Strategies for technical-juridical training and awareness-raising on counterfeiting The implementation of this Report was possible thanks to the financial contribution of Fondazione CRT. The views expressed are those of the authors and do not necessarily reflect the views of UNICRI. Contents of this Report may be quoted or reproduced, provided that the source of information is acknowledged. UNICRI would like to receive a copy of the document in which this Report is used or quoted. To this aim, please contact: UNICRI, Viale Maestri del Lavoro 10 10 127, Turin Italy Tel +39-011-6537 111 – Fax +39-011-6313 368 Web-site: www.unicri.it E-mail: [email protected] 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 persons contributed to the Report: Mr. Marco Musumeci, UNICRI Project coordinator, Research and drafting Ms. Anna Sterzi, UNICRI Fellow, Research and drafting The Report was finalized with the contribution of different Agencies and Organizations. In particular, noticeable support was provided by: The Italian Guardia di Finanza: General Headquarters – 2nd Department The Central Investigative Service on Organized Crime (SCICO) The Guardia di Finanza of Turin The Italian National Anti-Mafia Bureau (DNA) The implementation of this Report was possible thanks to the financial contribution of Fondazione CRT. 4 Justification Counterfeiting has recently gained a place in the daily chronicles with a certain frequency and determination. News reports regarding seizures of counterfeit products around the world are more and more present in newspapers, on TV and on radio programmes. It is undeniable that this contributes to progressively increase awareness on the phenomenon, in particular for what concerns its diffusion; nevertheless, there are still obstacles preventing the development of a perception recognizing how unacceptable this activity is. This limitation derives from the fact that the information presented usually refers to what is commonly indicated as the “tip of the iceberg” of counterfeiting: its submerged part is substantially bigger and more complex, with far more alarming consequences. This discrepancy between the dimension of what is reported of the phenomenon and what is still hidden is understandable in light of the fact that a significant portion of counterfeit products circulates and is traded through an obscure and underground market. On the other hand, the same could not be said with reference to the hazards it causes. This derives from – and is strictly correlated to – certain fundamental elements that are often neither sufficiently presented to the public nor are they adequately discussed. The first of these elements refers to the management of the counterfeiting “trade,” from production, to large-scale distribution, to the actual selling of these products in the streets or in local markets. The second element is the risk deriving from the use of different types of counterfeit products and the various degrees of this hazard. Finally, the “grey zone” surrounding this activity (which limits a full understanding of the phenomenon), is expanded by the presence of one more hidden element. It is the use of the Internet for a series of commercial exchanges aimed at obtaining an advantage from the anonymity that Internet grants. UNICRI has often called attention to the complex nature of counterfeiting and to the importance of providing a complex response that embraces the various aspects of the problem through a multidisciplinary approach. From a legislative point of view, 5 counterfeiting is essentially a violation of the law and often a crime that has to be prosecuted, dedicating more and more efforts to identifying the criminal networks of this trafficking and highlighting the connections between counterfeiting and other forms of crime; but, from an economic point of view, coutnerfeitiing represents a huge market, based on demand and supply rules. Simplifying the discussion, and before analyzing other aspects of the issue’s complexity, our commitment derives from a specific persuasion that we have: any strategy aimed at countering the development of the phenomenon that intervenes in only one of its different components without considering the others, runs a high risk of failure. It is for this reason that we decided in this research to focus our attention on two different aspects: the investigation and enforcement phase, and the awareness-raising of consumers. Thus, the important role played by law enforcers to counter this activity is coupled with the responsible behaviour of every informed consumer who, in our opinion, can greatly contribute to reduce the spread of counterfeiting. The same multidisciplinary approach is at the basis of the entire Programme on Anti-counterfeiting created by the Institute, that foresees a series of activities in different sectors and of which this report is a component. These are the motivations that drove us towards the creation of the two sets of guidelines that are presented in this report, which are dedicated to two aspects that are apparently very distant from each other (investigations and awareness raising) but that, by virtue of the aforementioned complexity of counterfeiting, represent two important elements of a wider strategy. It is now important to define some of the concepts that we have briefly presented in order to better clarify the reasons behind our choice of topics and our commitment. - Management of the counterfeiting trade People usually identify counterfeiting, and especially the counterfeiter, with a stereotype: a street seller in crowded city streets and squares or in local markets who is 6 selling pirated CDs/DVDs or fake luxury bags and designer sunglasses. The diffusion and acceptance of this stereotype are among the most important reasons contributing to spreading a wrong perception of the phenomenon. According to this perception counterfeiting would be a “victimless crime” or a “second class crime,” which would not cause “real” consequences to the society or to consumers, but only economic prejudices affec ting rich multinational corporations. The truth, however, is quite more complex. The profits from the counterfeiting trade along with its actual dimension are probably the starting point that allows us to explore the problem more in depth, while illustrating the limits of this interpretation. We can immediately affirm that, at a global level, counterfeiting represents a volume of international trade worth 200 billion USD, as estimated by the Organization for Economic Co-operation and Development (OECD) for the year 2005.1 The update of this data published by the OECD in 2009, which also includes figures for 2006 and 2007, presents an increasing trend of the production and distribution of counterfeit products. OECD experts estimate that the volume of internationally traded counterfeit goods has reached 250 billion USD in 2007, increasing the relevance of these products with respect to the total global trade from 1,85% in the year 2000 to 1,95% in 2007. This apparently small variation is in reality extremely alarming if one considers that the volume of international trade has doubled in the same years. Counterfeiting is clearly an incredibly big and attractive business, which can generate higher profits than those attained from drug trafficking at a lower risk, given that national legislations usually provide for softer penalties. High profits and low risks are an explosive combination and a lucrative opportunity exploited by organized crime. There is a phrase that captures the “spirit” at the basis of organized crime involvement in this activity: “It could be the buying; it could be the selling; it could be the manufacturing. But with the profits on offer, organized criminals are not going to leave it all to some guy in a garage, are they?” This phrase, which first 1 In this estimation the OECD considered only internationally traded products. If nationally produced and sold products as well as digitally pirated products exchanged via the Internet would be considered, this estimate would increase of some hundred billion dollars. 7 appeared in Tim Phillips’ book Knockoff, illustrates how counterfeiting represents simply too good an opportunity to leave unexploited. This opportunity for organized crime arrived in a particularly favourable historic moment for criminal organizations, which had already completed that transformation process that brought them (particularly the Italian Mafias) to change from a hierarchic, structured and closed organizational configuration to a veritable international criminal enterprise, developing synergies with other criminal groups operating all over the world. The reasons behind this mutation, which happened during the 1970s, are well known and can be essentially found in the nature itself of the goods that criminal organizations were interested at trading at that time: drugs. These are usually produced in a distant place with respect to their final commercial destination.2 In an attempt to manage a trade linking together various parts of the world, criminal groups had to create alliances with other organizations, creating a subdivision of roles and a veritable illicit production/distribution chain. The traditional hierarchical structure, characterized by a strong tie to the territory, could hardly do this job, so criminal groups became transnational and