Preview of WAITO report 2011 - Counterfeiting Crime a major challenge
The WAITO Foundation’s 2011 report provides an international reference in the fight against organized crime and dangerous counterfeiting (Counterfeiting-crime©) prejudicing the stability of States and the security of their populations, and industrial sectors, whose responsibility it is to guarantee the protection of consumers. This preview focused on the threat of counterfeited building materials.
Published on: Mar 4, 2016
Transcripts - Preview of WAITO report 2011 - Counterfeiting Crime a major challenge
E -‐ CONSTRUCTION MATERIALS: A NEW THREAT “Fake goods worth more than USD 200 million have been seized and nearly 1,000 people arrested in a series of operations co-‐ordinated by INTERPOL across South America targeting organized criminal counterfeiting networks.” Organized under the auspices of Operation Jupiter, in partnership with the World Customs Organization (WCO), this yearlong operation, throughout 2010, led to a series of interventions across 13 countries in the region and the seizure of nearly eight million counterfeit products. The products seized included construction materials. These goods (equipment and materials) were recovered from a range of locations including markets, commercial shopping centres, and street vendors. In various cases, it was found that social networking sites had been used as distribution channels for these counterfeits. A key element in the success of Operation Jupiter V-‐ the fifth such operation co-‐ordinated by INTERPOL in the region -‐ was the increased awareness and allocation of resources to tackle the dangers posed by counterfeit and pirated products including the creation of dedicated Intellectual Property crime units in Chile and Peru. “The volume and range of goods recovered are clear evidence of the value that Operation Jupiter brings in identifying and dismantling organized crime networks behind these counterfeits and also demonstrates the massive scale of this type of crime not just in South America, but globally,” said INTERPOL Secretary General Ronald K. Noble. In recent years, the global boom in construction and the growth of emerging countries has caused shortages in a range of construction materials and equipment used in the construction and public works sector. In this context, globalization is both a source of hope and danger. There is an ideal kind of globalization where each person’s progress contributes to the progress of society as a whole; but there is also a bad kind of globalization with unfair competition, dumping and aggravated deception, endangering the economy and construction and public works companies, and above all, the final users and consumers. Construction and public works companies are increasingly exposed to major criminal charges for the use and/or purchase of irregular products that can cause accidents endangering people’s safety. Although safety regulations have become stricter, there is no way of identifying where a product was manufactured, whether it meets technical requirements, let alone cases of fraud. In the event of an accident, insurance companies, often forget these things, which are essential in the demonstration of proof, establishing facts, assessing the damages suffered, reimbursing such damages and producing reliable statistics. Recently in China, a general audit of nuclear power stations revealed the presence of non-‐compliant materials, counterfeit or other, inside cooling pools. While such alarming information from emerging countries is becoming increasingly common, European and
French companies, in particular, prefer to remain silent for fear of destabilizing the market. A survey carried out in 2010 by a large professional association in the construction sector, revealed that counterfeiting continues to be seen as a “shameful disease” in the sector. The large majority of companies approached for the survey either refused to reply or wished to remain anonymous. This points to a real conspiracy of silence. Secondly, the survey confirmed the interdisciplinary nature of counterfeit products, including construction (compressors and machinery) and safety devices (footwear, equipment, lifting hooks), fences, circuit breakers, fireproof glazing, building applications, taps and insulating. This is becoming a prime target for counterfeiters. It would be impossible to put a figure on the scale of counterfeiting in this sector, but for electrical equipment alone global damages are estimated at more than 1 billion US$ a year. This is becoming a major problem, in terms of safety, for both final users and construction workers. Lifting hooks can be taken as an example of the disastrous consequences of using non-‐compliant products. Copies can be identical to the original, but in terms of quality, they may lift 40% less weight. Likewise, in terms of the final use of a counterfeit product, analyses of customs seizures of taps have shown that copies release more metals, including copper, into drinking water1. There are obvious reasons for counterfeiters’ keen interest in construction equipment and materials. On a global level the construction market is worth hundreds of billions of US$. New construction and renovation work provides a major pool of easy money for counterfeiters; this has led them to invest more and more in this sector. The new technologies that have been made available to counterfeiters, in particular through the investment of drug trafficking proceeds, the opening of the market to “DIY” through wholesale and the internet and new professional distribution systems, have resulted in major changes in counterfeiting practices and their impact. This is a structured, highly organized and aggressive form of counterfeiting. 1 Hansgrohe (October 2009). Press release, www.hansgrohe.be