IMPORT INDUSTRY PLAGUED BY COUNTERFEIT MERCHANDISE
Some importers and manufacturers have launched a full-scale assault against producers of counterfeit merchandise, but the majority in the industry have been slow to respond to the problem, said Timothy P. Trainer, president of the International AntiCounterfeiting Coalition at a joint press conference with U.S. Customs in Washington Thursday.
“The proliferation of counterfeiting operations has resulted in markets being flooded with dangerous products worldwide. In particular, these products are endangering Americans and costing us both jobs and lost tax revenues,” Trainer said. “Furthermore, the revenues generated by counterfeits are being used by drug traffickers, terrorists and organized crime groups to finance their operations.”
The IACC is the largest international group devoted to fighting product counterfeiting and piracy. The coalition’s 150 members, which include companies such as Ford, Microsoft, Nokia, Chanel, Warner Bros., and Underwriters Laboratories, have combined annual revenues of more than $650 billion.
Some of the most common counterfeit products are watches, wearing apparel, handbags, video cassettes, sunglasses, electronics and computer software. On a lesser, but more dangerous scale, counterfeit airplane and auto parts, children’s toys, birth control pills, hair care products, infant formula, medical equipment and pharmaceuticals have been sold on the market.
The IACC estimates the United States loses more than $200 billion a year to counterfeiters. Worldwide, 5 to 7 percent of trade, or about $350 billion, is counterfeit goods, according to the International Chamber of Commerce. “It’s a global issue, not just a U.S. issue,” Trainer said.
Counterfeit goods come from both the United States and abroad. Some of the hubs for this activity are New York, New Jersey, Florida, Los Angeles, Taiwan, China, Korea, Russia, and Mexico.
The coalition works closely with U.S. Customs’ National Intellectual Property Rights Coordination Center (IPR) in Washington to stop counterfeiters.
“These are criminals masquerading as legitimate businessmen,” said Stuart Seidel, assistant commissioner for Customs’ Office of Regulations and Rulings. “As the global economy becomes more service- and idea-based, their turf is no longer the back alleys but the world market place.”
Since 1998, Customs has made more than 10,300 seizures, or $220 million worth of counterfeit goods. The agency also works with other federal, state and local law enforcement agencies to track counterfeiting activities. Customs recently seized about 40,000 imported counterfeit watches in Los Angeles valued at about $36 million.
The agency realizes the number of seizures so far is the tip of the iceberg. Customs only inspects about 2 percent of containers that enter the country each year, and counterfeit products could easily hide behind false cargo descriptions, origin declarations and commercial invoices. That’s why the IACC believes that industry should work closely with Customs and other federal agencies to stop product counterfeiting.
The IACC plans to continue educating and training overseas customs agencies, importers and manufacturers about counterfeit products. “It’s not just a stick approach,” Trainer said.