CBP officers and import specialists at the Los Angeles/Long Beach Seaport complex made a significant intellectual property enforcement action between June and September of this year, seizing more than 16,000 counterfeit Hermes handbags across nine separate shipments. We have discussed trademark enforcement and gray market goods previously in our article on Trademark Infringement: Importing Gray Market Goods and Seizure by Customs — this case adds a useful illustration of how deliberate counterfeit importation operations actually work and how CBP detects them.
What CBP Found — and What the Numbers Mean
Over a roughly three-and-a-half month enforcement period, CBP officers seized 16,053 counterfeit Hermes handbags arriving in nine container shipments, eight directly from China and one routed through Hong Kong. Five different importers were behind the shipments, with most destined for the greater Los Angeles area and one heading to Texas.
The value figures tell the story of why counterfeit luxury goods remain such an attractive criminal enterprise. The actual domestic value of the seized merchandise — what the counterfeits might actually sell for on the street — was approximately $295,665. The manufacturer’s suggested retail price of the same number of genuine Hermes handbags would have been $210,785,475. That gap — nearly $211 million in retail value generated from goods with a fraction of the production cost — illustrates the profit margin that makes counterfeit luxury goods one of the most lucrative categories of intellectual property crime globally.
The Concealment Detail — Why This Was Not an Innocent Mistake
The release notes that two of the nine shipments had the counterfeit handbags hidden in the nose of the shipping containers — the front section, furthest from the doors — with legitimate, non-infringing merchandise stacked behind them to present a clean face to any inspector opening the container from the rear. That concealment method is deliberate and specific. It requires knowledge of how container examinations are typically conducted and a calculated effort to position the contraband where it is least likely to be discovered during a standard inspection.
This detail matters legally. The CBP release describes the bags only as being “in violation of the Hermes protected trademark” without specifying exactly how — whether the marks were identical counterfeits, close imitations, or otherwise infringing. But concealing the bags behind legitimate merchandise in the nose of a container removes any possibility of an innocent-mistake defense. An inexperienced importer who unknowingly purchased counterfeit goods does not hide them from CBP inspectors. The concealment is direct evidence of intent — the importers knew the goods were counterfeit and took active steps to prevent discovery.
What Happens to the Importers Now
The seizure and destruction of the merchandise is only the beginning of the legal exposure for the five importers involved. Once CBP perfects the forfeiture of the counterfeit goods, the FP&F office will issue separate notices of penalty under 19 U.S.C. § 1526 — the statute governing civil penalties for importing merchandise bearing counterfeit marks. For a first violation, the penalty can reach the domestic value of the merchandise as if the goods were genuine — meaning each importer could face a penalty based on the authentic Hermes retail value of their share of the 16,053 bags. Given the MSRP figures involved, that exposure is potentially enormous.
Beyond CBP’s enforcement action, Hermes retains independent civil remedies. A federal trademark infringement lawsuit can seek statutory damages of up to $2,000,000 per counterfeit mark per type of goods — a ceiling that makes even a fraction of the seized merchandise potentially ruinous for the importers involved. Major luxury brands actively monitor CBP seizure records and pursue importers who traffic in counterfeits of their marks. The notice of penalty from CBP may arrive first, but a civil lawsuit from Hermes is a distinct and serious additional risk.
The Broader Enforcement Picture
CBP seized approximately $1.26 billion worth of counterfeit goods originating overseas in 2012. China was the dominant source — and remains so — with handbags and wallets comprising the largest single category by value, up 142% from the prior year. Of the roughly $511 million in counterfeit handbags and wallets seized nationally, more than $446 million came from China alone. The Hermes seizure in this case fits precisely within that pattern: nine shipments from China, concealed within legitimate cargo, targeting the U.S. luxury goods market.
CBP’s IPR enforcement program uses a combination of targeting intelligence, import specialist expertise, and physical examination to identify counterfeit shipments. The training and experience of import specialists — who are familiar with the quality markers, hardware, stitching patterns, and label characteristics of genuine luxury goods — is what allows CBP to identify counterfeits that might otherwise pass through as legitimate merchandise. The concealment in the nose of the containers suggests the importers anticipated this expertise and tried to defeat it through physical positioning rather than quality of the fakes.
Facing a CBP Penalty for Imported Goods?
If you have received a notice of penalty from CBP related to imported merchandise — whether for trademark violations, counterfeit goods, or any other customs law violation — contact us immediately. The penalty process has deadlines that, if missed, foreclose your best options for reduction. Great Lakes Customs Law handles customs penalty defense and petition filings nationwide. Call us at (734) 855-4999, send a text message, or reach us on WhatsApp. You can also contact us online.