Counterfeit electrical goods have genuine safety risks
Europe is increasingly being targeted by sellers of counterfeit goods, placing unwitting consumers at risk and funding organised crime.
From Left to Right: Gitte Schjøtz, President International at UL, Märt Loite, Counsellor for Economic Affairs, Permanent Representation of Estonia to the EU, Chris Vansteenkiste Head of IPC3 Crime Unit at Europol, Lucy Anderson MEP, Martyn Allen, Head of Electrotechnical Division at Electrical Safety First, Helge Kleinwege, Policy Officer, Intellectual Property and Fight against Counterfeiting at DG Grow, European Commission | Photo credit: The Parliament Magazine
Europe is being targeted as a market for unscrupulous vendors of counterfeit goods, looking to make fast profits at the expense of consumers. This was the message from a recent briefing in the European Parliament, hosted by MEP Lucy Anderson, entitled “Consumers and Businesses at Risk: Counterfeit Electrical Products Across Europe”.
Anderson told participants that she had already raised the issue of electrical safety and counterfeiting with the European Commission in 2016. The purpose of this event, she explained, was evident from the title, saying; “We know that consumers and businesses are at risk; it’s in everyone’s interest to tackle the problem.”
Attendees heard of the growing scale of the problem in Europe. They discussed counterfeiting as no longer the simple infringement of intellectual properly, selling cheap copies of t-shirts and wristwatches from market stalls. Speakers highlighted increasingly sophisticated operations, with strong links to organised crime.
Criminals are now targeting electrical goods, from domestic appliances to high-end handheld devices, with items sold from highly convincing websites and using seemingly authentic packaging and conformity marking. Yet many of these fakes can lack even the most basic of safety features that consumers take for granted.
Opening the event, Anderson pointed out that more than five million counterfeit goods had been seized by customs authorities during 2015, a worrying increase of 15 per cent over the previous year. In addition, more than a quarter of these were electrical goods, the majority of them from China.
Anderson underlined the importance of dealing with the influx of goods. Globally, the trade in counterfeits during 2015 was more than €330bn, with much of the proceeds funding organised crime.
Helge Kleinwege, Policy Officer in the European Commission’s Intellectual Property and Fight Against Counterfeiting Unit, confirmed the scale of the problem. Some 14 million fake smart phones – more than eight per cent of total sales – were sold in the EU in 2015.
He explained that the Commission was working to improve voluntary cooperation between the holders of intellectual property and the intermediaries that distribute goods. However, the complexity of supply chains and the range of sales platforms – including online retailers – make it a challenging task.
IP enforcement is not enough in isolation to deal with the problem; other actors must become involved. To this end, Kleinwege explained that the Commission has a number of active work streams to deal with the problem. One of these includes integrating counterfeit protection into other policy, with the others addressing standards and certification as well as applying ‘blockchain’ technologies. The Commission will provide further details on these actions in a forthcoming publication.
Martyn Allen, Head of the Electrotechnical Division of Electrical Safety First, a UK-based charity dedicated to reducing deaths and injuries from electrical accidents, explained how easy it can be to be taken in by counterfeit goods. He showed examples of the kind of electrical goods seized recently in the UK, including personal care items such as hair straighteners.
Although counterfeit items were shown to often be outwardly indistinguishable from the genuine articles, they put users at substantial risk. “Effective safety costs money and offers counterfeit vendors no incentive; they are motivated solely by profit,” he said. He reemphasised the link between counterfeit sales and organised crime and called for a collaborative effort from stakeholders, with “a greater priority on electrical goods.”
Gitte Schjøtz, President, International at UL, a safety, security and sustainability company that verifies claims through tests, inspections and certification, set out her organisation’s work on helping prevent counterfeits from reaching consumers.
Schjøtz explained UL’s three-pillar approach. The first pillar is based on education, working to educate children and teachers on how to be ‘safety smart’ through a collaboration with Disney. UL's not-for-profit parent, UL Institute, conducts independent research to promote safety education.
The second pillar is based around enforcement, with a dedicated team to oversee enforcement of intellectual property to ensure that offending and non-compliant items are removed from the supply chain. Public – Private partnerships are critical to the fight against counterfeiting, and form the basis of UL’s third pillar.
As part of this, UL International also partners with Interpol. Together, they created the International IP Crime Investigators college, now a leading free, anti-counterfeiting training institution. It is also working with Europol on a training and development seminar for enforcement officials in September.
Schjøtz stressed that the stream of new technology – particularly in-demand electrical items – poses an increasing attraction for potential counterfeit vendors. She offered the example of the recent craze for ‘hoverboards’, which had in one case led to the seizure of 16,000 units in a single location.
She also pointed to the potential weaknesses in self-regulation, noting that the Dutch Government – responsible for Europe’s largest port – had recently been critical of the CE marking system.
Speaking on behalf of Interpol was Chris Vansteenkiste, Head of the IPC3 - Intellectual Property Crime Coordinated Coalitions – Unit. He and his team handle high-level IP operations, covering areas such as pharmaceuticals, pesticides and internet-related intellectual property crime. He showed a number of false websites, purporting to be storefronts for household names.
He also warned of the wider consequences, saying; “False trade attracts organised crime; there is no difference between the motivation of those involved in drug trafficking and knowingly selling counterfeit goods.” The problem is not simply about manufactures, he stressed; the vast majority of profit is made by vendors in Europe, which have often paid a minimal amount for the goods they sell.
He also urged authorities to make it easier to report potentially dangerous goods, stating that; “too often consumers do not know where to go and simply dispose of purchases. Making it simpler would help authorities trace sources more effectively”.
The closing speaker was Märt Loite, Counsellor for Economic Affairs and Head of Section, at the Estonian Permanent Representation. He offered the perspective of his national government, which takes over the rotating presidency of the EU in July.
Loite shared that the Estonian government plans to look closely at the digital aspects of counterfeiting. He stressed the importance of consumer trust in online sales and reminded the audience that, “once you lose their trust, it is difficult to regain it.”
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