November 29, 2018 Most organizations have come to realize the potential for a data breach if data-bearing assets aren’t properly handled at end-of-life. And many also know there will be negative repercussions if their non-functioning computers are found illegally dumped in a far-away land being dismantled by children. But did you know that sending your assets to an uncertified processor – or one you’ve not properly vetted for downstream recycling policies and practices – can potentially endanger national security? In May of this year the owner of a California company that distributed obsolete components and excess inventory was arrested and charged with dealing in counterfeit electronics components. The chips, imported from China, had been harvested from non-functioning electronic equipment then repainted and remarked with counterfeit logos, ID numbers, and date codes. Charges included trafficking counterfeit military goods. This was because these salvaged chips masquerading as new might end up in missile defense systems and other critical military infrastructure hardware like satellites. According to the March 2018 Department of Defense (DoD) Annual Industrial Capabilities report to Congress: “Counterfeit parts have the potential to delay missions and ultimately endanger service members. An increasingly globalized electronics industry increases the risk that these parts will enter the Department supply chain.” They could also find their way into equipment critical to other parts of our national infrastructure, compromising equipment in the energy, telecommunications, and transportation sectors. One of the potential sources for these counterfeit goods was called out in a recent report to the United States Senate published by the Committee on Armed Services in the United States. In a classic case of “we have met the enemy and he is us,” the report found that the parts were being harvested from discarded electronic equipment shipped overseas from the United States. So how do we fix this? In light of the continuing danger to the integrity of the domestic and military supply chain, attention has increasingly turned to choking off the supply of the raw materials counterfeiters need to create their fake electronic parts by regulating exports. The Bureau of Industry and Security (BIS), which falls under the Department of Commerce, is currently seeking public comment on a proposed regulatory change that would prohibit the export of retired electronic equipment from the United States unless certain conditions are met. Other than devices under a formal recall notice, the only assets that could be exported would be those that had cleared testing to prove they were being exported for reuse. Further, that reuse would need to be for the originally designed purpose of the device. Materials that were exported as feedstock would also be permitted providing that material didn’t require further disassembly before processing. An example of this might be separated aluminum scrap exported to a foreign smelter, providing the receiving country permitted the material to be imported. The BIS is also seeking comment on new reporting and record-keeping requirements to ensure exports of “exempt” electronics material are, in fact, legal to export. For example, exporters would likely be required to keep documentation on all electronics and be able to show how the devices met the criteria for exemption including, but not limited to, what methodology was used for testing and the test results for each item. Ingram Micro ITAD welcomes these proposed changes. By virtue of our e-Stewards and other certifications, it is highly likely that we – and our downstream recycling partners – already meet the proposed new requirements. As an e-Stewards certified recycler, responsible export practices and end-to-end accountability for all materials is already part of our DNA. Plus, since we’re already known for our robust asset management, tracking, and reporting system, we’re confident we already have the capability to quickly incorporate any new details that may be required under the revised export rules. We encourage you to follow the progress of these proposed regulations know that Ingram Micro ITAD is available to ensure your assets are handled in full compliance with this and any other laws, rules, and regulations as they evolve. National security is important to all of us, so let’s work together to ensure we’re all part of the solution.
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National Security: This Time It’s Not About Data
Stephen Tong 2018-11-29