Product Integrity Concerns in Low-Cost Sourcing Countries

In response to growing CII member interest in the issue of counterfeiting, RT-264 investigated and has made recommendations on product integrity concerns from low-cost sourcing countries. Data were collected from face-to-face interviews, as well as photographic and documentary evidence. Interviews with industry and government leaders were conducted in China, Taiwan, Hong Kong, Pakistan, UK, Canada, and the United States. The team’s efforts focused on knock-off branded industrial materials and equipment, as well as non-branded raw materials or commodity items.

As of 2003, the total value of all counterfeit products marketed in the world was estimated to be $1 trillion annually. In 2003, U.S. Customs seized $94 million in counterfeit products and goods at ports of entry into the U.S.

This research revealed a fundamental need for a controlled supply chain, including supplier pre-qualification, manufacturer surveillance, resident inspection, third-party verification, and unscheduled in-process inspections.