Organised crime controls counterfeiting says UN 1 January 2008 Counterfeiting has been described as a dangerous and growing enterprise controlled by organised criminals in a new UN report released last month. “Counterfeiting has become fertile ground for organised crime because the syndicates realise they can make great profit at little risk,” said Sandro Calvani, the director of the UN Interregional Crime and Justice Research Institute, which compiled the report. “It is a 21st century gold mine for organised criminals who are creating networks designed to exploit the same trade routes used for the trafficking of human beings, drugs and weapons. It is an immense source of profits, which are readily reinvested in other illegal activities or used to launder money derived from other crimes.” The most well-known criminal organisations involved in counterfeiting are the Chinese triads, the Japanese Yakuza, the Neapolitan Camorra and the Russian Mafia, which is heavily involved in counterfeiting music CDs, software and DVDs, the report said. The Italian Anti-Mafia Bureau has found growing links between Chinese criminal organisations and the Camorra, it added, whilst investigators in Indonesia have noted that the Calabriabased ‘Ndrangheta are trafficking in counterfeit CDs and DVDs in Asia. Health and economic costs The report also highlighted the economic losses and health risks tied to counterfeit goods, citing data gathered from governmental and international agencies. Because entrepreneurs lose profits and states lose tax revenue, counterfeiting slows economic growth and costs an estimated 100,000 jobs in the European Union alone, it said. And it pointed out that counterfeiting carries far lighter penalties than traditional crime syndicate activities, like trafficking drugs, while providing much higher profits. For example, a computer program replicated at a cost of $0.29 can be sold for $65.29, whilst the cost of producing a gram of cannabis is $2.21 with a return of just $17.41. The researchers set out to determine the scale of counterfeiting and their compiled data appears to suggest that up to 7% of all goods in the world market are fakes; everything from cough syrup to car parts. For toys sold in the EU this figure rises to 10%, the research suggests, adding that most counterfeit products marketed in the European Union come from China, Thailand, Morocco or Turkey, but that complicated shipping routes through several countries can mask their origin. What is clear, notes the report, is that seizures of knockoffs in the EU soared 88% between 2000 and 2006, when 128 million items were confiscated, including toys, pharmaceuticals, clothing, handbags, CDs and DVDs. Counterfeiters are eager to operate where demand is high and focus on well-known brands, particularly in durable items like toys, says the report. After all, the whole point of counterfeiting is to cash in on the perception of what a brand is valued at. Thus, the citizens of the world need to be made more aware that counterfeit products reinforce organised crime whilst damaging consumers’ health and their domestic economies. They must start looking out for products sold at street markets, people selling things out of catalogues door-to-door, and of course products sold over the Internet where, unless they are going to an extremely good, reputable, secure site, there is a more than 50% chance of buying a fake - whether it’s a toy, pharmaceutical or anything. Source : Counterfeiting Confidential January 2008