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Brand-owners demand more action against counterfeiters.

Summary: More needs to be done by law enforcement authorities to combat counterfeiting and its links to organised crime, say brand-owners.

More needs to be done by law enforcement authorities to combat counterfeiting and its links to organised crime, say brand-owners.

Leading a panel discussion at the Dubai World Conference for Consumer Rights on Wednesday, Omar Shteiwi, chair of Brand Owner's Protection Group, GCC-Yemen, and head of legal compliance and corporate governance for Nestle Middle East FZW, said law enforcement authorities needed to recognise counterfeiting was not a "soft trade."

"There's still a lack of awareness in the minds of law enforcers, authorities and the public. We need to educate (them) that this is a crime that might kill you or your child or family... if you're talking about medicine, food and beverages."

The UAE was a growing economy with 13 million containers entering Jebel Ali Free Zone every year, and while there were counterfeiting laws, customs did not inspect enough containers, and penalties were too few and not harsh enough, he said.

"In Dubai we want to be number one at everything. Why don't we try to be number one at combating counterfeiting? Let's be sincere that this is a serious problem. It's no less a problem than drugs or any other organised crime. Counterfeiters are organised criminals."

When judges were asked why bigger penalties or prison sentences were not imposed, they often said counterfeiters "didn't know what they were doing" or "had good intentions".

The approach was too "laid-back" for a crime that infiltrated all industries and was a global problem, Shteiwi said.

"Six people die every 15 minutes in some African countries because of counterfeit malaria vaccines. All of us should bear the burden and recognise it's serious -- we are looking at the problem (here) but dealing only with the tip of the iceberg. What's under the water is still swimming very freely around."

Richard Rademan, Nike brand protection director for CEE and Middle East, said a matter may lie in an office for months before anything was done.

"A lot of agencies see this as either a car-part or some shoes... but it goes deeper than that. The bottom line is... (if you're) turning a blind-eye to the counterfeit trade, you're turning a blind eye to organised crime.

"There are authorities in this region who say 'the guy isn't robbing anyone, he's making an honest living' ... it's not honest. He's probably employed illegal people, had to deal with trafficking people, and is avoiding tax."

The commonly-used solution of re-exportation -- sending counterfeit goods back to their origin -- was simply transferring the problem, and it would likely "come back via the same container into another port in the same region."

General Motors global brand protection manager Scott Emmer said counterfeiting was often seen as low priority.

Very few of the millions of containers entering ports each year were actually inspected due to limited availability of frontline customs inspectors.

"And we often find counterfeiting products seized and that's the end of it. We would like to see that as the starting point for investigations working upstream to identify all the players."

"It's dubbed by the FBI as the crime of the 21st century. It's extremely profitable -- probably as profitable as the drug trade but there's far fewer penalties. It's organised crime, there's terrorist connections -- we're finding bad elements connected to counterfeiting. They have a large supply chain that rivals ours, so it's very challenging."

An estimated US$12 billion a year trade was done globally in counterfeit auto parts, and figures from the US Federal Trade Commission estimated about $1billion of counterfeiting in the Middle East was automotive-related, he said. This had serious safety implications for UAE citizens, he added.

Counterfeiters were now more sophisticated, with new technologies making it more difficult to identify non-genuine product, and 'co-mingling', where traders sold genuine as well as counterfeit products, allowing them to elude detection.

Ibrahim Bahzad from the Department of Economic Development (DED) agreed that the UAE had to update laws and regulations to combat counterfeiters, who were often viewed with compassion by society as "innocents" despite being organised and operating like "gangs".

The department would recommend harsher penalties, especially for those selling high-risk products such as medical supplies, and would try to make some amendments to legislation, he said.

An employee of the Abu Dhabi Economic Development Authority voiced frustration during the session around the difficulties communicating with some brand-owners after they made an initial complaint, their lack of participation in annual awareness campaigns, and the number of inspections made only to find no counterfeit goods.

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Publication:Khaleej Times (Dubai, United Arab Emirates)
Geographic Code:70MID
Date:Apr 3, 2013
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