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CTF Final 742011 Counterfeiting A global spread A global threat 2011 Edition Advanced Unedited Edition Advanced Unedited Edition The views expressed in this Report do not necessarily reflect those of the United Nations. No part of this publication may be photocopied, recorded or otherwise reproduced in any form or by electronic or mechanical means without prior permission of UNICRI. First published 2011. Applications for reproduction should be made to: UNICRI, Viale Maestri del Lavoro 10 10127, Turin (Italy) Tel +39-011-6537 111 – Fax +39-011-6313 368 Web-site: www.unicri.it E-mail: [email protected] 2 Advanced Unedited Edition TABLE OF CONTENTS TABLE OF CONTENTS ----------------------------------------------------------------------------- 3 ACKNOWLEDGEMENTS -------------------------------------------------------------------------- 4 LIST OF ABBREVIATIONS------------------------------------------------------------------------ 5 FOREWORD------------------------------------------------------------------------------------------- 6 1. COUNTERFEITING: A GLOBAL SPREAD, A GLOBAL THREAT --------------------8 1.1 Introduction ------------------------------------------------------------------------------------- 8 1.2 General Elements----------------------------------------------------------------------------- 11 1.3 Counterfeiting: A growing phenomenon -------------------------------------------------- 12 1.4 Causes underlying the growth of the phenomenon -------------------------------------- 28 2. THE DANGERS AND EFFECTS OF COUNTERFEITING------------------------------ 38 2.1 Economic losses ------------------------------------------------------------------------------ 39 2.2 Social consequences ------------------------------------------------------------------------- 46 2.2.1 Medicines --------------------------------------------------------------------------------- 50 2.2.2 Toys --------------------------------------------------------------------------------------- 60 2.2.3 Spare parts for motor vehicles and aircraft ----------------------------------------- 62 2.2.4 Food and beverages -------------------------------------------------------------------- 71 3. COUNTERFEITING AND ORGANIZED CRIME ---------------------------------------- 78 3.1 Defining organized crime ------------------------------------------------------------------- 78 3.1.1 The development of organized crime ------------------------------------------------- 80 3.2 The criminal management of counterfeiting ---------------------------------------------- 82 3.2.1 Motivations and immediate consequences ------------------------------------------- 82 3.2.2 Counterfeiting as an organized crime activity -------------------------------------- 93 4. CONCLUSIONS AND RECOMMENDATIONS ------------------------------------------ 108 4.2 Communicating the knowledge------------------------------------------------------------ 112 4.3 Building up a multifaceted strategy------------------------------------------------------- 114 4.4 The role of the United Nations ------------------------------------------------------------ 116 BIBLIOGRAPHY ---------------------------------------------------------------------------------- 118 3 Advanced Unedited Edition ACKNOWLEDGEMENTS This Report was prepared by the Emerging Crimes Unit of the United Nations Interregional Crime and Justice Research Institute (UNICRI), under the supervision of Ms. Angela Patrignani. The following individuals contributed towards the research and drafting of this Report: - Marco Musumeci, UNICRI Programme Coordinator, Research and Drafting - Vittoria Luda di Cortemiglia, UNICRI Programme Coordinator - Salome Stevens, Intern. The drafting of the Report was supported by the contribution of different Agencies and Organizations. In particular, noticeable support was provided by: - Europol - The Italian Guardia di Finanza - The Italian National Anti-Mafia Bureau - The Italian Prosecution Office attached to the Court of Naples, Vice Chief Prosecutor Fausto Zuccarelli - The National Authorities of the Kingdom of Thailand. UNICRI would also like to thank all of the experts, Law Enforcement Officers, and Representatives of National Authorities who provided us with valuable information during the interviews we have conducted. The realization of this Report was made possible thanks to the support of the Italian Ministry of Economic Development and the Italian Ministry of Foreign Affairs. 4 Advanced Unedited Edition LIST OF ABBREVIATIONS AGC: Allied Glass Containers ALAFARPE: Peru’s Association of Pharmaceutical Laboratories ASEM: Asia Europe Meeting BASCAP: Business Action to Stop Counterfeiting and Piracy CACN: Canadian Anti-Counterfeiting Network CCPCJ: United Nations Commission on Crime Prevention and Criminal Justice CEBR: Centre for Economic and Business Research DIGEMID: Peruvian General Directorate of Medicines, Supplies and Drugs EU: European Union FAA: United States Federal Aviation Authority FBI: United States Federal Bureau of Investigation FDA: United States Food and Drugs Administration FSHSS: Russian Federal Service for Health Sphere Supervision GACG: Global Anti Counterfeiting Group GMA: Grocery Manufacturers Association ICE: United States Immigration and Customs Enforcement IPR: Intellectual Property Rights MEMA: Motor and Equipment Manufacturers Association NAFDAC: Nigerian National Agency for Food, Drugs Administration and Control NQCL: National Quality Control Laboratories OECD: Organization for Economic Cooperation and Development OLAF: European Commission Anti Fraud Office RAPO: Russian Anti-piracy Organization SFDA: Chinese State Food and Drug Administration SUPs: Suspected Unapproved Parts TAXUD: European Commission Taxation and Customs Union TRIPs: Trade Related Aspects of Intellectual Property Rights UNICRI: United Nations Interregional Crime and Justice Research Institute U.S.: United States of America WCO: World Customs Organization WTO: World Trade Organization 5 Advanced Unedited Edition FOREWORD There is a general and spread tendency in underestimating the seriousness and gravity of counterfeiting. When UNICRI wrote its first Report dedicated to this issue in 2007, our choice was clear: we will foster the change of this attitude and show how dangerous counterfeiting is for the society as a whole. We presented the hazardousness of this activity by touching upon several elements of concern directly linked to this crime. On that occasion we focused in particular on the health and safety consequences for citizens that certain categories of counterfeit products can cause and on the involvement of organized crime in this illicit trade. If in 2007 we considered such aspect as one of the several aspects that should allow us to change our perception of counterfeiting, with the 2011 Report we have put organized crime at the core of the problem. The research efforts spent in these years convinced us that organized crime involvement is the most compelling aspect that has to be taken into account when tackling counterfeiting. This view does not neglect nor underestimate the serious risks created by counterfeit products for consumers: to the contrary, these aspects have been fully taken into account into this Report. Counterfeiting is today a rampant business involving extremely complex distribution networks and increasingly flooding the markets of all countries in the world with dangerous and potentially deadly products. Organized crime is the reason behind this global spread. Criminal organizations are the real managers of this trade, having transformed counterfeiting into a veritable illicit mass production and distribution enterprise. The spread of counterfeit products we are experiencing today would not be possible without the involvement of unscrupulous criminals, who everyday sell counterfeit medicines to unaware patients, put adulterated food and beverages on supermarket shelves, and make our children play with counterfeit toxic toys. The illicit reproduction of certain product categories is cause for greater concern, because of the negative consequences they can have on consumers’ safety. However, the counterfeiting of all products must be strongly condemned and fought as it gives criminal 6 Advanced Unedited Edition organizations an incredible operative capacity in consequence of the noticeable profits that derive from this activity. There is no doubt today that counterfeiting is an emerging global threat managed by criminal organizations and, we must add, a rapidly growing and expanding one. For this reason UNICRI welcomes the discussion on this topic started during the works of the 19 th session of the United Nations Commission on Crime Prevention and Criminal Justice (UNCCPCJ) held in Vienna in May 2010. We are honored for the invitation from the UNCCPCJ to update our 2007 Report, Counterfeiting, a global spread, a global threat, and to present its updates to the 20 th Session of its works. The possibility of discussing these issues within this important international forum is a first but significant step to consider placing the fight against counterfeiting within the wider fight against transnational organized crime, starting the engines of a needed and deeper cooperation among Member States on this topic. UNICRI is ready to support this process and will continue to enhance the spread of knowledge regarding counterfeiting, the criminals and its consequences, while further implementing concrete actions that will have the potential to represent a step forward in the fight against this emerging form of crime.
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