. specific and accurate technique because a poisonous chemical used in antifreeze. of the coding matches. You get a match or “It was suspected out in the field and they CBP’s New York lab initially used protein you don’t get a match. It’s really as simple sent it to us,” said Reese. “We confirmed testing to identify the fish. “We were loo- as that,” said Goldstein. “And the matches their suspicion.” king at the proteins in the fish to identify are a 98% probability or better.” catfish and the three species that were The CBP labs also have uncovered other named in the dumping order,” said Laura But how does all of this protect the highly dangerous counterfeit products Goldstein, the Director of CBP’s New American public? “We’re looking at the that could harm unsuspecting consumers. York lab. The technique required authen- species and identifying if it’s what it’s With the advent of the Internet, counterfeit tic references of each type of fish so that being claimed as, what it’s being impor- and unapproved drugs from fake online Goldstein’s team could do side-by-side ted as, and what it’s being sold as,” said pharmacies have become readily available. Goldstein. “We’re also testing the fish

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Sharon Stricklin, a CBP scientist, discusses the microscopic analysis Jenny Tsang, Assistant Director of CBP’s San Francisco laboratory, of an adulterated honey sample with Carson Watts, Director of CBP’s applies a chemical solvent to a computer chip to see if its coating or Savannah laboratory. Photo: Christopher Kana manufacturer’s markings can be removed, one of the many signs of a counterfeit chip. Photo: Rand Careaga

for contaminants such as antibiotics and there with effective enforcement tools the US companies wanted the CBP scien- antifungals that we don’t want in our such as the DNA testing that the CBP tists to find a way to protect the domestic foods,” she said. “In some cases, we’re labs are using,” he said. “As consumers, industry. working with other agencies that look at people should know what they’re buying. products that are sold here in the US. We’re They should know what they’re eating. “At the time, we weren’t able to tell where trying our best to keep unsafe products out We all want to know what’s going into the imported honey came from,” said of the marketplace so that people aren’t our bodies.” Watts. “One of the things we stumbled exposed to them.” onto was the fact that the Chinese were Contaminated honey using the antibiotic chloramphenicol In recent months, high profile studies on During the early 2000s, honey became to keep the beehives healthy, and it was seafood fraud have drawn considerable another concern of the CBP labs. “The showing up in the honey. So the very first attention to the problems of mislabelled Chinese were importing honey into the thing we did was test the honey for this fish. “It’s an age-old problem. Mislabelling US at a very low price and it was endange- antibiotic,” he said. “If it contained chlo- of seafood is not a new concept,” said Matt ring our domestic industry,” said Carson ramphenicol, it was pretty much a dead Fass, the President of Maritime Products Watts, the Director of CBP’s Savannah lab giveaway that the product came from International, a Newport News, Virginia- in Georgia. China.” based company that imports, exports, and distributes seafood products from all over In 2001, after the US Department of Furthermore, chloramphenicol is pro- the world. Commerce imposed stiff antidumping hibited in food products and as such the duties on Chinese honey, some of the adulterated honey would not have been “We’ve done a lot as an industry to police major US honey companies visited the allowed into the US for safety reasons. ourselves, but it helps to partner with the Savannah lab. Chinese exporters were cir- “For a small segment of the population, government agencies that also can be out cumventing the antidumping duties and

42 WCO news N° 77 June 2015

exposure to chloramphenicol will induce a condition called aplas- Interagency tic anemia,” said Watts. cooperation “Aplastic anemia is a blood disorder that can be fatal. While chloramphenicol is used in the US to treat some very serious infec- tions, if someone develops aplastic anemia, he or she could die,” CBP’s labs have helped other agencies protect said Watts. “It’s imperative to keep a food product that contains the American public. For example, in 2010, the chloramphenicol off the store shelves.” labs tested shipments of honey from Mongolia to confirm the country of origin. The CBP scientists It didn’t take long for the Chinese exporters to catch on. “For a short discovered the honey was actually from China period of time, the chloramphenicol disappeared,” said Watts. “They and that some of the product was contaminated knew we were using that as a marker to identify honey coming from with antibiotics. The shipments were seized and China.” But by that point, the Savannah lab had created a database the US Food and Drug Administration (FDA), to determine the honey’s geographic origin. the regulatory agency responsible for assuring that food coming into the US is safe, was notified. When the US honey companies had visited the lab a couple of years earlier, the CBP scientists had asked them for help. “We told them The FDA attempted to contact the importer, but that one of the specialties of the Savannah lab was identifying the shipment was abandoned and no importer country of origin based on trace metal analysis,” said Watts. In could be found. This, in turn, sparked an FDA other words, the honey could be identified by its trace metal ele- investigation. “We found thousands of pages of ments such as chromium, iron or copper. “If the companies could fraudulent documents from various importers. help us obtain honey from various countries, we might be able to We call them ‘shell companies,’” said Nicholas develop a profile to tell us where the honey came from,” he said. Lahey, an investigator for the FDA’s Los Angeles District Import Operations. The honey companies complied and the Savannah lab developed the ability to determine the honey’s geographic origin. Then, the “Our investigators found that a lot of these shell Chinese exporters started transshipping the honey to different companies are really just post office boxes. There countries. “The honey was going to Thailand, Malaysia, India and aren’t any actual company locations. They file various other places so it wouldn’t enter into the US as Chinese articles of incorporation, but there’s no one pre- honey,” said Watts. As the Chinese exporters changed their trans- sent in the US. They’re in China,” he said. “The shipment routes, the Savannah lab needed to obtain samples of only people here are paid freight forwarders and honey from each of the countries. “We were literally chasing them brokers.” around the globe,” said Watts. The investigation also revealed that the company Changing strategies fronts involved a couple of freight forwarders Then the Chinese exporters changed their strategy. This time the who were importing restricted and prohibited shipments were sent from China, but they weren’t declared as honey. products that could harm the public. The FDA The shipping documents labelled the cargo as sugar syrup. “They kept a close watch on the freight forwarders and began to adulterate the honey with sugar syrups in an effort to in 2012 targeted a shipment of apple juice that one find another way to get around the antidumping duties,” explained of the freight forwarders was handling for a client. Watts. Both the CBP and FDA labs tested the apple juice and found fraud. With the addition of sugar syrups, the product no longer tested as pure Chinese honey, and if the percentage of syrup was high “Lo and behold, it was not Chinese apple juice. enough, the shipment wouldn’t be subject to the duties. “The chea- It was Chinese honey contaminated with trace pest ingredient to adulterate honey with is high fructose corn levels of arsenic, lead and antibiotics,” said Lahey. syrup,” said Watts. “We never would have looked at the apple juice if we hadn’t done the investigation, which was As the cat-and-mouse game continued, the Savannah lab disco- initiated because of the country of origin testing vered it could detect the high fructose corn syrup by identifying done by the CBP labs.” differences in the syrup’s carbon atoms. “Almost a year went by and again the Chinese exporters wised up,” said Watts. “They realized This prompted the FDA to look further. “We that the CBP labs could tell if the honey had been adulterated with found a slew of other companies that were brin- high fructose corn syrup, so they switched to high fructose rice ging in different commodities, not just honey. syrup instead.” There were dietary supplements and other FDA- regulated products,” said Lahey. “It triggered a The percentage of high fructose rice syrup was undetectable whole chain, which again, was based on the CBP because the differences between the syrup’s and the honey’s carbon lab results from two years earlier.” atoms were indistinguishable. At that point the US Department

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of Commerce changed the antidumping “When it’s heated, the surface of the steel down to money. They use whatever means order to say that imported Chinese honey can either lose carbon or gain carbon. If is necessary to sell goods at a higher price. containing any amount of rice syrup it loses carbon, it gets too soft. If it gains For consumers, it’s almost impossible to would be subject to the additional anti- carbon, it gets too brittle. Somewhere in identify counterfeit electronic products by dumping duties, which currently run as the middle is where it should be.” looking at them,” she said. high as USD 2.63 per kilogram. The bolts also undergo other tests to The dangers of bogus computers, routers Most recently, Chinese exporters have check the chemical composition and the and chips have been well documented. adopted a new strategy. The shipments are manufacturer’s mark. “A fastener or a bolt Fake electronic and computer compo- no longer honey. They are now 100% rice is suspect right away if it doesn’t have a nents have cost the electronics and infor- syrup and the shipping documentation is manufacturer’s mark,” said MacMillan. mation technology industries an estima- accurate. “We analysed a sample in the lab “It’s already not in compliance with the ted USD 100 billion per year, according last week,” said Watts, “and sure enough, Fastener Quality Act, which says it must be to the Electronic Components Industry there wasn’t any honey in it, but the packa marked. As soon as you see one of those, Association. But the seriousness of the ging on the product for retail sale says it’s you know you’ve got a problem.” problem extends way beyond economic pure honey. They’re trying to pull the wool damage to US companies. over the public’s eyes.” Counterfeit electronics Electronics are among the most highly “Counterfeit products not only put Substandard bolts counterfeited goods that the CBP labs Cisco’s brand name at risk, but also The CBP labs also protect the public by test. “We first noticed a counterfeiting potentially places at risk all of the testing goods to make sure they aren’t problem in the networks that use substandard. For more than 25 years, the early 1990s, when t ho s e pro duc t s labs have been testing graded fasteners and we began looking “Their ability to find fake and the indivi- bolts to ensure they meet specification. at electronic com- products is a major part duals that come ponents,” said Jenny in contact with The dangers of substandard and coun- Tsang, the Assistant of the war on counterfeits. them,” said Paul terfeit fasteners were highly publicized Director of CBP’s An alert officer may see Ortiz, then-Head during the mid- to late-1980s when they San Francisco lab. of Worldwide were linked to serious construction and “Then we didn’t something is not quite Brand Protection engineering failures, which, in some cases, see anything for right, but he or she isn’t for Cisco Systems resulted in death. In 1990, the Fastener awhile, but in the Inc., one of the Quality Act was signed into US law requi- last several years, in a position to act upon world’s leading Centre for Customs & Excise Studies ring that fasteners and bolts meet certain we’re seeing a lot it until the lab is able to networking tech- standards for strength, grade and manu- of counterfeit com- nology firms facturer’s marks. puter chips, rou- confirm the contents of based in San Jose, ters, switches and the product.” California. At the CBP Chicago lab, fasteners and other electronic bolts are tested for tensile strength using a products.” “If a chip is not The Centre for Customs and Excise Studies (CCES) is the world’s leading 400,000-pound universal testing machine. meeting specifi- “It’s a big hydraulic lifter that’s holding the According to Tsang, cation – if it gets provider of training and education in the highly specialised area of top of the bolt. It can lift 200 tons,” said reused chips are especially prevalent. too hot or it’s not functioning properly Ernie MacMillan, the Assistant Director of “Chips are counterfeit more and more – that’s potentially a big safety concern,” customs, border management and international revenue administration. CBP’s Savannah lab, who for several years because nowadays we salvage our com- said Tsang. “Counterfeit chips in a com- led the Chicago lab’s team that tests metal, puter parts and send the waste to China puter can ruin infrastructure, which ceramic and mineral goods. or India for recycling,” she said. “Instead could potentially paralyze the flow of of throwing these parts out, counterfeiters trade or our nation’s security systems.” “When we test the bolts, we pull them remove the chips, scrape off the original until they break. When we’re done, the manufacturer’s markings and then remark Malware concerns BAChELOR DEGREES | pOSTGRADuATE DEGREES | DOCTORATES | RESEARCh bolt looks like a piece of stretched taffy them with forged dates, brand names and There are also growing concerns that INTERNATIONAL pARTNERShIpS | vOCATIONAL TRAINING [similar to a toffee],” he said. One of the product codes to resell them as brand chips could be embedded with malware, strongest fasteners is a 1 1/2-inch, grade new,” said Tsang. malicious software designed specifi- 8 bolt. “It’s strong enough to lift 17 large cally to damage or disrupt a system. “It African elephants without breaking,” said “We’ve also seen a lot of components could shut down a power grid or a hos- We deliver courses in: MacMillan. that were originally a genuine product, pital operating room. The possibilities but then have been remade to look like a are endless,” said Tsang. Likewise, it Border Management | Customs Administration The CBP labs also test the bolts for hard- much higher-value product from the same could allow a third party to gain access ness, especially at the surface. “We test manufacturer, so that counterfeiters can to sensitive personal or government the surface hardness of the bolts because sell it for a much higher amount,” said information. International Revenue Administration the steel is heat treated,” said MacMillan. Tsang. “With counterfeiters, it all comes www.customscentre.com | [email protected] KNOWLEDGE BEYOND BORDERS 44 WCO news N° 77 June 2015

CBP’s San Francisco lab uses a variety of date code. If they all don’t match, that “Our labs will test goods as fast as we testing techniques to weed out the coun- means the product is counterfeit.” can,” said Donnelly, a registered phar- terfeits. Last year, the lab purchased new macist and retired Federal Bureau of X-ray equipment to examine as many as The value of the CBP labs has not gone Investigation (FBI) special agent, “but if a thousand chips at a time. “We look to unnoticed. “The CBP lab scientists are CBP has labs in the same city as the ports, see if there are inconsistencies in the way on the frontlines with the officers and the scientists are able to turn around a the chips are configured,” said Tsang. they’re crucial,” said Brian Donnelly, quick and effective result potentially The lab also does a surface examina- the Global Security Director for the within minutes or hours of interacting tion of the chips. “We use several dif- Americas Region for Pfizer, one of with the product, which can greatly faci- ferent solvents,” she said. “We’re testing the world’s largest pharmaceutical litate a criminal investigation.” to see if the coating comes off. It’s one companies. of the indications that a chip could be But it’s an ongoing battle and an evol- counterfeit.” “Their ability to find fake products is a ving process. “We’re continuing to refine major part of the war on counterfeits. our techniques. The CBP labs are not If a chip, component or networking sys- An alert officer may see something is not in a position of stasis,” said Watts, the tem is suspected of being counterfeit, quite right, but he or she isn’t in a posi- Director of CBP’s Savannah lab. “We the lab contacts the rights holder. For tion to act upon it until the lab is able have our ear to the ground, and as smug- example, said Tsang, “If it’s a Cisco pro- to confirm the contents of the product,” gling techniques and technology change, duct, we confer with them. Cisco has a said Donnelly. The CBP labs, which are we’re addressing them early on.” database and each of the products has its located throughout the US and in Puerto own serial number, model number and Rico, have other advantages too. More information www.cbp.gov

Centre for Customs & Excise Studies

The Centre for Customs and Excise Studies (CCES) is the world’s leading provider of training and education in the highly specialised area of customs, border management and international revenue administration.

BAChELOR DEGREES | pOSTGRADuATE DEGREES | DOCTORATES | RESEARCh INTERNATIONAL pARTNERShIpS | vOCATIONAL TRAINING

We deliver courses in: Border Management | Customs Administration International Revenue Administration www.customscentre.com | [email protected] KNOWLEDGE BEYOND BORDERS