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DEVASTATING IMPACTS/
ORGANISED CRIME
source: www.inta.org/membersonly/bulletin/
special/2004/09_section10.html
www.fraudaid.com/ScamSpeak/
conprods.htm
www.anti-counterfeitcongress.org/
wco2004/website.asp
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Consumers are being warned that the innocent purchases of counterfeit products from Internet sites and markets are funding terrorist and criminal organisations…- convincing consumers that it is wrong to buy a counterfeit is vital in combating the crime. The counterfeit traders with whom most people come into contact are small-scale operators or street vendors. However, such vendors are only the front end of much wider and more sophisticated networks. Although the term ‘organised crime’ should be used with caution in describing the counterfeiting industry, Interpol states that “extensive evidence is now available which demonstrates that organised criminals and terrorists are heavily involved in planning and committing intellectual property related crimes”;
- for criminal organisations, counterfeiting is an alternative to high risk activities, or is seen as an easy avenue to diversify their business. Interpol warns that counterfeiting and product piracy is becoming the preferred method of funding for a number of terrorist groups, and the FBI has named counterfeiting as “the crime of the 21st century”;
- extensive enquiries by Carratu International have unearthed links between counterfeiting and Al-Qaeda, Hizbollah, the IRA, ETA, the Mafia, Chinese Triad gangs, the Japanese Yakuza crime syndicate, the Russian Mafia and drug cartels. Indeed, the recovery of Al-Qaeda training manuals had shown that the organisation recommends the sale of counterfeit products to raise funds. According to these enquiries, ETA controls the sale of counterfeit clothes and handbags in Southern Spain; Hizbollah fund the manufacture and export of counterfeit pharmaceutical products; the UDF and IRA have been working together importing and selling pirate videos; Yakuza have been blamed by Louis Vuitton for a 60% fall in sales in the Far East; (1)
- a recent UK Threat Assessment of Serious and Organised Crime by the National Criminal Intelligence Service (NCIS) highlighted the links between counterfeiting and organised crime , particularly drug trafficking and immigration crime : in the UK, more than 60% of organised crime groups involved in counterfeiting are also involved in drug trafficking; 25% of the groups involved in immigration crime are also involved in counterfeiting. This not only involved fake documents, but many immigrants are used as sweatshop labour to produce counterfeit goods;
- the Organised Crime Task Force in Northern Ireland estimates that 41% of organised criminals are involved in intellectual property theft and 2/3 of organised gangs in the province have paramilitary involvement. To give you an idea of the size of the figures involved, in 2002, the police in the province seized counterfeit goods worth in excess of £6m (about €9 million ). The vast majority of these items were cigarettes and DVDs; a significant proportion, however, were luxury goods including bags and watches; (2)
- according to the Interpol, in Kosovo , a significant proportion of consumer goods available for sale are counterfeit, profits from which are likely to benefit both organised criminals and ethnic-Albanian extremist groups. The same goes, to a lesser extent, for Chechnya . In 2000, a joint operation between Russian law enforcement agencies and private industry resulted in the break-up of a CD-manufacturing plant. According to the officials involved, the plant was a source of financing for Chechen separatists; (2)
- globally, it is estimated that organised crime gangs earn US$4.6 billion from music piracy annually. In Europe sales of CD-Rs, particularly in Spain, Italy and Greece continue to cause major problems. Counterfeit discs are sold openly on the streets and in markets in a business largely controlled by crime syndicates . Often these same syndicates are involved in people trafficking using illegal immigrants working as virtual slave labourers to duplicate and sell the discs;
- according to the World Customs Organization, crime groups are able to shift production facilities to take advantage of market opportunities . A Chinese crime group, for example, dismantled a factory in Hong Kong that produces fake CDs and rebuilt it in Paraguay – a major South American counterfeiting location – and staffed it with Hong Kong engineers.
(1) Carratu International PLC is a leading investigator of intellectual property abuse.
(2) Syma Tariq (market interviews), “Fake”, The Observer, July 18, 2004 [observer.guardian.co.uk/magazine/
story/0,11913,1262063,00.html ]
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