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SALES OF COUNTERFEIT PRODUCTS TO RISE TO 18% OF WORLD TRADE IN TWO YEARS

Added: (Wed May 29 2002)

Pressbox (Press Release) - LONDON, Leading Intellectual Property (IP) abuse investigators, Carratu International plc, are predicting that sales of counterfeit products will rise to 18% of world trade in the next two years, double the current rate of 9%. This will pose a very serious threat to the economic well-being of international brands and companies and provide a major source of funding for international criminal and terrorist groups.

"This sharp increase in intellectual property abuse and counterfeiting, now the fastest growing economic crimes, will exacerbate an already serious problem." said Paul Carratu, Group Managing Director of Carratu International. "We are now calling on governments around the world to take stronger action to counter this threat that is already costing companies a staggering $200billion - $400billion per year."

Extensive research and investigations by Carratu International have linked counterfeit products with a number of criminal and terrorist organisation around the world including ETA, Hizbollah, Al-Qaeda, the Mafia, Triads, the IRA, Russian Mafia, Yakuza and the Drug Cartels. Moreover, a recent publication from the UK’s National Criminal Intelligence Service (NCIS) has shown significant involvement by organised criminals in counterfeiting.

"Counterfeiting and Piracy is often perceived as an activity of the petty criminal trying to make a few pounds. This is not the case. It is highly profitable and has strong links to organised criminal groups and terrorist organisations, often providing funding for other criminal activities. Intellectual property abuse is damaging to economies and suppresses innovation and creativity." said Paul Carratu.

Products that are extreme vulnerable at the moment are pharmaceuticals, clothing and computer software. Microsoft state that they lose $13billion per year, whilst US Automobile Manufacturers Association claims that counterfeit parts is costing the industry $12billion per year and is responsible for the loss of 750,000 jobs. One area of dramatic growth is the sale of counterfeit pharmaceuticals, such as Viagra, via the internet. Consumers are being tempted by lower prices, but the very nature of the internet means that the origin of the drugs are disguised and is often used as an anonymous outlet for counterfeiters.

The UK’s Department of Trade and Industry has identified some of the counterfeit goods found in the UK which include: Washing powder that contained highly caustic ingredients that caused skin burns; Health drinks that contained ten times the recommended safe level of ephedrine; Children's videos recorded over pornographic material not properly erased; Perfume that not only causes skin reactions but the scent will only last for a few minutes and contents are often not hygienic; Hand tools that were made of such brittle steel that they broke into razor sharp fragments, and; Computer software carrying a virus that ruins the whole computer system.

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Notes to Editor
1) In 2000, US Customs seized over $45million worth of counterfeit products including $7.8m of DVDs, videos and music CDs and tapes, $4.4m of computer hardware, $5.9m of toys, $4.2m of cigarettes, $3.9m of watches and $1.3m of sunglasses.

2) Of the seizures of counterfeit goods by US Customs in 2000 in 3,244 actions, the top 6 worst offending countries of origin were China ($15m), Taiwan ($6m), Malaysia ($4m), Hong Kong ($3.6m), Singapore ($3m) and Korea ($2m).

3) ETA controls the sale of counterfeit clothes and handbags in Southern Spain.

4) Hizbollah fund the manufacture and export of counterfeit pharmaceutical products and are also mass producing counterfeit $100 bills.

5) The recovery of manuals has shown the Al-Qaeda recommends the sale of counterfeit products to raise funds.

6) The UDF and IRA have been working together importing and selling pirate videos.

7) Yakuza have been blamed by Louis Vuitton for a 60% fall in sales in the Far East.

8) Paul Carratu FIPI, CFE, MIFS - Group Managing Director, Carratu International. Paul joined Carratu International in 1972, originally specialising in the investigation of intellectual property fraud, including product counterfeiting. He has successfully conducted complex undercover operations throughout Europe, North America and the Far East and has been commended by both civil and criminal courts. Apart from his expertise as an undercover investigator, he is also acknowledged as an authority on computer related crime and is a regular lecturer at Loughborough University and other commercial venues. In 1981, Paul was elected to the Board of Carratu International and five years later became Managing Director. He is a Fellow of the Institute of Professional Investigators and has qualified as a Certified Fraud Examiner and is a Member of the Association of Certified Fraud Examiners.

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