European regulators plan to boost the powers of customs authorities to seize counterfeit Nintendo Co games, Nike Inc shoes and other fake brand-name products used to finance organized crime and terrorism.
The European Commission will today propose requiring customs inspectors to work with trademark holders to uncover suspected forgeries, which cost European companies US$2 billion in 2001. In coming weeks it will also call for tighter pan-EU penalties for counterfeiters.
Fake luxury goods, compact discs, video cassettes, perfume, clothes and shoes account for over 5 percent of world trade, the Organization for Economic Cooperation and Development says. Brand owners say knock-off bags fall apart, counterfeit washing-powder can burn the skin and fake motor parts and drugs can kill.
Ripping off brand-name products "is very low risk and very high gain," said Marie Patullo, legal affairs manager at the European Brands Association, which represents 1,600 companies including Royal Philips Electronics NV and Beiersdorf AG.
Customs authorities in the 15-nation EU found 95 million pirated articles in 2001, nine times more than in 1998, after stepping up international cooperation.
Half of the rise was accounted for by an increase in everyday consumer goods such as fake L'Oreal SA toiletries, Diageo Plc unit Guinness drinks and Nestle SA food.
"This is a very important and growing problem which affects not only the economic interests of the rights holders but can also very seriously affect consumer health and consumer protection," commission spokesman Jonathan Todd said.
Some products including fake pots of Unilever NV's Vaseline smuggled from Dubai to the UK were used to raise money for with Osama bin Laden's al-Qaeda terrorist network, the commission says.
The rules would extend safeguards to include seizures of plants and of foods named after the region where they are produced, such as Roquefort cheese. They would cut red tape to help companies cooperate with customs officials to track down, examine and destroy pirate goods.
Compact discs, digital versatile disks and cassettes accounted for 42 percent of the total found in 2001. The most popular imitations in other categories were Chanel Inc perfumes, Nokia Oyj electrical equipment and Rolex Group watches.
Almost a quarter of products intercepted last year came from Thailand, 18 percent from China, 8 percent from Turkey, 5 percent from Hong Kong, 4 percent each from the Czech Republic and Taiwan and 3 percent from the US About 60 percent came by air.
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