Tuesday, September 4, 2012

Freight Forwarding Agents Warned to be More Vigilant

Recession Spawns Counterfeit Goods Epidemic
Shipping News Feature

UK – The British International Freight Association (BIFA) issued a warning this week to all forwarding agents to be on their guard against the carriage of counterfeit items which it says anecdotal evidence indicates is on the increase. Evidence however is not purely anecdotal as a company which is a regular user of the Handy Shipping Guide testified to following a raid on their premises by officers of the local Trading Standards Office a few months ago.

The company, which has asked to remain anonymous, arrived at their shared warehouse in the morning to find half a dozen casually dressed men ransacking the store where import and export goods were being stored prior to delivery. The men had broken open numerous boxes and were loading goods onto a large unmarked van. At first the company’s owners thought they were being robbed but the representative from Trading Standards identified himself, showed a warrant to search and said he had received information that certain goods held were counterfeit.

After a heated discussion the officer signed a full receipt for the dozens of boxes of items seized and left with them. The goods proved to be a mixture of patterned cloth, handbags, wallets etc. all exactly as per the descriptions on the accompanying paperwork. Although cooperating fully with the authorities at each stage the freight forwarders were threatened with prosecution despite protestations that they could not be held responsible for the contents of sealed boxes as they were acting as common carriers and basing their decisions on written evidence such as invoices supplied to them by the shippers.

Eventually it transpired that the goods were a mixture of genuine and counterfeit items and the threat of prosecution was dropped and charges pursued against the directors of the company found to own the fake items. The genuine items were retained by Trading Standards whilst Customs and police checks were pursued and eventually returned to the rightful owners. The case is just one of last years statistics when 90% of all detained products were either destroyed or passed to the Courts to determine whether any infringement had occurred.

This example supports recently published European Commission statistics showing that EC Customs detained almost 115 million items that were suspected of violating Intellectual Property Rights (IPR) in 2011, up on 2010’s figure of 103 million. In total, 73% of all IPR–infringing goods originated in China, 80% if you include Hong Kong. 26.6% of all detentions were of products, which could be dangerous to the health and safety of the consumer. Products detained were worth over €1.3 billion and were held in over 91,000 separate incidents. UK customs accounted for almost 33 000 incidents, 36% of the EU total and more than any other EU Member State. However, the highest total number of articles was intercepted by Bulgarian and Italian customs. The top categories of articles stopped by customs were medicines (24%), packaging material (21%) and cigarettes (18%).

There has been an eighteen-fold increase since 2001 in numbers of incidents where articles are detained. Much of it is due to the rise of e-commerce which has seen an increasing number of small packages sent by mail. Over half the cases where products were intercepted in 2011 (56%) involved transport by post or mail courier however larger sea and road shipments still account for the vast majority of total articles. There has not been a similarly dramatic and sustained rise in the overall number of articles intercepted, which are "only" 21% up on 2001, despite an increase of 11.7 per cent in numbers and 18 per cent in value in 2011. BIFA Director General, Peter Quantrill commented:

“It is thought that the ongoing recession is fuelling the trade in fake products. Whilst freight forwarders, acting as an intermediary, must act in good faith when accepting consignments for shipment, they must also exercise reasonable diligence. Previously we have highlighted our opposition to European Commission (EC) proposals to make the carrier (which would include consolidators, such as our members) responsible for the costs of disposing of counterfeit goods that infringe IPR.

“A carrier should not be held responsible for the actions of another party over whom it has either limited or no control. Furthermore, we believe it is the owner of the copyright or brand, which benefits from the destruction of the IPR-infringing items. But whilst the area of who bears the cost for destroying such goods remains undecided, our members need to be doubly vigilant.”