May 22, 2012

Counterfeits in U.S. military equipment, China criticized

China is the dominant source of counterfeits that end up in the U.S. defense supply chain according to a new report by a Senate Committee investigating the matter.

The Committee on Armed Services released its report on the investigation into counterfeit electronic parts in the defense supply chain yesterday, saying 70 percent of the over 1 million suspect electronic parts found from 2009 to 2010 originated from China. The UK and and Canada were the next highest suppliers of suspect parts.

The probe found 1800 cases of fake parts in military aircraft. SH-60B helicopters used by the Navy, in C-130J and C-27J cargo planes and in the Navy's P-8A Poseidon plane were cited as examples of the equipment affected by counterfeits.

The report criticized China for failing to address the issue of counterfeit parts, saying that counterfeits were sold openly in public markets.

“One Committee witness described visiting China and seeing public sidewalks covered with electronic components that had been harvested from e-waste,” the report said. “Another witness said that he saw whole factories in China of 10,000 to 15,000 people set up for the purpose of counterfeiting”.

Committee members had denied Visas to mainland China to investigate the matter the report said.

The report also argued that the defense industry's reliance on independent distributors to supply electronic parts for military applications resulted in unacceptable risks. The committee said that in the 1800 cases of suspect parts found in the supply chain, 650 companies were involved, making it difficult to track the source of parts.
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