Europe to get Tougher on Counterfeiters


Trafficking in fake goods is as lucrative as dealing in narcotics and weapons for organized criminals — and it has a lower risk for prosecution, says José Manuel Durão Barroso, president of the European Commission. But the 27 countries making up the European Union are preparing to clamp down.

"Counterfeiting now takes place on an industrial scale. The days when fake goods meant shifty men with a suitcase full of Rolexes, or teenagers swapping cheap computer games, are over," Barroso told an audience at last month's Global Anti- Counterfeit Summit in Brussels. The Organization for Economic Cooperation and Development estimates that global trade in fake products is worth about $200 billion, "higher than the gross domestic product of more than 150 countries."

The E.U. in 2004 beefed up legislation enforcing intellectual property rights (IPR). Barroso says the European Commission (the executive branch of the EU) is convinced that to fight counterfeiting effectively, member countries also must deem commercial IPR infringements as a criminal offense. "Member states would also need to implement minimum sentences and a range of other penalties that would apply to both individuals and companies, including fines, confiscation of the guilty party's assets and the closure of premises," he said.

European customs officials seized more than 128 million counterfeit and pirated goods in 2006, a jump of 70 percent over 2005 totals. Customs organizations have developed new risk analysis techniques to exchange information in an attempt to combat counterfeiting and piracy. Barroso suggested that industry (particularly brand owners) can better protect their property by communicating more effectively with customs officials.

But the final hurdle is to get cooperation from the third-party countries. Barroso reported that the commission has substantially increased its efforts to discuss the situation with China, Russia, Ukraine and several Latin American countries. EU investigations, he added, "confirmed what we already suspected, which is that the vast majority of fake goods intercepted on their way into the E.U. — around 80 percent — are made in China.

"Also high up on the list is the United Arab Emirates, because so much traffic passes through the ports there, often to hide the true origin of the fake goods," Barroso said. Still, "China remains the elephant in the room. Unless we successfully engage China, then everything else we do is a mere sideshow." — Guido Ebert