EU to crack down on counterfeiting

By Simon Pitman

- Last updated on GMT

Related tags: European union

The European Commission has adopted a directive to combat
intellectual property offences against consumer goods, including
luxury cosmetics and fragrances. The new law means that
counterfeiters could face a four year jail term if caught.

The new law, which is being implemented by Commission vice-president Franco Frattini, also means that the EU can impose fines for any company or individual who infringes the regulations that now guard intellectual property.

The fines will range from €100,000 to €300,000 and will be implemented according to the risk associated with health and safety.

Frattini pointed out that criminal organisations are focusing on counterfeiting activities because they prove to be more lucrative than other forms of trafficking.

This problem is ompounded by the fact that, up until now, many authorities have chosen to turn a blind eye to the problem, partly because they don't have much power over it.

Counterfeiting of expensive cosmetic and fragrance products has become big business in the European Union, as large-scale businesses, mainly in Eastern European and Asia, flood the Western European market with increasingly authentic-looking products.

For luxury cosmetics and fragrance makers this poses a big problem as similar-looking products with inferior ingredients and efficacy are passed off as the real thing.

Not only are consumers disappointed by these products, but they are often as not tested to European safety standards, leaving individuals at the peril of ingredients that are sometimes banned for safety reasons, or else of a quality that can spoil formulations.

"The proposed measures are designed to bring Member States' criminal legislation more closely into alignment and to improve European cooperation so as to combat more effectively counterfeiting and piracy, which are frequently committed by criminal organisations and often pose a risk to health and safety, as well as seriously harming the interests of many sectors in the European economy,"​ the Commission said in a statement.

The European executive is hoping that the message will serve to deter companies who produce such goods as well as distributors within the European Union. But the authorities are up against a tough battle, as the recent enlargement of the Europe Union means that border controls amongst the 25 member states are now limited.

The latest moves by the EU authorities to crack down on the problem of counterfeited goods have come about as a response to a huge increase in the number of cases involving fake luxury goods.

According to the Commission's most up to date data a total of 100 million counterfeit goods were seized in 2003 with an estimated value of €1 billion, compared to 85 million seized in 2002. Some 70 per cent of these goods are estimated to have come from Asia.

Breaking this figure down, CDs and clothing were the largest categories targeted by counterfeiters, whereas fragrances and cosmetics accounted for nearly 1.1 million seizures.

Related topics: All Asia-Pacific, Market Trends

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