Solving the Problems Counterfeiting Creates for the Global Economy
Event held Wednesday, 5 November 2014
According to an OECD report, counterfeiting costs the global economy between $200 billion and $600 billion dollars US per year. The problem spans a broad range of sectors from pharmaceuticals, to official documents and forged currency. Counterfeited goods fund organised crime, global terrorism and also pose personal safety risks to consumers.
This meeting was held in conjunction with the Industry and Parliament Trust and the support of the Global Uncertainties project to discuss the problems counterfeiting poses to business and what steps policy makers can take to fight this crime.
- A crime as old as civilisation not well understood and very difficult to deal with ……..the proceeds often funding terrorism and organised crime.
- It is a much wider and deeper problem than people think, and estimates by the OECD suggest losses between 200B$ to 600b$ a year.
- This crime has many hidden harms not just the obvious loss of profit to the manufacturer or the loss of integrity to the government.
- A false passport is a so called ‘golden breeder document’. Once you have that you can get everything else the state provides.
- In the commercial world counterfeiting leads to the corruption of supply chains. Once corrupted the proceeds of Organised Retail Crime, hijacking and repackaging of faulty and substandard products also becomes much more possible. If you buy goods off a street trader you might expect problems, but if buy online, or from high quality retailers you expect to be safe but this is not always the case even if the retailer is honest but the supply chain has been corrupted.
- One area of interest is the counterfeiting of electronic components particularly silicon chips. You might think this was impossible or uneconomic and although you do see copies or simulations of chips, much more often you see devices reclaimed from scrap equipment, given a spray and some new serial numbers sold as new. You also see manufacturers rejects stolen and sold as full specification even though they are slower, and may fail prematurely…………these have been found in fighter planes, main battle tanks, cars and medical equipment, with obvious potential fatal consequences.
- In the pharmaceutical industry, the counterfeits that are not just chalk or toxic often contain an active ingredient. Although this sounds harmless, it can be the wrong active ingredient or in the wrong amount.
- One contact reports seeing drugs being produced with cement mixers. The inconsistency being so great that pills in the same blister pack could have 2% of the dose or 50% or 10 times or nothing! Such crimes lead to early resistance for infectious diseases and millions of premature deaths.