finding and combating counterfeiters polish federation of electrical wholesalers 9 th may 2008...
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FINDING AND COMBATING COUNTERFEITERS
Polish Federation of Electrical Wholesalers9th MAY 2008
WARSAWDave Dossett
BEAMA - ACWG
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
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.
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.
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
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 ?
Counterfeiting Today • Electrical Products.
• Automotive Spares.
• Hydraulic Parts
• Aircraft Spares
• Pharmaceuticals
• Cars
• Cosmetics
• Baby Milk
• Dalmatian dogs.
• Policemen.
• Water
• Rice
• Tea / Coffee
• Identities
• Eggs
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
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.
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 beveragesPharmaceuticals 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
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.
European Commission
LVD Working Party in March 2007 – Commission view:
“Counterfeit Products cannot comply with European safety legislation”
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!
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
BEAMA Anti-Counterfeiting Working Group
Raising Awareness
“Counterfeit Kills – Protect Yourself”
Sequel to “Counterfeit Kills” available on dvd and cd free of charge. Arabic and French versions now available.
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
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
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
Electric Dragon - 2008
• 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
Yiwu market
• 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
WHY EUROPE?
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
• 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.
The Danger for Poland
• Loss of BRAND REPUTATION
• Issues of WARRANTEES
• Issues of PUBLIC LIABILITY
• Issues of INSURANCE
• Issues of HEALTH & SAFETY
What could you lose?
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
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”
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
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!
Message for Installers and Wholesalers
• Remember to suspect too good prices
• If in doubt check with brand owner
• Check with Certification body
• Know your supplier
• Be sure – you are responsible
• 3Ps – Place , Person, Price
DON’T KILL YOUR CUSTOMERS!
Supply Chain Co-operation
• In France Manufacturers and Wholesalers have signed an agreement not to trade in counterfeit or non compliant products
• In the UK, BEAMA has signed a similar Charter with Wholesalers and Installers Associations
Message to Authorities
• It is your role to create legislation to fight this illegal and dangerous trade
• Governments must ensure penalties do act as deterrents and that Laws are effective
• Remember, in this industry, we are talking about a matter of life and death- this is not just about T shirts and CD’s !
• As well as economic damage
Message to all Counterfeiters
If you manufacture, trade or install products that infringe the I.P. rights of our members…
We are out to get you !
AND WE WILL !
The difference between an Original and a Copy
Italian Ferrari
Copy
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2nd Press this Button