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FINDING AND COMBATING COUNTERFEITERS

FINDING AND COMBATING COUNTERFEITERS Polish Federation of Electrical Wholesalers 9 th MAY 2008 WARSAW Dave Dossett BEAMA - ACWG. FINDING AND COMBATING COUNTERFEITERS. POLITICAL PROGRESS ON THE GROUND WHAT YOU CAN DO. POLITICAL PROGRESS.

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FINDING AND COMBATING COUNTERFEITERS

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  1. FINDING AND COMBATING COUNTERFEITERS Polish Federation of Electrical Wholesalers9th MAY 2008WARSAWDave Dossett BEAMA - ACWG

  2. FINDING AND COMBATING COUNTERFEITERS • POLITICAL PROGRESS • ON THE GROUND • WHAT YOU CAN DO

  3. POLITICAL PROGRESS

  4. Organisation for Economic Cooperation and Development(OECD) Has recently issued a report on the Economic Impact of Counterfeiting and Piracy with a special chapter on the Electrical components sector

  5. Scope of Global Counterfeiting • The OECD concluded in a 2007 study that about 2% of world trade, with a value of about 176 billion (USD), is counterfeit • This number exceeds the Gross National Product (GNP) of entire economies such as Argentina (173 billion USD), Ireland (167 billion USD), Israel (129 billion USD) and Venezuela (128 billion USD) • Some authorities argue that counterfeits make up much more than 2% of world trade.

  6. Market Shares • Counterfeits share of electrical components market: • Africa 25-75% • Middle East 20-40% • Eastern Europe 10-40% • Lost sales worldwide €2- 4billion in 2005. • Special mention of BEAMA and the Electric Dragon project.

  7. Scope of Global Counterfeiting • A very high percentage of counterfeit goods originate in China • Counterfeit products infiltrate legitimate supply chains • New technologies, including the internet, have given counterfeiters access to new channels of distribution • Counterfeit products are bought and sold in virtually all economies

  8. Scope of Global Counterfeiting • Counterfeiters constantly alter their trafficking routes • Customs authorities are overwhelmed with the scale and scope of counterfeiting • Free trade zones are used to ‘sanitize’ manifests as to the origin of counterfeit goods • Free ports are transit points that enable counterfeiters to conceal distribution • Which one is yours ?

  9. Counterfeiting Today • Dalmatian dogs. • Policemen. • Water • Rice • Tea / Coffee • Identities • Eggs • Electrical Products. • Automotive Spares. • Hydraulic Parts • Aircraft Spares • Pharmaceuticals • Cars • Cosmetics • Baby Milk

  10. Why Counterfeit Electrical Products ? • High unit profitability and large market • Low tech so easy and cheap to produce • Small operations easy to conceal • Enforcement poor – penalties low BUT • Risk of discovery increasing due to industry efforts • Infiltrating established distribution chains can be difficult • Consumer resistance if safety concerns highlighted

  11. Effects on Supply Chain • IP rights owners require more protection to safeguard their brands. • Counterfeiting affects distributors, retailers and other suppliers throughout the distribution chain. • The cost of combating counterfeiting is growing.

  12. Effects on Consumers • Consumers are cheated out of quality products and are exposed to health and safety risks • Safety issues are prevalent in many sectors, including: • Food and beverages • Pharmaceuticals • Automotive and machinery • Electrical components, including: • Relays and contacts • Timers, circuit breakers and fuses and • Wiring accessories and batteries • Substandard items can cause property damage, illness, injury and death

  13. Successes • Government and business (rights owners) leaders are engaged in expanding efforts to combat counterfeiting • 90 countries were represented in the most recent global Intellectual Property (I.P.) congress in Dubai. • Governments have strengthened legal frameworks and enforcement efforts • Enforcement directive in the European Union • The March 2006 ‘Stop Counterfeiting in Manufactured Goods Act’ in the United States • Trademark law revisions in China • 60 countries identified to revise their I.P. laws.

  14. European Commission LVD Working Party in March 2007 – Commission view: “Counterfeit Products cannot comply with European safety legislation”

  15. ON THE GROUND The BEAMA Anti-Counterfeiting WG

  16. BEAMA Anti-Counterfeiting Working Group - Members

  17. BEAMA Anti-Counterfeiting Working Group Prime Objectives • Raise awareness and create a political will in affected countries • Employ investigators to take group raid action at source, mainly in China and in market countries • Establish international communication network between Europe, Far East, Middle East and Africa TAKE ACTION!

  18. BEAMA Anti-Counterfeiting Working Group Achieving the Objectives • Good relationships established with Customs and government officials in all areas • Seminars and training exercises for Customs officers • Investigations and raid action now extended from China to numerous African countries, Kuwait, Jordan, Saudi Arabia • Efficient intelligence networks established within all operational areas

  19. BEAMA Anti-Counterfeiting Working Group Raising Awareness Sequel to “Counterfeit Kills” available on dvd and cd free of charge. Arabic and French versions now available. “Counterfeit Kills – Protect Yourself”

  20. BEAMA Anti-Counterfeiting Working Group Raising Awareness Typical poster used in the Middle East

  21. BEAMA Anti-Counterfeiting Working Group Projects • Electric Dragon – China • Electric Lion – Kenya, Tanzania, Uganda • Electric Cheetah – Nigeria, Ghana • Electric Hyena – Saudi Arabia • Electric Falcon – Kuwait • Electric Ibex – Jordan • Electric Oryx – Sudan • Electric Jerboa – Qatar

  22. Electric Dragon - 2008 • Permanent operation in China since 2000 • Chinese investigators exclusive to us • Great co-operation from authorities • Visits to Guangzhou Trade Fairtwice per year to raid stands and gain intelligence • Over 200 factories raided • 10 Million products seized plus packaging & tooling. • 18 brands now represented and growing

  23. Electric Dragon - 2008 • A truly international project with European, American and Australian companies • Interest from Trade Bodies around the World. i.e. NEMA, UL, CSA, Domergie. • BEAMA Presentations in USA, Canada, Italy, France, Belgium, Spain, Middle East, Africa Malta, Germany, Hungary, Poland • Customs Database - probably the best Database in the World for our industry • Recognition for the work that BEAMA is doing in latest OECD report

  24. Canton Fair, China - 2008 New Pazhou complex, Guangzhou, China12,000 Stands over 500,000 sq m

  25. Electric Dragon - 2008 Yiwu market • Largest wholesale market in the world • Estimated around 240 wholesalers selling counterfeit electrical products • Because of the action of BEAMA the Yiwu market has removed its counterfeit displays

  26. ANY ELECTRICAL PRODUCT CAN BE COPIED SWITCHES, SOCKETS and LIGHTING products.

  27. ANY ELECTRICAL PRODUCT CAN BE COPIED CIRCUIT BREAKERS, FUSES and CABLE

  28. ANY ELECTRICAL PRODUCT CAN BE COPIED EVEN CERTIFICATION MARKS CAN BE COPIED

  29. COUNTERFEIT CATALOGUES Typical catalogues found at the Canton Fair and in Yi Wu.

  30. Designs and Part numbers can be copied

  31. Labels and Holograms can be copied.

  32. Chinese labels to be replaced with branded Labels – both state “Made in USA”.

  33. BEAMA Arriving at an illegal factory

  34. Counterfeit products seized

  35. Production continues during a raid

  36. Moulding Area – Claimed to have ISO 9001 !

  37. C Using a hairdryer for temperature calibration!

  38. Electric Dragon - 2008 BEAMA Warehouse Wenzhou

  39. Electric Dragon - 2008

  40. Destruction African Style - 2007 Destruction Seizure

  41. WHICH MARKETS ARE NOW BEING AFFECTED? EUROPE

  42. WHY EUROPE? • High prices • Free to enter market • Limited controls in some new EU countries. • UK, Ireland, Italy, Spain and Portugal see increasing levels • France, Germany, Netherlands and Nordic countries next

  43. EU Customs Seizures • 2005: Customs seized 75 Million products from 26,000 cases – 60% of all counterfeits from China • 2006: Customs seized 250 Million products from 37,000 cases – 80% of all counterfeits from China

  44. The Danger for Poland • The world is getting a smaller place. • With Internet, trade is very easy. • Free Trade Zones and Duty Free Areas can hide illegal trading. • Customs resource at the ports of entry cannot control every consignment. • All means Poland can be an easy target.

  45. What could you lose? • Loss of BRAND REPUTATION • Issues of WARRANTEES • Issues of PUBLIC LIABILITY • Issues of INSURANCE • Issues of HEALTH & SAFETY

  46. Example-Schneider • Copies being imported into UK • Not Schneider branded, but promoted as interchangeable • Many are dangerous but this m.c.b. exploded on test • Trading in such products is illegal • You should only buy from authorised distributors

  47. Example – Nintendo Charger • British boy of 7 killed by counterfeit Gameboy charger • On holiday in Thailand found in hotel room still holding wires • Charger below safety standards – 1mm gap between circuits • Coroner stated that the “lead was effectively live”

  48. DON’T DESPAIR!What you can do…

  49. Message for Manufacturers • Don’t become a victim of your own success • Consider your I.P. rights • Design in anti-counterfeiting measures • Stay ahead of the counterfeiters • Don’t wait till it’s too late • Take action NOW ! • Join the BEAMA WG

  50. Message for Installers and Wholesalers • Check packaging and labelling. • Check certification marks • Check CE marks • Check the weight • Obtain through authorised and known distributors. DON’T KILL YOUR CUSTOMERS!

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