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Issues with Counterfeit Components

Counterfeit electronic components are becoming an increasingly prevalent problem throughout the electronics industry. The use of counterfeit parts can compromise the safety and performance of products which, for certain industries such as the medical, automotive, aerospace and defense industries, can be extremely damaging. In addition, the production, sale or distribution of counterfeit products violates the intellectual property rights of trademark owners and is illegal under anticounterfeiting legislations in most developed countries. Statutory penalties imposed on counterfeiters under these laws range from sizeable monetary damages in the millions of dollars to imprisonment.

At Broker Forum, we are concerned with the adverse impacts caused by counterfeit products on the electronics industry. Members of Broker Forum should be too. This Policy sets forth the measures taken by Broker Forum to help its Members and the electronic parts industry deal with this serious issue.

Definition of Counterfeit Components

The  generally accepted definition of a counterfeit electronic component is one whose material, performance, or characteristics are knowingly misrepresented by the vendor, supplier, distributor, or manufacturer. Examples include:

• Parts re-topped and/or remarked to disguise parts differing from those offered by the original part manufacturer
• Original parts that have been refurbished and represented as new parts
• Reversed-engineered parts
• Defective parts scrapped by the original part manufacturer
• Parts salvaged from scrapped assemblies and represented as new parts

Broker Forum is an online trading platform dedicated exclusively to brokers and distributors in the electronic components industry. However, we are not experts in evaluating whether a component is a counterfeit or an original, particularly given that we are not involved in the actual transaction between a buying Member and selling Member. We therefore need to rely on the component manufacturers and similar competent authorities to monitor the infiltration of counterfeit components into the supply chain. 

For that reason, Broker Forum will consider a component to be counterfeit when it receives confirmation in writing from the component’s original manufacturer or any competent authority or a recognized third party testing facility, that the component is, or is suspected by such authorities to be, a counterfeit.

Dealing with Counterfeit Components on Broker Forum

The terms and conditions of use of Broker Forum’s web site prohibit the sale and distribution of counterfeit electronic components.

Removing a Listed Item 

Any listed component shall be removed by Broker Forum when it is proven to be counterfeit.

Member Feedback and Mediation

A Member transacting with another Member through Broker Forum can use the Member Feedback feature as well as the Mediation feature available on the site to report incidents of counterfeit or suspected counterfeit transactions. Reported incidents of counterfeit and suspected counterfeit are documented and registered in our Counterfeit Incidents Report.

Counterfeit in Escrow Transaction 

A Member using our escrow services who suspects that he has received counterfeit components is permitted, and strongly encouraged, to reject the order by providing a confirmation in writing from the original component manufacturer, a competent authority or a recognized third party testing facility, that the component is, or is suspected by such authorities to be, a counterfeit. In such a case, the buying Member is urged to send the counterfeit components to the original manufacturer or competent authority for disposal. Such cases are also documented and registered in our Counterfeit Incidents Report. The detailed terms and conditions applicable to escrow transactions can be found in the Escrow Legal Agreement.

Suspension of Repeated Offenders 

Broker Forum is reluctant to take action against a Member who has unknowingly introduced counterfeit components into the market. However, Broker Forum will not tolerate patterns of illicit behavior or willful blindness from its Members. Therefore, a Member whose record shows more than three incidents of proven counterfeit transactions within any twelve (12) month period will see his membership cancelled indefinitely.