Wednesday, June 1, 2011

Freight And Shipping Groups Warned About Fakes And Corruption

TT Club Illustrates Dangers to Carriers
Shipping News Feature

UK – WORLDWIDE -The TT Club, which provides an extensive range of services to the freight transport and logistics industry, point out two items this month which both emanate from the murkier side of the international shipping trade. Both freight forwarders and land, sea and airfreight carriers are warned of the dangers of transporting counterfeit items and becoming enmeshed in bribery and corruption allegations.

The Club point out that an EU directive aimed at reinforcing intellectual property rights is worded in such a fashion that it could conceivably be used as a ‘catch all’ which might ensnare innocent carriers or freight forwarders, making them liable for severe penalties. Despite the directive being aimed at internet service providers (ISPs) the TT Club conclude that the interpretation of a carrier as an ‘intermediary’ in a transaction involving copyright might be a distinct possibility.

The outcome for anyone involved in the supply chain where counterfeit goods are involved might possibly be subjected to an injunction which may impinge on their business and the TT Club rightly points out that carriers could be subjected to financial penalties if they attempt to transport goods across international borders with little or no possibility of reclaiming these.

FIATA came out in September last year to support their members saying freight forwarders might be seen as easy meat for authorities seeking a scapegoat. The organisation insists that verification of the authenticity of goods is not for the carrier to establish nor is it his responsibility. The information revealed to authorities in customs declarations and the like can only be what the shipper has declared and, as customs regulations and rules of carriage often forbid the forwarder or carrier to examine items to establish authenticity, no responsibility can be accepted.

With the World Economic Forum Global Risk Report 2011 estimating (and who can really know?) that 7 to 10% of world trade in the global economy is actually illicit (one third of which are in the pharmaceutical or electrical sectors) the risks to those in the freight industry are obvious.

To read the TT Club viewpoint on in full click HERE.

As to corruption the Club makes note of the fact that the UK’s Bribery Act, which received Royal Assent in April 2010 and is now due to come into force on the 1st July, is probably the most comprehensive and stringent anti-bribery legislation in the world today. In addition to the obvious offence of requesting, receiving or giving a bribe to an individual or official there exists a somewhat spurious commercial charge of ‘failing to prevent bribery’.

In essence this means ALL companies should fireproof themselves against such an allegation by ensuring they have a risk assessment in place for such occurrences for not only their own employees and directors but any agents or subsidiaries.

Companies should not be under the impression that bribery and corruption only means the ubiquitous brown envelope stuffed with cash (FIFA officials please take note) but such things as corporate entertainment making it essential that responsible parties review all potential problem areas on a regular basis and react accordingly.

Guidance notes on the Bribery Act are essential reading for any company and they can be read HERE.