Page:Special 301 Report 2015.pdf/20

 instance, in China, some domestic chemical manufacturers that produce API have avoided regulatory oversight by failing to declare that the chemicals are intended for use in pharmaceutical products. This practice serves as a contributing factor to China's status as a major source country for harmful APIs used in counterfeit pharmaceutical products. In a welcome initial step to address this shared concern, in 2014, China committed to develop amendments which provide enhanced regulatory control over manufacturers of bulk chemicals that can be used as API.

This year USTR heard from several stakeholders that noted increasing concerns regarding the large number of counterfeit goods entering sub-Saharan Africa from China and other source countries. Key ports in Kenya, Nigeria, and South Africa serve as entry points for counterfeit goods into the continent's distribution channels. These counterfeit goods can endanger lives, displace legitimate products, and adversely affect opportunities for legitimate economic growth. Counterfeit goods flooding sub-Saharan Africa's markets include, but are not limited to, medicines, automotive parts, and electronics. Such products pose serious health and safety dangers to individuals and communities. The lack of resources and other challenges make enforcement particularly difficult in this region.

Kenya and Nigeria are the largest markets in East Africa and West Africa, respectively, and face many serious enforcement challenges resulting from this trend. In Kenya, despite a robust legal framework supporting IPR enforcement, agencies with a positive track record of effectiveness, such as the Kenyan Anti-Counterfeiting Agency and Kenyan Revenue Authority, have experienced significant resource cuts. Minimum penalties for IPR infringement, clear sentencing guidelines, and adequate staffing and resources are critical tools for Kenyan authorities to operate effectively. Nigeria has some of the largest and most notorious markets for counterfeit goods in Africa, including several in Lagos State. (See 2014 Notorious Markets List, available at www.ustr.gov).

The United States lauds measures previously taken against counterfeit products and those underway throughout sub-Saharan Africa against trade in such goods. The United States supports measures taken in the region to address these issues. However, it is imperative that source-country governments enhance their enforcement against such exports in support of sub-Saharan African governments, such as Kenya and Nigeria, that are working to combat this serious challenge. 15