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September, 2017

Are US electronics recyclers aiding Chinese counterfeiters?

Original article: Huntington News

The Basel Action Network (BAN), an NGO that aims to curb the misuse of toxic waste from technology, has found that recycling companies in the US continue to export hazardous e-waste to Asia. Once the electronics waste arrives in Asia, criminals often strip useful components from it and install them in counterfeit electronics devices. 


In a new report, BAN notes that it used GPS tracking technology embedded in electronics waste to track its journey. The NGO discovered that one printer and 15 LCD screens containing toxic mercury were sent to Hong Kong, mainland China, and the Philippines. 


US law does not prohibit the exportation of hazardous electronics wastes to Asia. However, according to BAN, to do so does violate international law (Basel Convention) and the laws of the importing countries. BAN adds that "the exports also violate the companies' own stated policies declared on their websites making these companies vulnerable to fraud charges."

Analysis:

BAN has found that much of the hazardous e-waste exported from the United States ends up in Hong Kong's New Territories. All of the PRC's territory has an import ban on hazardous e-waste, but Hong Kong doesn't appear to be enforcing it. 


Investigators from the organization say that the New Territories contain hundreds of e-waste junkyards. Hazardous equipment is disassembled by hand, exposing workers to toxins in mercury-laden dust. 


For BAN and Hong Kong, this is primarily an environmental and health issue. For brands and the U.S. government, it's also a counterfeiting problem. In an April 2016 report by the South China Morning Post, Hong Kong politician Andrew Wan Siu-kin was quoted as saying that he suspected two locations in the New Territories were being used as sites to "process" e-waste: a wetland park in Sheung Pak Nai, Tin Shui Wai and area zoned for “recreation and farming” at Hung Shui Kiu near Lau Fau Shan.


Indeed, e-waste from the U.S. is a major contributor to counterfeit integrated circuits. Counterfeiters remove the ICs from trashed computers, refurbish them, and sell them as new to electronics manufacturers. TIPG has reported several times in the past few months on how the integrity of U.S. defense equipment is compromised by fake semiconductors.


Kerry Bernstein, a program manager at the Pentagon's Defense Advanced Research Projects Agency (DARPA), told The Scientific American in April that “The net of the thing is that we don’t have as much control over the authenticity and integrity of the systems we use. The counterfeit problem appears at first glance to be intractable.”


However, DARPA is working to develop a verification system for microchips. The system comprises of microscopic identification tags called “dielets” that genuine IC makers can embed in their chips as they assemble them. Thanks to the dielets, firms that install the microchips in circuit boards and other components will be able to verify the authenticity of the ICs.

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