INTERNATIONAL CUSTOMS DAY
Global trade in counterfeit goods is booming
January 26, 2007
By Leonard Radebe
The international trade in counterfeit goods is growing at an alarming rate and, according to the International Chamber of Commerce, is worth $650 billion (R4.6 trillion).
Counterfeiting and piracy are two of the most serious crimes perpetrated by economic saboteurs and health terrorists.
According to the World Customs Organisation (WCO), which groups 170 customs administrations who collectively administer 98 percent of international trade, counterfeiting and piracy account for about 7 percent of global commerce.
While globalisation has resulted in the lowering of international barriers, it has also created new opportunities for illegal trade.
Counterfeit and pirated goods are now produced on an industrial scale. According to research by the European Commission, the trade in some counterfeit goods is more profitable than drug trafficking.
The same smuggling and concealment techniques used in drug trafficking are employed as well as a range of diversion tactics to obscure the origin and destination of counterfeit and pirated goods.
In 2004, the WCO reported more than 4 000 seizures involving about 166 million goods that were either counterfeit or pirated.
It estimates that 43 percent of available computer software is pirated. More than 2 500 seizures were made during the 2006 soccer World Cup alone.
Last year, SA Revenue Service (Sars) customs seized counterfeit goods bearing the 2010 soccer World Cup logo, four years before the tournament gets under way.
The risks are not merely economic as counterfeiters have no regard for putting human lives at risk as about 30 percent of medication in the emerging nations is fake.
The World Health Organisation says the figure may be as high as 50 percent in some countries.
Fake meningitis vaccines killed 2 500 people in Niger, counterfeit cough syrup killed 89 people in Haiti and fake antimalarial tablets killed 30 people in Cambodia.
The range of counterfeit medical products includes pregnancy tests kits, condoms, antibiotics, anticholesterol tablets and HIV testing kits.
In one case, the EU seized cardiovascular medication containing a mixture of brick dust and the yellow paint used to mark roads covered in a layer of varnish.
The US Centres for Disease Control and Prevention estimates that by 2010, annual global counterfeit medication sales will be $75 billion.
Being part of an increasingly globalised economy, South Africa is not immune to the counterfeit trade.
Seizures of counterfeit goods by Sars increased by 46 percent from 2004/05, when goods worth R235 million were seized, to 2005/06, which netted merchandise worth R540 million.
The seized goods included DVDs, CDs, clothing, footwear, cellphone accessories, motor vehicle parts and cosmetics.
Luxury items are no longer the main focus of counterfeiters, with technology products, cigarettes and cigars, cosmetics, medication and household items joining the list.
The high quality of some fakes often makes identification impossible without technical expertise. The counterfeit goods market responds to a powerful force of demand: consumers can buy an item for a fraction of the retail price.
We are all quite familiar with those ubiquitous DVDs and CDs available on street corners, flea markets and even seemingly reputable establishments.
While many people may be aware of "very competitively priced" vehicle parts, accessories such as watches, cosmetics and designer clothing, they are in the dark when it comes to medication such as the fake Viagra, which has been seized in many countries around the world, including South Africa.
Perhaps some people even feel that the counterfeit trade poses no harm, so why the fuss?
Piracy is tantamount to theft and is therefore against the law. It is a criminal act to obtain, make, distribute, import or export such goods and, of course, equally worse to sell and buy them.
The law is there to benefit and protect the individual - the fight against counterfeiting and piracy is about personal health and safety.
The trade in counterfeit and pirated goods is a global scourge that seriously negates the research and development efforts of manufacturers, fair trade, commercial competition and the security of employment in many sectors of the world economy.
Then there are the organised crime networks and syndicates that have turned the trade in counterfeit and pirated goods into a global phenomenon. These networks are multifaceted and, to them, counterfeiting has become a major source of income.
The money individuals spend on that "inexpensive" blockbuster movie will eventually finance such activities as money laundering, human trafficking, narcotics, and illegal weapons trade and international terrorism.
Within the context of globalisation, the customs administrations have had to reassert their role in fighting illegal trade in counterfeit and pirated goods.
Customs authorities are responsible for controlling the movement of goods across borders and to protect economies and societies from unfair trade, and trade in illegal and dangerous goods.
The WCO provides its members with a global customs co-operation network to identify the cross-border movement of high-risk goods and to undertake joint action to stamp out the illegal trade in fake goods.
Strategies have been developed to advance international co-operation such as the electronic customs enforcement network, regional intelligence liaison offices, and sophisticated risk management and targeting instruments.
Sars is also realigning itself to effectively tackle the illegal trade by strengthening customs co-operation throughout the region with key trading partners and stakeholders as well as focused enforcement activities.
Plans are under way to strengthen Sars's legal powers to take action and to sharpen its ability to detect illicit goods.
The organisation is in the process of creating a new customs border control unit that will greatly enhance existing antismuggling activities. Dedicated customs intellectual property rights teams are already operating at major ports of entry.
Today, WCO member states celebrate international customs day. South Africa is part of the global offensive against the illicit trade and smuggling of counterfeit goods.
There is international consensus that illicit trade flourishes because of consumer demand. Without the consumer, the market would not survive.
The message from 170 global customs administrations is: "Just say no to counterfeit and pirate goods."
Leonard Radebe is the Sars deputy chief operations officer and the head of customs
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