Christmas is the most important time of the year for western retailers, who make a huge portion of their profits in the lead-up to the holiday season. In the US, the festive period brings in around 20% of the industry’s annual sales, a figure not dissimilar to that seen in other developed countries in which the festival is celebrated. As well as being the busiest time of year for retailers, Christmas also represents a huge opportunity for organised criminal groups behind counterfeiting operations. With consumers in markets such as Britain and the US signalling their intention to spend less over the coming holiday period, producers of fake items will be hoping to take a larger share of the billions of dollars spent on Christmas gifts than ever this year, as hard-up buyers look to make savings. Evidence that counterfeiters have been gearing up for a bumper yuletide trade has been mounting for weeks, with law enforcement agencies in a number of countries warning consumers to be on the lookout for counterfeit products.
In Ireland, regulators have cautioned Christmas shoppers against buying fake high-end cosmetics purporting to be from popular brands such as Urban Decay and Kylie Cosmetics by Kylie Jenner. American consumers have been complaining that fake versions of popular robotic monkey toy Fingerlings are being sold on legitimate platforms including Amazon.com and Walmart.com. Elsewhere, UK law enforcement agencies have warned consumers to avoid all manner of counterfeit branded items after British Border Force investigators seized numerous fake products at ports and airports over the course of the last month or so, including tens of thousands of bogus Calvin Klein underpants estimated to be worth more than £1.5 million ($2 million). While these types of warnings may have some impact on consumers at risk of picking up fake products inadvertently while shopping around for the best price, they will likely have little effect on buyers who feel comfortable spending their money on counterfeit items so long as they make a saving. What these people often fail to realise is that as well as depriving rights holders and product innovators of royalties, purchasing fake goods can also put the health and safety of their loved ones at risk, and contribute to the profits of criminal groups that are involved in far more unsavoury activities than just counterfeiting.
While a knock-off pair of underpants will be unlikely to do much damage, some counterfeit products can cause life-changing injuries or even death. Fake cosmetic products have been found to contain a number of toxic ingredients including cyanide, arsenic, paint-stripper and faeces. While the application of some counterfeit make-up may result in its wearer developing a rash or some other relatively minor skin irritation, other fake cosmetics may contain ingredients that could have a long-lasting effect on the central nervous system or the brain. Bogus electrical goods can pose an even greater risk. As counterfeiters are able to produce these items without following the costly and time-consuming internationally-recognised regulatory standards that legitimate manufacturers must follow by law, the safety of the end user is typically an afterthought at best. Fake electrical products have been known to catch fire or even explode, leaving their owners exposed to the possibility of serious injury or loss of life. The organised criminal groups that produce counterfeit consumer goods care only about profit, and not one jot for the health and safety of buyers.
In many cases, the groups behind counterfeit products are also involved in other types of serious and organised crime, including drug trafficking, people smuggling and even international terrorism. Back in 2010, two US men were jailed for working with a counterfeiting ring linked with Iranian-backed Islamist militant group Hezbollah. Other terrorist organisations such as the IRA and al-Qa’ida have also been known to make significant sums of money from fake goods that are often made in illegal factories in countries such as China before being sold to consumers in the west. So while some consumers may view buying the odd knock-off pair of sunglasses as a harmless way to save a bit of money, in reality their purchase could help pay for major terrorist incidents such as the 2015 attack on the Paris offices of French satirical magazine Charlie Hebdo, which is thought to have been at least partly funded by the sale of counterfeit goods.
Consumers keen to avoid inadvertently picking up fake products while doing their Christmas shopping can look out for a number of giveaway signs that may indicate a possible purchase might not be all it appears. If the price of an item seems too good to be true, more often than not it will be. Shoppers should also look out for products that come in poorly-made packaging with misspelled labelling, or branding that differs slightly from that used by the company which makes the genuine article. Most importantly, consumers should always buy from reputable retailers that offer a returns policy. Paying for cheap goods from questionable overseas sites, dodgy sellers on auction platforms or street vendors will make it much less likely that consumers will be able to get their money back if something goes wrong.
EU customs workers seized 31 million bogus products at borders last year
EU customs officials seized more than 31 million counterfeit products at the 28-nation bloc’s external border in 2017, new figures released yesterday by the European Commission have revealed.
The items had an estimated a street value of over €580 million ($672 million).
While the number of smuggled items discovered at the border was down compared to the previous year, potentially-dangerous bogus goods such as healthcare products, medicines, toys and electrical items made up a higher proportion (43%) of all seizures.
Fake food and drink items accounted for the greatest proportion (24%) of all counterfeit goods seized across the course of the year, followed by toys (11%), tobacco products (9%) and clothing (7%).
The Commission said 65% of all seized counterfeit items entered the EU by boat, typically as part of major large consignments.
Fourteen percent of fake products were brought into the EU by air, while counterfeit items smuggled into the bloc by courier traffic and postal traffic jointly accounted for 11% of all seizures. These were mostly made up of consumer goods ordered online such as shoes, clothing, bags and watches.
Overall, the total number of fake articles seized across the course of 2017 decreased by 24% compared to the previous year.
Commenting on the release of the new figures, Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs said: “The EU’s Customs Union is on the front line when it comes to protecting citizens from fake, counterfeit and sometimes highly dangerous goods.
“Stopping imports of counterfeits into the EU also supports jobs and the wider economy as a whole.
“The European Union stands in support of intellectual property and will continue our campaign to protect consumer health as well as protecting businesses from criminal infringement of their rights.”
While China again remained the primary country of source for fake goods entering the EU, the greatest quantity of counterfeit clothing originated from Turkey last year.
Hong Kong and China were the source of the majority of counterfeit mobile phones and accessories, ink cartridges and toners, CDs/DVDs and labels, tags and stickers that entered the EU in 2017.
Elsewhere, India was the top source of counterfeit pharmaceuticals.
In a statement, the Commission said: “This year’s figures highlight the importance of the measures presented last year by the Commission to ensure that intellectual property rights are well protected, thereby encouraging European companies, in particular SMEs and start-ups, to invest in innovation and creativity.”
Indian officials rule out gold import fee hike over smuggling fears
The Indian Government has said it is considering taking action to slow the importation of gold into the country, but wants to avoid an increase in importation duties due to fears over smuggling.
A source told India’s PTI news agency that officials are instead considering alternative policy interventions to curb imports, which are having an adverse effect on the value of the rupee.
“There is not much scope for hike in import duty on gold,” the source said.
“Rather, it would be some kind of policy measures to reduce gold import. Higher import duty on gold may increase smuggling activities.”
While failing to specify the measures the Government is considering, the source said raising import duty on gold so close to the festive season would likely result in an increase in smuggling attempts.
Indian officials are due this week to announce a new list of items that will be subject to importation limits as part of wider efforts to cut the country’s growing current account deficit, and stem the fall of the rupee.
A comprehensive list of non-essential items are being considered, including steel, finished steel, furniture, electronics and a number of food items.
The smuggling of gold into India has rocketed over recent years after the Government hiked import duties to 10% in 2013 as part of an earlier effort to cut the country’s current account deficit.
According to the World Gold Council, traffickers smuggled some 120 tons of gold into India last year, with nearly the same amount expected in 2018.
After searching the flight steward, customs officers discovered gold weighing 1.05kg worth an estimated 3.1 million rupees ($50,000), according to the airport’s Joint Commissioner of Customs Anubha Singh.
Commenting at the time, a Singapore Airlines spokesperson confirmed that a member of its cabin crew staff had been detained by Delhi customs authorities, adding: “Singapore Airlines will provide full co-operation to the investigating authorities. We are unable to provide details of the crew member concerned due to confidentiality reasons.”
Nigeria, Niger and Benin to hold counter-rice smuggling summit
Ministers from Nigeria, Niger and Benin have agreed to meet to discuss the growing problem of rice smuggling in the region.
Speaking with reporters on the sidelines of an event held in Abuja to mark the anniversary of Nigeria’s independence, Benin ambassador to Nigeria Paulette Yekpe said the smuggling of rice and other products posed a threat to relations between the countries.
She said that while the Economic Community of West African States (ECOWAS) protocol had paved the way for free movement within the region, local countries have a responsibility to do more to crack down on rice smuggling and other crimes.
Observing how Nigeria and Benin have historically worked together to improve border security, and noting that the smuggling of rice poses a threat to ties between the two nations, Yekpe said: “[W]e have decided to have a tripartite meeting with Niger, Nigeria and Benin to discuss and find a way to address rice smuggling.’’
She added that while a date for the summit had not yet been agreed, discussions were taking place to organise it.
Speaking separately, Ita Enang, Senior Special Assistant to President Muhammadu Buhari, said Nigeria and Benin needed to work together to tackle smuggling.
“We have been having problem in illegal trade in rice and other imported goods from Benin Republic,” the APA news agency quotes Enang as saying.
‘‘I think it has been well conducted in a manner that does not dare us to say what will Nigeria do? It is rather caused by a few of our businessmen.
‘‘The government of Benin Republic has been interested in making sure that the kind of trade that goes on between the two countries is very great, because we are the best of neighbours.’’
In June, the Nigeria Customs Service (NCS) announced it had joined forces with the Nigerian Air Force to deploy drones in a bid to combat the smuggling of rice and other contraband items across the country’s borders.
Commenting on the planned deployment of the new drones, NCS Deputy Head of Enforcement, Investigation and Inspection Aminu Dangalidima said: “The issuance of the vehicles is part of the Federal Government’s support to curtail smuggling of prohibited items, especially rice.
“With this robust support coming from the Federal Government, the Nigeria Customs Service is in a better position to deal ruthlessly with the enemies of Nigeria’s security and economic prosperity.
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