Luxury good knock-offs are a $225 Billion a year problem for the fashion industry. It has become so much of an issue that the New York City Council has introduced a bill that would punish the buyers of knock-off goods with a fine of up to $1,000 and up to a year in jail. Currently, “in France if you are caught not just purchasing, buying, but carrying a counterfeit anything you can go to jail and be fined up to €360,000,” said Valerie Salembier, former publisher of Harper’s Bazaar who now runs the nonprofit Authentics Foundation, and as first reported by Good Morning America.
It is commonly understood that many of the imported counterfeit goods coming to the U.S. originate in China. In fact, the seizure statistics released by CBP and ICE bear that out. According to those numbers, for the 2011 fiscal year, there were 24,792 seizures worth a manufacturer’s suggested retail price (MSRP) of US $1.1 billion. In fiscal year 2012, 22,848 shipments were seized worth an MSRP of $1.2 billion. In 2012, a jaw-dropping 72% of all seizures originated with goods exported from China. Hong Kong is next accounting for only 12%, followed by Singapore and India at 1% each, and then the rest of the world. In 2011, China also accounted for the same staggering 72% of all seizures, followed by Hong Kong at 14%, India, Pakistan, Switzerland and Taiwan at 1% each, and then the rest of the world.
So, it was somewhat ironic to see the July 31, 2013 press release issued by CBP. It summarizes the results of a joint intellectual property rights enforcement operation between the customs agencies of China and the U.S. The month-long operation was focused on consumer electronics articles and seized some 243,000 items. China’s Vice Minister of the General Administration of China Customs is Zou Zhiwu who was quoted as saying: “IPR infringement is a global issue … [that] … threatens the health and safety of consumers. Enforcement agencies around the world should work more closely to crack down [on] these illegal activities. China customs has been making unremitting efforts to promote international cooperation in this field.” His statement could have come from an American customs official!
This effort was also reported to have resulted in the arrest of a New Orleans area U.S. citizen who repeatedly imported counterfeit headphones and was the result of a referral from China Customs to CBP and ICE. This joint operation is also described to be a result of the effort between the two customs agencies to work cooperatively. Supposedly more joint operations are planned.
While this operation focused in the electronics field, one has to wonder how quickly it will spread to other commodities and industries and to further protect American ingenuity?