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Dubai Customs resolves 390 IP disputes, recycles counterfeit goods for 221 brands in 2022

ITIC Dubai Customs resolves 390 IP disputes, recycles counterfeit goods for 221 brands in 2022
Archives, Global Trade Daily, International Trade, News

Dubai Customs resolves 390 IP disputes, recycles counterfeit goods for 221 brands in 2022

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Dubai Customs, represented by the Intellectual Property Department, resolved 390 IPR disputes that included 14.788 million counterfeit items in 2021. The Department also recycled 2.112 million counterfeit items for 221 brands, and registered 437 new trademarks and 189 trade agencies last year.

To raise awareness around the importance of intellectual property rights, the IPR Department organized 8 community awareness activities and 11 events for schools and universities, and organized 10 workshops on combating counterfeiting in cooperation with trademark owners.

“We are continuously developing our skills and performance to combat counterfeit goods and prevent their entry into our local market with the help and cooperation of our strategic partners,” said Yousef Ozair Mubarak, Director of IPR Department. “At the same time, we are active in raising awareness around protecting and preserving intellectual property rights, and towards this end we organize lectures targeting all social segments and target customs inspectors with training workshops to help them gain more hands-on experience on how to recognize genuine products from fake ones. Combating counterfeiting will help protect the society from the hazards of counterfeit goods, and attract more investments into the country.”

About Dubai Customs

Dubai Customs is one of the oldest governmental departments. Previously known as farada (collection of taxes and duties imposed on the imported goods), Dubai Customs was named “The Mother of the Departments” for its long history. Some current governmental departments took offices in the old customs building and were financed by the revenues collected by the customs department. The departments developed to have their own buildings later on.
With more than 100 years in operation, Dubai Customs went through several phases before institutionalization in the reign of the late Sheikh Rashid bin Saeed Al Maktoum, who has established an official office to manage Dubai affairs in the first floor of the customs building. This reflects the importance of the customs department and its position in the Emirate of Dubai renowned for trade and traders.
Dubai Customs continued the organizational development and gained good reputation at the regional and international levels. By virtue of its advanced infrastructure and state-of-the-art management facilities and services, Dubai was a destination of choice for investors and businessmen. On 1 April 2001, Dubai Customs entered a new stage when the Late Sheikh Maktoum Bin Rashid Al Maktoum, Ruler of Dubai issued Law No. (1) Of 2001 establishing the Ports, Customs and Free Zone Corporation i.e. merger of Dubai Customs, Dubai Ports and Free Zone Authorities.
On 1 May 2001 HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice-president, Prime Minister and Ruler of Dubai, who was then Crown Prince of Dubai and Minister of Defense and President of the Ports, Customs and Free Zone Corporation issued a decree appointing Sultan Ahmed Bin Sulayem as an Executive Chairman of the Corporation. Being a part of a major corporation contributing to Dubai’s economy, Dubai Customs started to reconcile its new organizational position. To do so, a comprehensive review to its structures and operations was conducted.

 

 

 

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Archives, Global Trade Daily, News

Dubai Customs Confirms Seizure of 1.5 Tons of Prohibited Captagon

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Dubai Customs confirmed a successful start to 2022 with the thwarting of the country’s largest haul of crushed captagon, known as an illegal stimulant, earlier this week according to a recent release.

A whopping 1.5 tons of the substance was discovered by duel efforts by the Customs Operations Room at the Sea Customs Center Management and the customs port control project, Siyaj. This successful inspection and protective outcome further positions Dubai Customs and its affiliated partners as leaders in protecting consumers and markets from illegal and potentially harmful materials, substances, and products.

“Safety and protecting our society is a strategic priority,” said H.E. Sultan bin Sulayem, DP World Group Chairman & CEO and Chairman of Ports, Customs and Free Zone Corporation. “This balance between protection, safety and security from one side and facilitating trade and tourism activity is not compromised. Dubai Customs’ people are very professional and always on the lookout for any illegitimate and suspicious activity without disrupting shipment clearance operations. This operation is an example of what we do to secure our borders. Dubai is, and will always remain, a safe place for investment and trade following the wise directives of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, and in fulfillment of the emirate’s bold plans and projects.”

Counterfeit and illegal products and substances are an added layer of potential disruption along the supply chain, particularly for customs clearance and affiliated operations. Dubai Customs proves once again the importance of reliable partnerships as a key driver throughout the process. Thwarting the clearing of such substances is not new for Dubai Customs, though. In 2019, an estimated 10.715 million pills in a matter of months.

“Dubai Customs never ceases to develop and improve their inspection systems. We have plans set to monitor, follow and intercept high-risk shipments, supported by our highly trained inspectors and sophisticated systems and devices.”

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Archives, Global Trade Daily, Special Reports

Washington Cannot Let Amazon Water-Down Consumer Protection Legislation

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The holiday season is a reminder that with more Americans than ever heading online to do their shopping, lawmakers must continue taking action to prevent consumers from falling prey to internet scammers. That’s why it was welcome news when Amazon recently reversed course on its longstanding opposition to bipartisan consumer protection legislation in Congress that would require third-party online marketplaces to verify independent sellers, with the goal of reducing counterfeits and stolen goods from these platforms.

But while Amazon’s public change of heart seemingly paves the way for the eventual passage of the bill, known as the INFORM Consumers Act, lawmakers must ensure that the retail giant and other tech companies do not work behind the scenes to water down the legislation and render it toothless. Counterfeits pose great harm to consumers and small third-party sellers, and Congress must pass strong, comprehensive enforcement mechanisms to adequately protect both groups.

Amazon’s decision to endorse INFORM was certainly a surprise. Just this summer, Amazon launched an aggressive lobbying campaign to kill a more robust version of the legislation. But while Amazon ostensibly supports the current bill, it has reportedly unleased its lobbyists in the Beltway to weaken it. While lawmakers such as Sen. Dick Durbin, one of the bill’s co-sponsors, say they refuse to let this happen, they should remain on high alert.

This is because we’ve seen Amazon’s playbook for publicly supporting legislation while simultaneously working to weaken it behind the scenes. For instance, Amazon CEO Jeff Bezos won praise earlier this year when he embraced President Biden’s plan to raise the corporate tax rate. But behind the scenes, the company enlisted an army of lobbyists to maintain the research and development tax credit, which has been estimated to save the company hundreds of millions of dollars a year. As I’ve said before, Bezos’s support for a corporate tax hike is meaningless if the company can continue to engage in egregious tax avoidance schemes.

And it’s not just Amazon; other Big Tech companies have resorted to similar “two-faced” tactics to weaken legislation. In April, an investigation by The Markup uncovered how some of the country’s most powerful technology companies, including Facebook and Google, advocated for mostly toothless privacy protection legislation in statehouses across the country — all with the intention of preempting state lawmakers from taking stronger action in the future.

Now with the prospect of a comprehensive consumer protection measure being signed into law, Congress must resist Amazon’s arm twisting. Counterfeits are far too serious of a threat, and watered-down legislation will fall short of creating the bold transparency measures that are desperately needed. Online counterfeiters have been known to peddle toys and children’s products, putting those most vulnerable in grave danger. These products fail to go through robust safety testing, meaning there is potential for serious health consequences.

But what many may not realize is the impact that counterfeits have on third-party sellers. As someone who works with Amazon sellers every day, I know exactly how legitimate businesses suffer when criminals sell fakes at below the market value. Small businesses are doing everything they can to fight these criminals — even if it means spending hundreds of thousands of dollars to do so.

Many of those selling fakes from the comfort of their own homes and hurting American businesses are overseas. According to the Department of Homeland Security, a staggering 85 percent of contraband items seized by U.S. Customs and Border Protection came from Hong Kong and China. Nonetheless, Amazon’s marketplace has become a hub for China-based sellers.

Amazon has no problem touting all of the measures it has taken to clean up its third-party marketplace. But, as I have explained, it’s a common tactic of Amazon’s PR department to just share the numerator — and not the denominator. Thus, the $700 million it invests to fight fraud is pennies in the bucket when you consider that Amazon’s worldwide gross merchandise volume is estimated to be $490 billion.

It is critical that Congress advances the INFORM Consumers Act as it stands today. While I welcome Amazon’s endorsement of the common-sense measure — along with the other third-party marketplaces that recognize the benefits it would bring to e-commerce shopping — I can only hope it is sincere. Working behind the scenes to weaken this bill will be devastating to the millions of shoppers and sellers who have come to depend on Amazon’s third-party marketplace.

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Jason Boyce is the author of “The Amazon Jungle” and founder of Amazon managed services agency, Avenue7Media. Previously, Boyce was an 18-year Top-200 Amazon seller.

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Archives, Global Logistics, Global Trade Daily

Cutting Through Counterfeiting: Do Amazon’s Measures Go Far Enough?

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When Amazon starts fighting counterfeiting, you know it’s time to pay attention.

While counterfeiting has long been a controversial – and often undiscussed (at least in public) – subject among brands, Amazon’s recent efforts to identify and stop counterfeiting on its platform are bringing it to the forefront.

Especially in the midst of COVID-19, Amazon has exploded in popularity as a go-to, one-stop-shop for many consumers looking to get the products they need quickly and safely. The rising popularity of Amazon has also made it even more of a prime target for counterfeiters, and the mega-retailer is facing notable scrutiny and multiple lawsuits over the struggle to stop them. For example:

-Nike recently made the decision to stop selling direct products through Amazon, citing “unlicensed and imposter sellers as a contributing factor,” according to The Verge.

-3M instigated multiple lawsuits against sellers for selling counterfeit 3M masks on Amazon.

-Five foreign Amazon markets were put on the White House’s annual “notorious markets” list in 2020.

Even prior to the explosion of e-commerce during the pandemic, Amazon was already attempting to contain rampant counterfeiting on the platform. The Verge reports that, in 2019, Amazon spent $500 million to fight fraud, abuse and counterfeit products; shut down 2.5 million suspected bad actor accounts; and removed 6 billion suspected bad listings.

And it’s not limited to Amazon: Counterfeits are a global problem, and e-commerce retailers are especially at risk. Inc. states that global sales of counterfeits are growing by 15% each year and are projected to reach $1.32 trillion in 2020; e-commerce makes up more than a quarter of this figure. E-commerce sites like eBay, Newegg and Walmart have also been accused of selling counterfeits, although they claim they have strict procedures to fight counterfeiting, according to The Atlantic.

Product fakes and knockoffs hurt brand reputation, top-line revenue and profitability for companies, ultimately leading to lasting and sometimes irreparable damage. Counterfeiting isn’t just a small-time business, either, with organized crime beginning to play a bigger role. As counterfeiters become more sophisticated, brands also need to become more sophisticated in their efforts to stop it.

Conquering Counterfeiting with Innovation

E-commerce platforms like Amazon are taking some steps in recognizing the problems and establishing anti-counterfeiting programs, but these efforts may not go far enough for brands. All too often, despite their efforts, most consumers are left to fend themselves as marketplaces declare “caveat emptor” – buyer beware.  Authentication solutions should not only be able to prove the legitimacy of the product to the consumer, but also provide opportunities for the consumer to engage directly with the brand in new ways.

To create an effective authentication strategy, manufacturers need:

Holistic solutions that can provide visibility across all their products.

Amazon’s smart labels offer a way for customers to verify that products sold on its platform are real – but what about the products manufacturers sell on other sites or in brick-and-mortar stores? Protecting just one part of the supply chain isn’t enough. Investing in a configurable solution allows your company to provide a safety net to all consumers, whether they buy your product on an e-commerce platform like Amazon or at a local retailer.

For manufacturers selling through multiple channels, using an overarching smart label system across all products provides a single, traceable solution for verification – and a common way to interact with customers regardless of the channel they choose. By assigning a unique smart label to each product in their inventory – not just those sold on a single retail site – brands are more likely to spot counterfeiters who steal and attempt to copy the same smart label onto a batch of faked goods.

Authentication solutions that tackle counterfeiting while also growing customer engagement and loyalty.

While some smart labels, like Amazon’s, only exist to prove the legitimacy of a product, brands can leverage custom smart labels to provide a wide array of information, resources and lines of communication for customers. These codes can link customers to important product information like nutritional facts and recipes, how-to guides, allergen information, drug information, support and FAQs, return processing, warranties, and product registrations. When a customer engages with the label, they’re not just getting the assurance that the product is legitimate – they’re building a stronger relationship with the brand with every scan of their mobile device.

One Tool Manufacturer’s Approach to Anti-counterfeiting

For one LocatorX customer, a maker of home remodeling tools, the urgency of the counterfeiting issue became all too real in the wake of the pandemic. With more people spending their time at home taking on remodeling projects, the company saw its sales spike in 2020 through home improvement retailers like Lowe’s, Home Depot and Ace Hardware. To keep up with demand, the company expanded sales to online retailers this year – including Amazon – and because of their brand’s popularity, immediately began to see knockoffs, copies and counterfeits of its products in the marketplace.

These fakes became a problem—they would be just close enough that the customer wouldn’t know it wasn’t the exact product until it was actually in their hand. Not only was the company’s brand reputation problem at risk, but the counterfeits opened up a safety issue–what if the fake tool literally doesn’t work?

The company is now fighting the fakes successfully with anti-counterfeiting smart labels, which will be affixed to all of its products moving forward. Customers can simply scan these labels with their smartphones to verify the product’s legitimacy on the spot. Beyond protecting customers against counterfeits, the smart labels also provide access to how-to videos to help customers make the most of their new products, enabling the company to build customer trust and earn loyalty over the long term.

Tracking Legitimacy and Success

It’s clear that counterfeiting is a global e-commerce problem, and one that will only continue to grow in the wake of the pandemic. Companies like Amazon are taking steps to address this growing threat, but a custom authentication solution offers distinct advantages to manufacturers.

The capabilities of today’s smart labels enable brands to avoid operational headaches and even potential lawsuits by keeping counterfeiters at bay, while also offering opportunities to engage with customers in ways that might have not been possible otherwise. It costs mere cents to place unique, traceable smart labels on each product – an investment that will pay off in dividends down the road.

As more consumers turn to online shopping for safety and convenience, brands need to be vigilant about ensuring product legitimacy, no matter where they sell their products. Organizations that make moves now to protect products across both brick and mortar and e-commerce can stay ahead of would-be criminals and unlock new ways to build a loyal customer base.

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Steve Maul is the Chief Revenue Officer for LocatorX. LocatorX technology enables brands and consumers to access an item’s current location and audit trail from its origin, protecting against theft, counterfeiting, and product diversion while increasing consumer engagement with manufacturers.

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Archives, Global Logistics, Global Trade Daily

A Coordinated Global Approach: Customs Recordation and Border Protection Program

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Counterfeiting is a global problem. And although the source of most counterfeits is China, in many cases, sellers and wholesalers outside of China are the driving force behind counterfeit goods. Developing and implementing a centralized and globally coordinated program is key to a successful anti-counterfeiting and brand protection effort.

Legal teams are well-positioned to identify the jurisdictions where anti-counterfeiting and brand protection efforts can have the greatest impact and value, and appropriately allocate resources that align with where the business is most profitable and has the most growth potential. They must carefully balance whether to target wholesalers and large distributors or shut down large and influential counterfeiting networks by sacking both suppliers and manufacturers. The former provides immediate relief, but the latter eradicates some of the most egregious culprits in the counterfeit supply chain.

Without global coordination, legal or business teams in disparate markets may act incongruously and duplicate efforts, using scarce resources while gaining limited value. Multinational manufacturing companies that maintain a lean legal team and a smaller intellectual property (IP) team realize multiple benefits and profit potential when following a centralized brand protection program.

Depending on the region, there are vast differences in the type of evidence needed, which IP rights must be asserted and the role proactive recordation with customs plays. Without coordination, this alone may cause self-inflicted harm to a business organization. A centralized and coordinated approach also empowers a business to “forum shop” and take advantage of the most favorable legal actions and jurisdictions available worldwide, such as ease of coordinating with law enforcement, strength of position in an administrative or court action, timeline, cost of legal services, nature and extent of remedies and potential damages.

Advancements in technology and software capabilities have made new, more efficient tools available for IP owners at a fraction of the cost. Examples include brand protection services that involve a single service provider for global monitoring of trademark applications and domain names and monitoring counterfeits and other IP infringements by third parties online. Many such services conduct large-scale takedowns of online infringement worldwide, which sends a strong warning to relevant online marketplaces and sellers. These services also lend insight into infringement and counterfeit trends (e.g., identifying the most targeted goods, destination markets and most popular marketplaces), making necessary and timely adjustments to brand protection programs.

A coordinated program provides higher quality data to evaluate the loss caused by counterfeits and infringing activities while tracking the impact on overall market share and sales globally. An effective coordinated anti-counterfeiting and brand protection program should provide immediate relief to a business globally and provides a better system for strategizing, implementing and evaluating anti-counterfeiting and brand protection enforcement efforts.

An effective customs recordation and border protection program is vital, as the real impact on any bottom line comes from coordinated and consistent efforts at the borders.

A common dilemma is that counterfeiting activities do not appear to subside despite increased resources and legal fees. Legal teams manage the tremendous transactional volume of enforcement actions, but business teams often fail to appreciate the outcomes and rarely buy in fully to brand protection efforts. The traditional approach of playing “whack-a-mole” with countless small and micro-sized factories located in China and other countries is not a viable long-term solution.

Fortunately, border intervention methods provide a better answer. When counterfeits and infringing goods are seized at borders, the risk of infringement and the impact on business can be measured because the counterfeits and infringing goods directly correlate to lost sales, harm to consumers, decrease in brand loyalty, and product liability risk.

When a legal team activates border intervention methods, it cuts off channels of trade for counterfeits; sets up roadblocks to importation and exportation; and amplifies legal and economic risks to wholesalers and distributors of counterfeits. Border intervention success means the costs of disseminating counterfeits go up, and so does the price of the counterfeit goods. We call this cycle the “bottleneck” approach.

Customs are best-positioned to disrupt the movement and transportation of counterfeits. Although it is practically impossible for customs to detect and seize all infringing products, most if not all customs programs have employed some form of risk modelling to improve both the success rate and accuracy of identifying and locating counterfeits.

The importance of customs recordation and seizures to a brand protection program’s success also makes it the ideal starting point for building up a globally coordinated brand protection program.

Start by following the money. Identify the most profitable and high potential destination markets of a business. It is essential to identify the jurisdiction and to understand the specific challenges at work within the market.

One common mistake is for brand owners to record too many trademark and IP rights. Instead, by focusing on the largest problems in each market, customs seizures may produce significant ROI.

If China is the primary source of counterfeits, it is necessary to record with Chinese customs. Unlike many jurisdictions, Chinese customs focus on inspection and seizure of outbound infringing goods. In recent years, over 90 percent of customs seizures concerning IP infringement were conducted against goods exported from China. Another reason to record with Chinese customs is that over 90 percent of IP related seizures were based on ex officio actions.

Centralized management of customs recordation and border protection actions begins with a holistic audit of trademarks and IP assets necessary and important for border protection; a standardized process to conduct customs recordation, training, authentication and seizures; a channel for timely sharing of information and knowledge; a mechanism to conduct coordinated releases and seizures globally for strategic reasons; and a system to evaluate the effectiveness of border protection efforts.

Customs recordation and seizures are an important part of anti-counterfeiting and brand protection efforts, but they are not independent of business operations, other legal functions and enforcement actions. Certain policies and procedures may elevate the performance of a coordinated customs and border protection program, including a global trademark and online infringement watch, a coordinated global approach to all enforcement actions, and a centralized and independent budget for anti-counterfeiting and brand protection.

Trademark and online infringement watch services are other tools to alert IP owners to new infringing trademark filings, domain registrations, and online offerings of infringing products. These services help IP owners take down counterfeits on the internet cost-effectively and efficiently.

With e-commerce sales of counterfeit goods, it is most efficient to tackle it with online brand protection services that provide digital solutions to automate monitoring, reporting, and takedown of counterfeit and infringing activities. This segment is proliferating, and prices are no longer prohibitive.

In conclusion, businesses should take a global approach to anti-counterfeiting and brand protection, specifically to customs recordation and border protection efforts. Mapping out markets and problems further identifies waste and adds value, and a brand protection program provides data for evaluation and further improvement while building a stable

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Archives, Global Trade Daily, International Trade

Guards Needed in the Group Chat: PPE and Counterfeiters

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WhatsApp is great. It’s so great, in fact, that it is the dominant messaging application in over 169 countries. If you’re one of its 2 billion users, you know the edge it has over other messaging apps. WhatsApp is appealing for several reasons: it has an easy-to-use interface; users can send messages, photos, video, and voice notes, and make voice calls; and perhaps most importantly, all of this is free.

Additionally, there are a host of features that appeal to businesspeople. Since WhatsApp works on Wi-Fi, it supports messaging and calling anywhere on the planet that a Wi-Fi connection exists. WhatsApp is platform agnostic. This eliminates the need for users to share the same operating system and connects any users on any smartphone, desktop, or laptop (contrast this with Apple’s iMessage, for example, which only allows iMessages to be transmitted between Apple devices). The ease of making connections via WhatsApp has facilitated relationships and potential partnerships between people that may have previously not been possible.

Separate from its features and connectivity, two primary advantages of WhatsApp are its speed and security. WhatsApp requires less bandwidth than other messaging apps. This means messages, photos, video, and voice notes are transmitted quickly. As the old adage “time is money” remains true, this gives WhatsApp a distinct advantage. Finally, WhatsApp provides end-to-end encryption of content. This means that only the sender and recipient can see messages and content.

WhatsApp’s speed and security advantages have come into play heavily during the worldwide pandemic. The United States is the largest importer of face masks, eye protection, and medical gloves, otherwise known as Personal Protective Equipment (PPE). However, it has experienced and continues to confront severe shortages. This is due in part to the overwhelming demand shock triggered by an acute need in healthcare and panicked marketplace behavior that depleted domestic PPE inventories. The interruptions in the global supply chain caused by covid only served to amplify this problem.

When PPE does become available, buyers are in a desperate race to acquire this very limited commodity. They have contracts to fulfill and end-users that have to be served. This is where WhatsApp helps buyers maintain an edge over their competitors. WhatsApp ensures that buyers and sellers have instantaneous access to the information regarding the availability of and demand for PPE, and can connect users from around the globe. There are a plethora of WhatsApp groups devoted entirely to the buying and selling of PPE. When sellers procure PPE, they post this information on these WhatsApp group chats. It’s a first-come, first-served arena, where the first buyer to purchase PPE that becomes available receives these coveted items.

A downside to the free-flowing information regarding PPE on WhatsApp is that this time crunch, pressure, and restricted supply in the PPE marketplace makes these WhatsApp groups a perfect breeding ground for counterfeiters. Sellers will post offers to sell PPE, claiming, for example, that the items are genuine 3M products. At times, sellers are aware that the items are counterfeit, but will make the claim genuine. Other times, the seller has been duped by a supply chain partner and is unknowingly offering counterfeit items. Finally, there are outright scammers who offer genuine products, take buyers’ money, but ultimately never produce the item. Buyers are not totally unaware of these pitfalls. However, they have contracts to fulfill. They must procure PPE for their customers. This has led to certain buyers being unable to employ meticulous business practices. In other words, when PPE is offered on the WhatsApp groups, buyers will often rush to obtain the product without doing adequate due diligence as to its provenance and authenticity.

Why is this such a big deal, you ask? Some PPE is better than no PPE, right? Not so fast. There is a counterfeiting issue as well as a healthcare issue to be considered. Counterfeiters do not operate under regulations. The products they produce are often of poor quality and do not work as advertised. As they are not regulated, they may use harmful, toxic, and dangerous chemicals in their materials. The profits from counterfeit products often go to fund criminal or terrorist organizations who trade in illegal drugs, child labor, human trafficking, and more. When money is funneled to counterfeiters as opposed to genuine brands, the genuine brand loses potential billions in revenue. This lost revenue has many trickle-down effects, such as forcing companies to make layoffs, resulting in increased unemployment. While some employees may re-enter the workforce, a significant number do so at a decreased salary, which can have an obvious devastating effect on personal financial situations, and others simply do not find work.

Further, as companies harmed by counterfeiters make less profit, they pay fewer taxes. These taxes are part of the reasons we enjoy clean cities, well-funded schools, healthcare, and protections such as police and firefighters. And as companies recognize that they are being targeted by counterfeiters, they dedicate time and money to fighting this threat. Money invested into anti-counterfeiting measures and legal battles diverts funds that could otherwise be spent on research, product development, and marketing, and can also result in price increases for consumers. The end result is one that impacts the company is potential lost sales as well as the consumer. A company focused on defense against counterfeiters does not devote its resources to creating new, exciting and beneficial products for consumers.

Now consider the effects of counterfeit PPE products. We can all agree that health care providers and other front-line workers are heroes. They are the individuals disregarding the possibly deadly effects of coronavirus to do their jobs and help those in need. They are the ones in the hospitals dealing with critically ill patients, in nursing homes and long-term residential facilities helping to care for the oldest and most vulnerable among us. They are the police officers, firefighters, and paramedics, who are often the first to respond to emergencies and expose themselves to patients in need of assistance. As they are doing their jobs and sacrificing so much for the rest of us, they rely on PPE to provide them with a layer of protection against this deadly virus.

Now consider when a first responder or health care worker is unknowingly using counterfeit PPE. Counterfeit products are often of inferior quality. As such, it will not operate as expected and will not protect the wearer or others from covid as effectively. In fact, it may be made of toxic chemicals and materials that will, instead of protecting the wearer, cause it harm. This can range from the asymptomatic transmission of the disease to vulnerable individuals, to long-term health effects to death. Now more than ever, as we rely on masks, hand sanitizers, and wipes to combat covid, counterfeit PPE presents a clear and present danger to public health and safety and must be combatted vigorously.

There are several steps that buyers can take to ensure they are buying genuine products and avoid contributing to the problems of counterfeit PPE. Best practices are those research and acquisition procedures that should be utilized at all times. This includes doing research regarding offers. Is the seller a genuine authorized manufacturer or seller? Can he or she prove this legitimacy? You can reach out directly to the manufacturer to verify this information. Additionally, buyers should request documentation that supports the seller’s claim and examine it closely for authenticity. If a seller balks at providing this information, it is a distinct indication of fraud.

Business owners often rely on instincts regarding the honesty and authenticity of sellers. However, instinct alone is not a solid scheme. Buyers must remain informed and abreast of developments in productions, supply, and fraud.  Buyers can subscribe to Google alerts to ensure timely reception of this data. They can compare this knowledge to the quantities and offers in WhatsApp groups. Is the seller offering an unusually large quantity that does not match what companies are stating is available? Are the terms of payment or delivery atypical and do not line up with projected prices and delivery timelines offered by the official press? Can the seller provide a resume and references that will vouch for his reliability? Even better, do business owners you know personally have had positive experiences with the seller? If a seller is unable to come up with verifiable references or has a less than stellar resume, they may likely be a scammer.

Finally, physical examination of a sampling of the product is a simple way to verify authenticity. Products that come in questionable packaging, are missing lot numbers, omit manufacturer’s information, contain misspellings, or are misaligned are very likely fakes. If the product is of poor quality, is inconsistent from one sample to another, or has atypical design elements, it can also be assumed to be counterfeit. Finally, a lack of certification or approval label on or within the packaging, as well as an abbreviated form on the product itself, is an unmistakable indicator of a counterfeit PPE product. More information is available from the National Personal Protective Technology Laboratory, which is a specialized group within the CDC that has made available on its website excellent materials and clear guidelines on how to look out for potential counterfeits.

As covid continues to rage across the planet, PPE remains a top priority for countries around the world. While the supply of PPE has somewhat improved from the earliest, darkest days of the pandemic, it continues to remain a product in high demand with limited supply. WhatsApp groups are still a fantastic way to receive information about available products and can give buyers an edge over other competitors. However, it also continues to be a platform for counterfeiters who persist in their efforts to offload fake products, which, in turn, put users, business owners, and genuine brands at risk. The smart business owner can continue to utilize WhatsApp to his advantage but must take precautions and remain vigilant in guarding against the threat of counterfeit PPE.

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Bernard Klein is the president of Almont Group Inc. A dedicated father of three, he finds time to run and box while running a successful company that helps clients’ source goods overseas.

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Archives, Global Trade Daily, International Trade

Social Media Solution to Counterfeit Culture

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Like so many of my peers, bored and stuck at home during the pandemic, I downloaded Tiktok. As I scrolled through the (admittedly addictive) videos of comedic bits and I came across one Tiktok that gave me pause. In the video, an unseen user unboxes a “Louis Vuitton” handbag.  But this handbag was not a real Louis Vuitton bag (which could range in price from hundreds to thousands of dollars) but, actually, a “dupe”. The video shows the authentic-looking shopping bag, box, ribbons, dust bag, and even fake receipts and certificates. The bag looks real, with logos, stitching, pattern, and design all intact. Following the hashtag, I discovered hundreds of other videos where users brag about and display their designer “dupes”. These items ranged from shoes to bags, accessories, jewelry, and even a water bottle!

It’s fairly easy to figure out the appeal of designer “dupes”. Millennials and Gen Z are both fully immersed in social media. They strive to create an online profile that is happy, successful, and affluent. Affluence is defined by vacations, cars, shopping, and status symbols. These status symbols vary from group to group, but we all are aware of the particular items and brands that indicate status. And we all want those items, both just to have them but also to show them off. The problem is, we can’t all afford them.

Enter the dupe. These knock-off and counterfeit items look identical to the real thing, but they are sold at a fraction of the cost. To the millennial or Gen Z buyer, it’s a great deal. They get their status symbol, show off to their friends online and in-person and maintain their image…all at a low, low cost! The best part, buyers figure, is that no one is getting hurt. That’s the part they get wrong.

Counterfeit products are often produced in factories run by organized crime. People working in those factories are subject to dismal, substandard working conditions. They work long, hard hours, and do not earn a living wage. These dangerous conditions and long hours can only be compared to sweatshops, long outlawed in the USA. Children are often employed at these sweatshops, forced to work at deadly jobs in unsafe environments.  With no regulations, toxic, cancerous, and harmful chemicals are often used in the production of counterfeit goods. The proceeds of counterfeit goods are used to fund human trafficking, drug trafficking, sex trafficking, and terrorist groups. Additionally, when consumers buy counterfeit products instead of purchasing from the genuine manufacturer, governments lose the tax revenue they would obtain from sales by the genuine manufacturer. These lost tax dollars could have been used to fund programs and changes in local communities that could improve the living conditions of the same people working to manufacture counterfeits.

Millennials and Gen Z are the “woke” generation. This is the consumer who is conscientious, educated, and willing to take a stand. They want to know the sources of what they buy and the policies of the brands they support.

When these consumers discover a brand or a company that has policies and procedures that align with their values, and they throw their support behind the brand, they can take a business from a small startup in a home to an IPO. Alternatively, should they discover that a company is violating their values or is dishonest in its practices, this generation of consumers can rain down fury. It takes one person to start a conversation that can mushroom into a movement that changes companies, leadership, and society as a whole. This woke generation—that seeks out information and is willing to fight for their values—seems at odds with the counterfeit culture. Why are they willing to buy an item that supports criminal ventures and the subjugation of workers? Why are they willing to use products containing chemicals that are potentially harmful both to workers and themselves?

Most brands spend thousands of dollars protecting their products’ authenticity as they move through the supply chain. They use covert, forensic, and digital strategies to detect counterfeit goods. They use tamper-proof seals, holograms, barcodes, security tags, QR codes, and micro markers, among other tactics. They train law enforcement agents to detect and seize fake products. They employ security experts to assess and manage risks. They engage lawyers to battle counterfeiters in the justice system.

For all the efforts expended and all the money spent, the one group businesses fail to engage is the consumer. Most companies do not make educating the consumer on the dangers of buying counterfeit goods a part of their strategy. These consumers, who are otherwise hyper-aware of product characteristics, may be totally unaware that a counterfeit purchase could be completely at odds with their otherwise conscientious buying habits.

To quote Michael Bierut, “The problem contains the solution.” Just as consumers may take to social media to show off a counterfeit purchase, social media can also be harnessed in the fight against counterfeit culture. Social media reaches more users than traditional advertising. It can be impactful, thoughtful, exciting, and memorable. Companies should take a two-pronged approach. First, companies should use social media to highlight the steps they are taking to improve their brand. Posting on the company’s social media pages, tagging other influential community members and supporters, and reposting messages that align with the company’s values are all excellent ways to position your brand as one that millennials and Gen Z can fully support.

The second tactic companies can employ is to utilize social media to educate consumers about the impact their counterfeit purchases can have on society. Companies can inform social media users of the effects their buys have and how they violate their conscientious purchasing habits by highlighting specific cases where human rights were violated, children exploited, toxins used, and companies or criminal organizations that are funded by counterfeit monies, among other harms.

The counterfeit culture, so casually and extensively displayed and flaunted on social media, can be countered. The consumer today is one that is willing to change. They will change their buying habits to support a brand that they connect with, is authentic, and has procedures and policies that line up with their own values. They will mobilize their friends and family to discourage practices that are distasteful, harmful, and detrimental to society. By harnessing the power of social media to connect with their consumer, companies can tap into that power, force, and energy to combat counterfeiters everywhere.

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Bernard Klein is the president of Almont Group Inc. A dedicated father of three, he finds time to run and box while running a successful company that helps clients’ source goods overseas. 

dubai customs
Archives, Global Trade Daily, News

Dubai Customs Announces First-Ever 24/7 Integrated Control System for Trade Security

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Thanks to a unique blend of artificial intelligence, drones, a K9 unit, and a rapid intervention team, Dubai Customs has officially launched the first integrated control system in the world. This system has been termed as the “Siyaj (Fence) Initiative” and fully supports efforts against counterfeit trade shipments while progressing trade operations.

“We feel proud today that our borders are more secure and our trade is streamlined following the wise vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai,” said HE Sultan bin Sulayem, DP World Group Chairman & CEO and Chairman of Ports, Customs and Free Zone Corporation.

“This initiative is an embodiment of the team spirit and the honest efforts that everyone at Dubai Customs always strives to maintain. We hope this initiative adds up to our cumulative work in the field to maintain the leading position the UAE enjoys worldwide.”

The Siyaj initiative relies on regularly updated data to effectively deliver the level of security it was designed for. Among the features found within the Siyaj system include a vessel that tracks and controls ships prior to their arrival at the port,  inspection systems, and a set of cameras and devices for surveillance.

These features work in tandem with the rapid intervention teams for a faster, more reliable action turnaround time. The continued efforts further reiterate the success of Dubai Customs in halting counterfeit items and protecting the security of trade operations.

“Dubai Customs plays a vital role in thwarting smuggling of drugs and other illegitimate goods. In this regard, we cooperate and coordinate with the relevant authorities worldwide to intercept any suspicious or hazardous shipments before they enter the country.,” Director General of Dubai Customs, Ahmed Mahboob Musabih said.

“Customs authorities in the UAE made 4,450 customs seizures in 2019, and this initiative will cement the security efforts following the vision of Dubai Customs of becoming the leading customs organization worldwide supporting legitimate trade. We highly commend the efforts behind this leading initiative which will not only enhance the security of our borders but will also facilitate trade and supply chains.”

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Archives, Global Trade Daily, News

Dubai Customs Tackles Counterfeit Goods Issue with Sustainable Approach

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Dubai Customs took piracy prevention and sustainable practices to a new level earlier this month when they recycled 1,906 counterfeit items including sports shoes, mobile headphones, and computers, according to a release from July 9th. This success represents one of many from Dubai Customs in addressing and putting a stop to the process of counterfeit goods in the region.

“The IPR Department works closely with different partners to curb counterfeiting in line with TRIPS agreement,” said Yousef Ozair Mubarak, Director of IPR Department. “The damage caused by counterfeit goods to the economy, environment, and even perhaps our overall quality of life should be something of a given for most people.”

“Perhaps Intellectual Property rights-holders are those most likely to feel the true pinch of this rogue industry, but when one considers the big picture it becomes clear that everyone is liable to be affected by counterfeiting and piracy,” he added.

Thanks to collaborative efforts between Color Code recycling company, CEO of Brand Owners’ Protection Group Malik Hanouf, and representatives from Air Cargo Centers Management, IPR Dispute Section, and External Relations Section, the items were successfully removed from further processing and used to support sustainable practices for the IPR Department at Dubai Customs.

“We take care of all information that helps us thwart all types of smuggling to protect our society from the hazards of illegitimate goods,” stated Shuaib Al Suwaidi, Director of Customs Intelligence Department. “Counterfeit goods are not welcome in Dubai and we work together with different partners to ensure they don’t enter the emirate.”

Photos provided by Dubai Customs

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Archives, Global Trade Daily, International Trade

TRADE IN COUNTERFEIT MEDICAL AND PROTECTIVE HEALTH GOODS SPIKING DURING PANDEMIC

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Making matters worse

As the coronavirus pandemic continues to alter lives around the world, predators have seen opportunities to exploit the global health crisis by marketing and shipping counterfeit medical equipment, devices, and pharmaceuticals. In the few months since the beginning of the pandemic, illicit trade in counterfeit medical goods is both widespread and global in nature.

Authorities in the UAE shut down two factories, finding 40,000 fake sanitizers that were actually body sprays. In Cambodia, authorities seized three tons of fake sanitizer and nearly 17,000 gallons of fake alcohol. Australia’s Border Force intercepted shipments of counterfeit and otherwise faulty personal protective equipment.

Playing whack-a-mole with counterfeit goods

EUROPOL has cautioned that fake blood-screening tests, sanitizers, and pharmaceutical products are increasing in volume in the EU as criminals take advantage of shortages of genuine medical products. EUROPOL is monitoring the trade in counterfeit and substandard products by “listening” to social media platforms, following conversations that mention fake products. The agency reports many new online platforms have cropped up in response to coronavirus to profit illegally from illicit trade in fake medical goods.

Enforcement activity has also ramped up in the United States in response to the significant increase in criminals attempting to capitalize on the pandemic. In mid-April, Immigration and Customs Enforcement (ICE) announced Operation Stolen Promise, a joint effort by experts in global trade, financial fraud and cyber investigations to combat smuggling of counterfeit safety equipment and test kits. The operation quickly shut down over 11,000 COVID-19 domain names for illicit websites. After seizing test kits at an Indianapolis express consignment facility, Customs and Border Protection (CBP) announced it is “targeting imports and exports — mainly in the international mail and express consignment cargo environments — that may contain counterfeit or illicit goods”.

More data, better enforcement?

In early May, ICE’s Homeland Security Investigations announced an unprecedented partnership with private sector companies including Amazon and Alibaba to combat price gougers and scammers online. But will the effort be sufficient? The pandemic has exposed how vulnerable consumers are and how difficult the challenges are for law enforcement, prompting new discussion of potential changes to data collection practices that will better safeguard consumers while aiding law enforcement. Policymakers are also considering ways to shift more burden to the private sector engaged in online sales and trade.

The Country of Origin Labeling (COOL) Online Act was introduced in the U.S. Senate on May 13. The sponsors noted that with the pandemic causing Americans to stay home, online commercial activity has increased, but that products sold online are not sufficiently transparent. The COOL Online Act would require that buyers of products sold online be told the country where the product was manufactured and where the seller is located.

CBP is currently conducting the 321 E-Commerce Data Pilot which requires private sector participants in the pilot program to transmit a significant amount of data to CBP regarding products shipped to the United States. What is yet unclear is whether companies in the supply chain and e-commerce ecosystems will be required to verify that the information submitted to CBP is accurate and whether they will be required to take the step of rejecting products or packages before facilitating shipment to the United States.

Such a requirement obligates private sector entities to take some measure to screen and prevent the export of non-compliant or suspect goods before they leave the country of export. Absent such an obligation, most, if not all, of the burden will remain on CBP – and its counterparts around the world – to protect public safety.

Countering the counterfeiters

Medical communities around the world are still grappling with a virus that has no known cure while law enforcement agencies work to combat the growing volume of counterfeit and substandard medical equipment and pharmaceutical goods marketed by criminals. Meanwhile, international crime watchdog INTERPOL has ominously issued a warning that it expects global markets to be flooded with fake pharmaceuticals as soon as a vaccine does become available.

The policy landscape continues to shift in various ways in the wake of this health crisis. Governments are actively engaging with the private sector regarding potential changes to the collection and sharing of data — and, how both should act on that data — to more effectively prevent counterfeit and illicit goods from even leaving the country of origin in the first place.

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Tim Trainer

Tim Trainer was an attorney-advisor at the U.S. Customs Service and U.S. Patent & Trademark Office. He is a past president of the International AntiCounterfeiting Coalition. Tim is now the principal at Global Intellectual Property Strategy Center, P.C., and Galaxy Systems, Inc.

This article originally appeared on TradeVistas.org. Republished with permission.