ECPA Anti-counterfeit Project

ECPA Anti-counterfeit Project Counterfeiting and other Problems in Plant Protection Markets 2nd International Conference State Plant Health and Seed Inspection Service And Polish Crop Protection Service 13th November 2008 Warsaw Rocky Rowe www.ecpa.be

31 national associations 18 national associations Industry Network of Associations across 90 Countries 26 national associations 13 national associations

European Crop Protection Association . 28 National Associations (Poland – PSOR – Michal Fogg) 17 Companies Brussels based with DG and Secretariat plus 37 Working Groups Several special projects including Anti-counterfeiting

European Crop Protection Association . • Anti-counterfeiting Project Team • Established late 2005 in recognition of industry's concerns of • a growing issue. • A special fund established by the member companies to • combat the Issue through:- • Awareness raising • Communications • Advocacy • Engagement of stakeholders • Special national projects

ECPA Anti-counterfeit Project Counterfeit and Fake Pesticides in Europe • A growing problem • Almost all countries affected. • Regional and national hot spots. • A wide range of products, not just new proprietary ones. • Growth in far East chemical manufacturing capability • Inconsistent legislation/rules on export and import • Uncoordinated national enforcement strategies • To few resources spread across too many sectors • Political rhetoric and but little action.

ECPA Anti-counterfeit Project A Growing Problem • Across all sectors of industry, more and more counterfeits are being reported. 17% increase in seizures over 2006 60% from China Cosmetics/personal care +264%, Toys +98%, Foodstuffs +62%Pesticides – none. Almost all Countries Affected • Few exceptions across Europe • Global as well as regional Africa, Latin America and Asia Regional and National Hot Spots • Spain, Poland, Ukraine, Baltics

ECPA Anti-counterfeit Project A wide range of products affected • Proprietary products • Generic products Growth in Far East Chemical Manufacturing • China by far the biggest growth area. • Production 20.8% up in 1st half on 2007 figures • Exports 288K tonnes in 1st half, 16.4% up on 2007, value 1.2 Billion USD • What regulatory checks are made on Chinese manufactures. Do they exist ?Inconsistent Rules on Export and Import • Chinese (ICAMA) export rules and EU import rules not connected. • Customs focus only on IPR. • Non IPR chemicals rarely stopped offer opportunities to hide other illicit materials.

ECPA Anti-counterfeit Project Uncoordinated National Enforcement Strategies • Too many agencies involved • No inter communication between national governments • Does IPR have to be violated to trigger a seizure or can you seized on other criteria. Substances likely to damage human health and the environment.Too few resources • With every industry affected, how can enforcement agencies cope ? CDs, luxury goods, cigarettes, motor parts, medicines etc. Political Rhetoric but little action • Five Commissioners calling for action as is the EU Council • Action - what action? • Where is the Commission today ?

ECPA Anti-counterfeit Campaign What types of Products are we dealing with ? • Sophisticated illegal copies of branded proprietary products, packaged and labelled to look exactly alike. IPR infringements – Trade mark. • Generic illegal copies that have not been approved for sale, packed but with rudimentary labels giving the active substance name and concentration only. • Fakes and copies containing anything from talc, water or solvents, outdated/obsolete stocks often based on banned or severely restricted products , recycled packaging with diluted original materials.

ECPA Anti-counterfeit Project Formulated and labelled counterfeit products seized in Poland

ECPA Anti-counterfeit Project Illegal copies of products found in Spain

ECPA Anti-counterfeit Project Illegal herbicide contained in a food oil bottle.

ECPA Anti-counterfeit Project Why Europe ? • Easy to import a chemical/pesticide into Europe • Many, many ports • Millions of containers per day • Customs under resourced and focused on IPR • Only a pesticide once “placed on the market”. • Imports usually of two types • Small 1-5 tonnes of formulated product ready to sell i.e. labelled • Larger consignments 5 – 100+ tonnes, bulk packed ready for repackaging and labelling once inside Europe.

ECPA Anti-counterfeit Project

ECPA Anti-counterfeit Project Why Europe? • Minimal enforcement • Easy abuse of parallel trade rules accommodated by ability to repack. • Origin of product confidential – Have you checked out if the factory exists ? • Poor judicial knowledge of issues • Low penalties • Farmers under increasing pressure to provide low cost food • Commission focused on increasing regulations on what can be used, but with little attention to monitoring of products in the market place. • Minimal political inertia.

ECPA Anti-counterfeit Project Why Europe ? More and more companies from China offering products • www.Alibaba.com – around 1500 companies offering products ready for use. • Increased Chinese presence at trade fairs and conference. • Increase in organised crime • Probably now – world and national economics. More and more opportunities for organised crime and illegal traders to operate.

ECPA Anti-counterfeit Project Why should we all be concerned about Pesticides ? • Counterfeits/fakes are untested and unregulated products. • Can contain high levels of manufacturing by-products and impurities. • Are usually formulated with cheap solvents and surfactants, many already banned across Europe. • Often packed in inferior packaging, liable to leak and thus posing environmental/disposal issues.

ECPA Anti-counterfeit Project Why are we so concerned ? • Counterfeits pose severe health risks to farmers who are applying them. • Can potentially damage/destroy the crop treated and thus ruin the farmers livelihood. • Leave unknown residues in food crops that place consumers at risk. • Create environmental risks to wildlife, water and soil. • Pose environmental waste problems in terms of disposal. • Devalues IPR and brand integrity

ECPA Anti-counterfeit Project Impact on the Food Chain and Risks to Consumers Spanish Pepper Example • In 2006 Spanish peppers treated with illegal isofenphos insecticide. • Picked up in National food monitoring programmes • Rapid food alerts filed by 15 countries. • EFAS adjudged residue levels posed minimal risk • Pepper market in Spain almost collapsed as buyers sough other sources. Only just recovering. • Could have easily have resulted in a major food crisis • How long do we have to wait before another example occurs?

ECPA Anti-counterfeit Project What has Industry been doing ? • Awareness raising – Brussels, Countries • Communicating – conferences, publications • Advocacy – talking to policy makers and politicians about how to make the supply of counterfeits and fakes more difficult. DG Trade, Internal Market, Enterprise, SanCo. • Engagement – working at the national level through our associations to co-operate and support national enforcement agencies. • Working with other industry sectors and using best practises.

ECPA Anti-counterfeit Project Next Steps • The Crop Protection Industry is committed to fighting counterfeiting of its products. • Global, regional and national projects. • Ongoing dialogue with EU customs and Chinese officials imperative to linking legislation and enforcement activity against the counterfeit supply chain. • Regulatory authorities need to apply robust checks on sources of products – How many are real? • Coordinated operations between industry and internal enforcement agencies is critical. • Gaining political priority and resources to meet the challenges.

ECPA Anti-counterfeit Project Conclusion • The manufacture, distribution and supply of counterfeit and illegal chemicals/pesticides is far too easy. • Use of existing legislation must be exploited fully • The concept of just using IPR as a trigger for imports into Europe needs to be widened. – “Dangerous products” • A strong political message needs to be given from Europe to the rest of the world. • Political priorities need to be focused on counterfeits and fakes that may serious harm the consumer and agriculture.

ECPA Anti-counterfeit Project Thank You

ECPA Anti-counterfeit Project