Call for ‘tidal wave’ against fake goods

Date: 11/09/03

By Peter Chapman

ROBERT Verrue, the European Commission's top customs policy official, has issued a plea to trade negotiators meeting in Cancún, Mexico this week to pledge to cut spiralling levels of counterfeit goods plaguing world trade.

Speaking exclusively to European Voice, the Frenchman said a recent EU initiative to boost the efficiency of border checks will only go so far to help stem trade in counterfeit goods ranging from Viagra to mobile phone batteries.

"The regulation is a very useful instrument for economic operators but we really need to think of launching a more 'tidal wave' reaction," said Verrue, who was a key figure in negotiations with US officials to agree a common system of port security.

"The Doha round and Cancún are the occasions. I would find it worrying if we did not come back from these [talks] with something." He said that both a strengthening of existing rules and a commitment from WTO members to apply them are necessary.

Until changes are made, Verrue insists current WTO rules on counterfeit and piracy "leave something to be desired".

One of the problems with the existing global regime is the onus it puts on members to check up on the origin of imports but not on exports leaving their territory.

The rules allow countries to pay less attention to counterfeit goods either produced on their territory or in transit to a final destination elsewhere in the world. That is a problem because smart manufacturers often ship fake goods via another country to help them conceal the origin. Experts say countries such as China are increasing their export checks because they realise the damage wholesale counterfeiting has on their image in the eyes of trade partners and investors.

Verrue's rallying cry comes as his department tallies up the latest figures for customs seizures at EU borders, ports and airports.

He says early indications are of another bumper haul during the first six months of 2003: "It is an exploding phenomenon."

This includes a remarkable increase in seizures by Belgian customs - which alone racked up nearly half the combined total for the whole of the EU in 2002. Examples of the haul include 43 container loads of fake 'Bey Blade' toys made in China and caseloads of counterfeit Ericsson mobile phone batteries. The trend, says Verrue, is towards an ever-growing scale of production - with gangsters and terrorists masterminding proceedings.

"It is clear that there are industries for counterfeit and fraud in many countries. The amount of goods that are counterfeited would not exist if they were produced in a garage."

Another pattern is the continued shift away from traditional fake designer goods to less glamorous items. These include food products, such as olive oil, toothbrushes, and 'Harry Potter' computer games.

But it is the market for fake drugs that worries Verrue most.

"We have antibiotics that are perfectly imitated. The problem is when labs take analyses, the properties of the drugs are not the same."

Verrue is very enthusiastic about the EU regulation, just approved by member states in record time.

He now wants finance ministers to follow-up this law with greater recognition that customs services in tomorrow's 25-member Union are in a key position at the crossroads between trade, economic crime and terrorism. That includes supporting a package of reforms to the EU's customs system.

"The natural reaction is to say that since it all has to do with controlling goods then it should be customs that deals with it. That is true but one must recognize that customs must be given both the task and the means [to do the job]."

The new regulation strengthens the hand of customs officials from the moment ten new member states join next year.

Rights holders will be able to take samples of counterfeit goods at borders to help them track down their provenance.

For the first time it will allow them to clamp down on goods abusing protected geographical indicators. That means litres of Armenian 'Cognac' can be stopped at the border - even if the offending words are written in Cyrillic. Imports of Russian labelled 'Parma ham' will face a similar fate.

"The economists will say that this is nothing but a natural reaction to over-regulation - we are provoking the emergence of substitutes. But always with arguments, you can put it upside down. We will simply not go back on the protection of quality and origin," says Verrue.