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TRADE WARS
US vows to 'vigorously' combat trade secrets theft
by Staff Writers
Washington (AFP) Feb 20, 2013


In sting, US catches China with fingers in honey jar
Washington (AFP) Feb 20, 2013 - Call it a case of honey laundering.

US officials said Wednesday they had mounted a sting operation against two major firms illegally importing honey from China and selling it on the American market, avoiding $180 million in anti-dumping duties.

US Immigration and Customs Enforcement (ICE) described the bust as "one of the largest criminal anti-dumping cases in history."

The offence involved Chinese honey either being mis-declared as another commodity or trans-shipped through other countries such as India, Russia and Thailand to avoid trade duties.

Five people have been arrested and charged and the two firms, Honey Holding of Texas and Groeb Farms of Michigan, agreed to pay fines of $1 million and $2 million respectively.

Washington was abuzz with news of the bust, and lawmakers could not resist the urge to spread the puns on thick.

"This successful sting operation is sure to be a buzz kill for would-be honey smugglers," US Senator Charles Schumer said in a statement.

"For too long, foreign smuggling of this product has created a sticky situation for domestic honey producers. We need a zero-tolerance policy when it comes to honey laundering."

ICE deputy director Daniel Ragsdale, who announced the results of what he dubbed "Project Honeygate", deployed a less successful metaphor, warning cryptically: "Honey is just the tip of the iceberg."

"Schemes like this result in legitimate importers and the domestic honey-producing industry enduring years of unprofitable operations, with some even being put out of business," he said.

Dozens of other commodities imported into the United States under false descriptions or orgins, authorities said, costing the US taxpayer billions of dollars in lost import duties.

Ragsdale was quick to insist there was "no health and safety risk" despite some of the 4,900 barrels of seized honey being adulterated with antibiotics not approved by the US Food and Drug Administration.

Honey is often filtered to remove bee pollen, which can be used to trace the honey's origin.

The operation was the second phase of a broad investigation that began in 2008 and resulted in earlier charges of 14 persons.

Ragsdale said authorities from China and other countries had cooperated with US agents in the case, but did not go into details.

US honey producers cheered the Project Honeygate case.

"We as an industry have been working hard to get customs to crack down," George Hansen, who heads the American Beekeeping Federation, told AFP.

"But every time they close one avenue, the cheaters find another way."

US honey production has been in steady decline, thanks to rising costs and a condition known as colony collapse disorder, in which bees from a hive suddenly disappear.

The phenomenon is a growing concern for beekeepers and farmers. About one third of the global food supply is dependent directly or indirectly on crop pollination by honey bees, according to the FDA.

The United States is a net honey importer, with two-thirds of honey consumed in the country last year coming from other countries, Hansen said.

The US government vowed to aggressively combat a rise in the foreign theft of trade secrets Wednesday amid mounting concerns over recent hacking attacks allegedly emanating from China.

A new strategy document released by the White House did not explicitly name China, but warned that foreign governments and firms had stepped up efforts to obtain such material, threatening US economic and national security.

"We will continue to act vigorously to combat the theft of US trade secrets that could be used by foreign companies or foreign governments to gain an unfair economic edge," the strategy document says.

Such "theft threatens American businesses, undermines national security, and places the security of the US economy in jeopardy," it said, putting "American jobs at risk."

The White House vowed to "apply sustained and coordinated diplomatic pressure on other countries to discourage trade secret theft."

The strategy was made public a day after a report by American Internet security firm Mandiant said that a Chinese military cyberspy unit is targeting US and other foreign firms and organizations with hacking attacks.

A White House official said that the new strategy "is not focused on any one country, nor is it focused on cybersecurity exclusively, though cyber does play an important role in the strategy."

The plan was unveiled at an event attended by US Attorney General Eric Holder, who said the protection of intellectual property and trade secrets was a "top priority" of the administration.

"Particularly in this time of economic recovery, this work is more important than it ever has been before," Holder said.

"The stakes have never really been higher. In some industries a single trade secret can be worth millions or even billions -- billions -- of dollars."

The strategy calls for greater coordination among different government agencies, for the private sector to be better informed about the risk of trade secrets theft and for stepping up intelligence and law enforcement efforts.

Under Secretary of State Robert Hormats emphasized that China was not the only offender, but said intellectual property and trade secrets remain a "serious and troubling issue" in relations between the two largest economies.

"That's why cyber security and the protection of IPR (Intellectual Property Rights) and trade secrets are among the main items that we have discussed with the Chinese over the years," he said at the unveiling event.

China has denied charges of state-sponsored hacking and said Mandiant's claims had "no factual basis."

The latest cyber security scare has seen firms, including the New York Times and the Wall Street Journal, report attacks believed to emanate from China, and comes amid mounting concern over hacking as a military threat.

The latest classified National Intelligence Estimate identified China as the country most aggressively seeking to penetrate the computer systems of US businesses and institutions, the Washington Post reported this month.

The document, according to the Post, identifies energy, finance, information technology, aerospace and automotive companies as the most frequent targets of cyberattacks.

Outside experts have estimated the damage to the US economy in the tens of billions of dollars, the paper said.

In October, Defense Secretary Leon Panetta sounded the alarm about a growing threat of Internet attacks, warning of a "cyber-Pearl Harbor" and saying the military had amended its rules of engagement.

A Senate cybersecurity bill backed by President Barack Obama failed to pass twice last year, with civil liberties groups expressing concerns about privacy and Republicans fearing new regulations and an expanded bureaucracy.

In response, the White House said it would consider executive action to strengthen cybersecurity, and Obama returned to that theme in his State of the Union address.

"We cannot look back years from now and wonder why we did nothing in the face of real threats to our security and our economy," he said.

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