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Counterfeit
Imports: Big Business
By
Frances Allday
In these economic times, everyone is looking for
bargains. So to accommodate customers and increase sales, many large
retail stores offer discounted prices and special offers. But many
consumers look to dollar stores and small discount stores with cheap
imported products to better fit their budgets. Although these stores can
offer big savings, the buyer should be aware that the products on the
shelves are often not what they appear to be.
Let's say that as the ultimate bargain hunter you
scour the super discount stores, dollar stores and flea markets. You
purchase a Louis Vuitton handbag for less than $100 and a pair of Nike
athletic shoes for just $25. At a flea market you buy a carton of Marlboro
Lights cigarettes for $5 and a pair of Christian Dior sunglasses for $10.
To top off your bargain hunting you stop by a dollar store and get Colgate
toothpaste for .99 and an ac/dc power adapter and extension cord with the
Underwriters Laboratories (UL) label for two dollars. You consider your
day of bargain shopping a success, but in reality there were no bargains -
only the scams of counterfeiters.
Every year millions of dollars of fake and
counterfeit products are imported into the U.S. and find their way to the
shelves of local retailers. By illegally copying and using patents,
trademarks, and copyrights, producers of these pirated goods violate the
intellectual property rights of U.S. businesses as well as threaten the
health and safety of consumers. Trade in these illegitimate products is
often associated with smuggling and other criminal activities, and could
even be a source of funding for terrorists and rogue nations. The flood of
counterfeit products into our domestic market results in millions of
dollars of lost sales by U.S. businesses as fakes displace products
otherwise protected by trademarks and copyrights.
Let's take a look at the products you purchased on your
bargain hunting spree. The Louis Vuitton handbag sold at such a low price
was most likely a fake, and could have been smuggled by someone crossing
the U.S. border. In one such case, U.S. Customs and Border Protection
officers discovered 23 women's handbags in a vehicle at a border crossing
near El Paso. The female driver stated she had nothing to declare from
Mexico until an inspection of the car revealed the handbags. The
trademarks on the bags said Coach, Dooney and Burk, Gucci, Dolce Gabbana,
Guess, and ESQ. Suspecting counterfeits, the officers took photos of the
handbags and sent them to the registered trademark owners who confirmed
that the handbags were indeed counterfeit. The bags were seized as
contraband.
What about that cheap pair of Nike shoes? They
were probably similar to the 8,000 pairs of Nike shoes seized by U.S.
Customs at the port of Oakland this year. The shoes, valued at over a
million dollars at retail, were determined to be counterfeit and were
falsely described as figurines on shipping documents.
This year a large quantity of counterfeit
cigarettes was seized at the port of Los Angeles with an estimated
domestic value of more than $1.3 million. Customs officers discovered the
cigarettes hidden behind cartons of paper napkins in a container arriving
from China. The inventory revealed a total of 49,780 cartons of suspected
counterfeit Marlboro and Marlboro Lights cigarettes. Lab analysis
confirmed the cigarettes were not manufactured by Philip Morris USA or any
of its foreign affiliates or licensees. In the past Federal agents have
traced contraband cigarette trafficking to terrorists, and have
intensified efforts to cut off this source of funding. They say that
illicit cigarette trafficking equals drug trafficking as the method of
choice to fill the bank accounts of terrorists.
The tube of Colgate toothpaste you purchased for
.99 could be some of the tainted product from China which was not removed
the shelf. Last year the Food and Drug Administration announced that
counterfeit toothpaste with the Colgate label was found to contain
Diethylene Glycol, used in some antifreeze products. The agency urged
consumers to "avoid counterfeits and support regulators in their
efforts to remove these products from the marketplace."
The cheap ac/dc adaptor and extension cord you
bought had the UL label, so you may have assumed it was safe. However, the
Underwriters Labortory and the Consumer Product Safety Commission have
conducted numerous joint investigations to identify products that have
counterfeit UL labels. Two years ago 600,000 extension cords from China
were recalled by the CPSC because substandard insulation made them a shock
hazard.
Counterfeit goods not only affect U.S. businesses
but the military as well. Fake microchips have found their way into Air
Force flight computers and other military computer programs. Hundreds of
counterfeit computer routers from China were sold to the Army, Navy and
Marines over the past four years. These have the potential for accidents
as well as espionage.
According to Dept.of Homeland Security statistics
for 2007, China was the country of origin for 80% of the counterfeit goods
seized. Hong Kong was a distant second, with a 6% total. Footwear and
wearing apparel were the two most seized goods for counterfeit violations.
Handbags and electronics were the next two most counterfeited items.
What can be done about preventing counterfeiting? One
thing businesses can do is record their trademarks and copyrights with
Customs and Border Protection, making information readily available for
the monitoring of shipments. Consumers need to stay informed on product
recalls and avoid buying counterfeit merchandise. For its part the U.S.
government has undertaken a joint enforcement operation with the European
Union to stop the international flow of illicit goods. In this regard the
Dept. of Homeland Security has established the National Intellectual
Property Rights Coordination Center whose strategy is "not only to
keep unsafe products out of the United States but to identify and
dismantle criminal organizations behind the activity."
Frances Allday was a specialist in commercial trade
with U.S. Customs and Border Protection for 25 years
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