FINDING AND COMBATING COUNTERFEITERS Polish Federation of Electrical Wholesalers 9 th MAY 2008 WARSAW Dave Dossett BEAMA - ACWG - PowerPoint PPT Presentation

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FINDING AND COMBATING COUNTERFEITERS Polish Federation of Electrical Wholesalers 9 th MAY 2008 WARSAW Dave Dossett BEAMA - ACWG. FINDING AND COMBATING COUNTERFEITERS. POLITICAL PROGRESS ON THE GROUND WHAT YOU CAN DO. POLITICAL PROGRESS.

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FINDING AND COMBATING COUNTERFEITERS Polish Federation of Electrical Wholesalers 9 th MAY 2008 WARSAW Dave Dossett BEAMA - ACWG

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FINDING AND COMBATING COUNTERFEITERS Polish Federation of Electrical Wholesalers9th MAY 2008WARSAWDave Dossett BEAMA - ACWG


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FINDING AND COMBATING COUNTERFEITERS

  • POLITICAL PROGRESS

  • ON THE GROUND

  • WHAT YOU CAN DO


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POLITICAL PROGRESS


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Organisation for Economic Cooperation and Development(OECD)

Has recently issued a report on the Economic Impact of Counterfeiting and Piracy with a special chapter on the Electrical components sector


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Scope of Global Counterfeiting

  • The OECD concluded in a 2007 study that about 2% of world trade, with a value of about 176 billion (USD), is counterfeit

  • This number exceeds the Gross National Product (GNP) of entire economies such as Argentina (173 billion USD), Ireland (167 billion USD), Israel (129 billion USD) and Venezuela (128 billion USD)

  • Some authorities argue that counterfeits make up much more than 2% of world trade.


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Market Shares

  • Counterfeits share of electrical components market:

    • Africa 25-75%

    • Middle East 20-40%

    • Eastern Europe 10-40%

  • Lost sales worldwide €2- 4billion in 2005.

  • Special mention of BEAMA and the Electric Dragon project.


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Scope of Global Counterfeiting

  • A very high percentage of counterfeit goods originate in China

  • Counterfeit products infiltrate legitimate supply chains

  • New technologies, including the internet, have given counterfeiters access to new channels of distribution

  • Counterfeit products are bought and sold in virtually all economies


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Scope of Global Counterfeiting

  • Counterfeiters constantly alter their trafficking routes

  • Customs authorities are overwhelmed with the scale and scope of counterfeiting

  • Free trade zones are used to ‘sanitize’ manifests as to the origin of counterfeit goods

  • Free ports are transit points that enable counterfeiters to conceal distribution

  • Which one is yours ?


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Counterfeiting Today

  • Dalmatian dogs.

  • Policemen.

  • Water

  • Rice

  • Tea / Coffee

  • Identities

  • Eggs

  • Electrical Products.

  • Automotive Spares.

  • Hydraulic Parts

  • Aircraft Spares

  • Pharmaceuticals

  • Cars

  • Cosmetics

  • Baby Milk


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Why Counterfeit Electrical Products ?

  • High unit profitability and large market

  • Low tech so easy and cheap to produce

  • Small operations easy to conceal

  • Enforcement poor – penalties low

    BUT

  • Risk of discovery increasing due to industry efforts

  • Infiltrating established distribution chains can be difficult

  • Consumer resistance if safety concerns highlighted


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Effects on Supply Chain

  • IP rights owners require more protection to safeguard their brands.

  • Counterfeiting affects distributors, retailers and other suppliers throughout the distribution chain.

  • The cost of combating counterfeiting is growing.


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Effects on Consumers

  • Consumers are cheated out of quality products and are exposed to health and safety risks

  • Safety issues are prevalent in many sectors, including:

    • Food and beverages

    • Pharmaceuticals

    • Automotive and machinery

    • Electrical components, including:

      • Relays and contacts

      • Timers, circuit breakers and fuses and

      • Wiring accessories and batteries

  • Substandard items can cause property damage, illness, injury and death


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    Successes

    • Government and business (rights owners) leaders are engaged in expanding efforts to combat counterfeiting

      • 90 countries were represented in the most recent global Intellectual Property (I.P.) congress in Dubai.

    • Governments have strengthened legal frameworks and enforcement efforts

      • Enforcement directive in the European Union

      • The March 2006 ‘Stop Counterfeiting in Manufactured Goods Act’ in the United States

      • Trademark law revisions in China

      • 60 countries identified to revise their I.P. laws.


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    European Commission

    LVD Working Party in March 2007 – Commission view:

    “Counterfeit Products cannot comply with European safety legislation”


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    ON THE GROUND

    The BEAMA Anti-Counterfeiting WG


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    BEAMA Anti-Counterfeiting Working Group - Members


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    BEAMA Anti-Counterfeiting Working Group

    Prime Objectives

    • Raise awareness and create a political will in affected countries

    • Employ investigators to take group raid action at source, mainly in China and in market countries

    • Establish international communication network between Europe, Far East, Middle East and Africa

    TAKE ACTION!


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    BEAMA Anti-Counterfeiting Working Group

    Achieving the Objectives

    • Good relationships established with Customs and government officials in all areas

    • Seminars and training exercises for Customs officers

    • Investigations and raid action now extended from China to numerous African countries, Kuwait, Jordan, Saudi Arabia

    • Efficient intelligence networks established within all operational areas


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    BEAMA Anti-Counterfeiting Working Group

    Raising Awareness

    Sequel to “Counterfeit Kills” available on dvd and cd free of charge. Arabic and French versions now available.

    “Counterfeit Kills – Protect Yourself”


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    BEAMA Anti-Counterfeiting Working Group

    Raising Awareness

    Typical poster used in the Middle East


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    BEAMA Anti-Counterfeiting Working Group

    Projects

    • Electric Dragon – China

    • Electric Lion – Kenya, Tanzania, Uganda

    • Electric Cheetah – Nigeria, Ghana

    • Electric Hyena – Saudi Arabia

    • Electric Falcon – Kuwait

    • Electric Ibex – Jordan

    • Electric Oryx – Sudan

    • Electric Jerboa – Qatar


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    Electric Dragon - 2008

    • Permanent operation in China since 2000

    • Chinese investigators exclusive to us

    • Great co-operation from authorities

    • Visits to Guangzhou Trade Fairtwice per year to raid stands and gain intelligence

    • Over 200 factories raided

    • 10 Million products seized plus packaging & tooling.

    • 18 brands now represented and growing


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    Electric Dragon - 2008

    • A truly international project with European, American and Australian companies

    • Interest from Trade Bodies around the World. i.e. NEMA, UL, CSA, Domergie.

    • BEAMA Presentations in USA, Canada, Italy, France, Belgium, Spain, Middle East, Africa Malta, Germany, Hungary, Poland

    • Customs Database - probably the best Database in the World for our industry

    • Recognition for the work that BEAMA is doing in latest OECD report


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    Canton Fair, China - 2008

    New Pazhou complex, Guangzhou, China12,000 Stands over 500,000 sq m


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    Electric Dragon - 2008

    Yiwu market

    • Largest wholesale market in the world

    • Estimated around 240 wholesalers selling counterfeit electrical products

    • Because of the action of BEAMA the Yiwu market has removed its counterfeit displays


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    ANY ELECTRICAL PRODUCT CAN BE COPIED

    SWITCHES, SOCKETS and LIGHTING products.


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    ANY ELECTRICAL PRODUCT CAN BE COPIED

    CIRCUIT BREAKERS, FUSES and CABLE


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    ANY ELECTRICAL PRODUCT CAN BE COPIED

    EVEN CERTIFICATION MARKS CAN BE COPIED


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    COUNTERFEIT CATALOGUES

    Typical catalogues found at the Canton Fair and in Yi Wu.


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    Designs and Part numbers can be copied


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    Labels and Holograms can be copied.


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    Chinese labels to be replaced with branded Labels – both state “Made in USA”.


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    BEAMA Arriving at an illegal factory


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    Counterfeit products seized


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    Production continues during a raid


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    Moulding Area – Claimed to have ISO 9001 !


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    C

    Using a hairdryer for temperature calibration!


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    Electric Dragon - 2008

    BEAMA Warehouse Wenzhou


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    Electric Dragon - 2008


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    Destruction African Style - 2007

    Destruction

    Seizure


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    WHICH MARKETS ARE NOW BEING AFFECTED?

    EUROPE


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    WHY EUROPE?

    • High prices

    • Free to enter market

    • Limited controls in some new EU countries.

    • UK, Ireland, Italy, Spain and Portugal see increasing levels

    • France, Germany, Netherlands and Nordic countries next


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    EU Customs Seizures

    • 2005: Customs seized 75 Million products from 26,000 cases – 60% of all counterfeits from China

    • 2006: Customs seized 250 Million products from 37,000 cases – 80% of all counterfeits from China


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    The Danger for Poland

    • The world is getting a smaller place.

    • With Internet, trade is very easy.

    • Free Trade Zones and Duty Free Areas can hide illegal trading.

    • Customs resource at the ports of entry cannot control every consignment.

    • All means Poland can be an easy target.


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    What could you lose?

    • Loss of BRAND REPUTATION

    • Issues of WARRANTEES

    • Issues of PUBLIC LIABILITY

    • Issues of INSURANCE

    • Issues of HEALTH & SAFETY


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    Example-Schneider

    • Copies being imported into UK

    • Not Schneider branded, but promoted as interchangeable

    • Many are dangerous but this m.c.b. exploded on test

    • Trading in such products is illegal

    • You should only buy from authorised distributors


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    Example – Nintendo Charger

    • British boy of 7 killed by counterfeit Gameboy charger

    • On holiday in Thailand found in hotel room still holding wires

    • Charger below safety standards – 1mm gap between circuits

    • Coroner stated that the “lead was effectively live”


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    DON’T DESPAIR!What you can do…


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    Message for Manufacturers

    • Don’t become a victim of your own success

    • Consider your I.P. rights

    • Design in anti-counterfeiting measures

    • Stay ahead of the counterfeiters

    • Don’t wait till it’s too late

    • Take action NOW !

    • Join the BEAMA WG


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    Message for Installers and Wholesalers

    • Check packaging and labelling.

    • Check certification marks

    • Check CE marks

    • Check the weight

    • Obtain through authorised and known distributors.

    DON’T KILL YOUR CUSTOMERS!


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    Message for Installers and Wholesalers

    • Remember to suspect too good prices

    • If in doubt check with brand owner

    • Check with Certification body

    • Know your supplier

    • Be sure – you are responsible

    • 3Ps – Place , Person, Price

    DON’T KILL YOUR CUSTOMERS!


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    Supply ChainCo-operation

    • In France Manufacturers and Wholesalers have signed an agreement not to trade in counterfeit or non compliant products

    • In the UK, BEAMA has signed a similar Charter with Wholesalers and Installers Associations


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    Message to Authorities

    • It is your role to create legislation to fight this illegal and dangerous trade

    • Governments must ensure penalties do act as deterrents and that Laws are effective

    • Remember, in this industry, we are talking about a matter of life and death- this is not just about T shirts and CD’s !

    • As well as economic damage


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    Message to all Counterfeiters

    If you manufacture, trade or install products that infringe the I.P. rights of our members…

    We are out to get you !

    AND WE WILL !


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    WATCH OUT !

    BEAMA’s ABOUT !


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    The difference between an Original and a Copy

    Italian Ferrari

    1st Press this Button

    Copy

    2nd Press this Button


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    COUNTERFEIT KILLS

    Protect Yourself!


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