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| An Icom hand-held radio. Images of one exploded device showed labels bearing the name of the Osaka-based company. PHOTO: REUTERS |
Experts indicate that while the supply chains and distribution networks for high-margin, modern products are closely monitored, the same cannot be said for older electronics sourced from Asia. In this sector, issues such as counterfeiting, excess inventory, and intricate contract manufacturing arrangements can obscure the origins of products.
The reactions from the companies linked to the explosive devices that resulted in 37 fatalities and approximately 3,000 injuries in Lebanon this week highlight the challenges in determining how and when these gadgets were weaponized.
Gold Apollo, a Taiwan-based company, has attributed the issue to a European licensee of its pager, prompting investigations in Hungary, Bulgaria, Norway, and Romania to trace the origins of the lethal device. Meanwhile, Japan's Icom has stated it cannot verify the authenticity of the walkie-talkies that carry its brand, given the prevalence of counterfeit items in the market.
David Fincher, a technologist and consultant based in China, remarked, "If the supply chain was compromised to incorporate explosives, that would require remarkable engineering. However, compromising the supply chain itself is relatively straightforward. In fact, the supply chain compromise is likely the simplest aspect of this situation." He noted that counterfeit products are widespread, particularly in major manufacturing hubs like China, where fake components can be easily fabricated, suggesting that transitioning from counterfeit components to a compromised supply chain is not a significant leap.
As a technologist, I can confidently state that creating an explosive device within a radio is relatively straightforward.
Hezbollah reportedly obtained the devices approximately five months ago, according to a security source, who mentioned that the armed group believed it was purchasing the pagers from Gold Apollo.
The handheld radios, which the source indicated were acquired around the same time as the pagers, bore labels from Osaka-based Icom and included the phrase "Made in Japan," as evidenced by images of one of the exploded devices.
Both companies have dismissed the possibility that any of the lethal components originated from their manufacturing facilities in either of their respective countries.
Taiwan's Economy Minister Kuo Jyh-huei has also confirmed that the components used in the pagers that exploded in Lebanon were not produced in Taiwan.
A preliminary investigation conducted by Lebanese authorities revealed that the explosives were integrated into the devices prior to their arrival in the country, as stated in a letter to the U.N. Security Council from Lebanon's mission to the United Nations.
COUNTERFEIT ISSUES
However, at this point, that is the extent of the certainties. The specifics regarding how or when the pagers and walkie-talkies were modified for remote detonation remain unclear.
Joe Simone, a partner at the Chinese intellectual property firm East IP, noted that one of the challenges is that smaller brands often invest less in combating counterfeiting, primarily due to the costs that could affect their profitability.
"Authorities are generally more willing to address low-tech counterfeits, but intellectual property owners must actively monitor, investigate, and file complaints, which does not always occur as frequently as it does for larger, high-tech brands," he explained.
For Icom, a significant issue is that it ceased production of the IC-V82 model in question a decade ago, around the time it began implementing holographic stickers as a safeguard against counterfeit products, according to the company.
The company has consistently raised concerns regarding counterfeit products, particularly those related to its older models.
According to the most recent report from the Japan Patent Office, over 7% of businesses in Japan experienced financial losses due to counterfeit goods in 2020, with approximately one-third of these incidents associated with China.
Icom has advised customers to exclusively utilize its official distributor network to guarantee the authenticity of their purchases.
However, in China, numerous retailers are offering Icom-branded walkie-talkies on e-commerce platforms like Alibaba.com, Taobao, JD.com, and Pinduoduo, including instances of the IC-V82 model, as verified by Reuters.
Among three vendors based in China selling Icom products on Alibaba.com, none were recognized as official distributors on Icom's website. Guangzhou Minxing Communications Equipment Co and Chengdu Bingxin Technology Co Ltd both claimed to sell genuine products, while Quanzhou Yitian Trading Co admitted to offering "Chinese made imitations" alongside original items.
Icom has stated that all its products are manufactured in its facilities in Japan. The company did not respond promptly to inquiries regarding Icom-branded items available on Chinese online platforms.
The discontinued IC-V82 model is also found in Vietnam on the e-commerce site Shopee, indicating a broad distribution of such products.
For Gold Apollo, which has licensed its brand to BAC based in Budapest, the supply chain has become a complex puzzle that authorities in various nations are currently attempting to unravel.
"The easy access to inexpensive, second-hand manufacturing equipment has enabled counterfeiters to produce not just individual components but entire products," noted Diganta Das from the University of Maryland's Center for Advanced Lifecycle Engineering, who specializes in counterfeit electronics.
"I wouldn't call it counterfeiting anymore, it's like illegal manufacturing," Das said.