After a year long probe, the Senate Armed Services Committee said in a report that it had uncovered 1800 cases of fake parts used in military hardware mostly helicopters and aircraft. The report highlighted that counterfeit parts may have been used in SH-60B helicopters used by Navy SEALS, C-130J and C-27J cargo planes and in the navy`s P8A Poseidon`s`.
The report could be alarming for India as it has purchased C-130J transport aircraft for the air force and P8A Poseidon surveillance aircraft for the Navy, in direct military-to-military sales. However, it was not clear from the report whether hardware sold to India had any counterfeit products made in China.
More than 70 per cent of an estimated one million suspect parts were traced back to China. "Our report outlines how this flood of counterfeit parts, overwhelmingly from China, threatens national security, the safety of our troops and American jobs," Senator Carl Levin, Chairman of the powerful Senate Armed Services Committee said in a statement as he released the report running into 72 pages.
"Our committee`s report makes it abundantly clear that vulnerabilities throughout the defense supply chain allow counterfeit electronic parts to infiltrate critical US military systems, risking our security and the lives of the men and women who protect it," Ranking Member of the Committee Sen John McCain said.
The Committee criticized China for failing to shut down counterfeit manufacturers. "Counterfeit electronic parts are sold openly in public markets in China," the report said. "Rather than acknowledging the problem and moving aggressively to shut down counterfeiters, the Chinese government has tried to avoid scrutiny," it added.
The affected parts in the C-130J and the Poseidons range from the chips in the display system of the Super Hercules to components of the detection systems in the P8A Poseidons. The report including conclusions and recommendations were adopted by the Senate Armed Services Committee with unanimous voice vote on May 15.
The committee said that China denied visas to its staff to travel to Beijing as part of the investigation.
While the investigation focused on the risk that counterfeit parts pose to US national security and the safety of military personnel, the rampant theft of US intellectual property also severely impacts the US economic security.
According to the Semiconductor Industry Association (SIA), counterfeits cost US semiconductor companies more than USD 7.5 billion annually in lost revenue, a figure SIA says results in the loss of nearly 11,000 American jobs.
The other two largest source of fake parts were the United Kingdom and Canada. The Committee identified instances in which both countries served as resale points for suspect counterfeit electronic parts from China. India accounted for about one per cent of the counterfeit products.
The investigation also uncovered dozens of examples of suspect counterfeit electronic parts in critical military systems, including on thermal weapons sights delivered to the Army, on mission computers for the Missile Defense Agency`s Terminal High Altitude Area Defense (THAAD) missile, and on a large number of military airplanes.