EU moves to curb counterfeit cosmetic trade
perfumes increased by 800 per cent in the period 2002 - 2003,
prompting the European Commission to draft new legislations aimed
at reducing the problem, reports Simon Pitman.
The Commission says that it will propose criminal-law provisions to combat 'infringements of intellectual property rights'. The measures will seek to align national criminal law and improve European-wide co-operation to help stamp out the problem.
Counterfeiting of consumer goods is a becoming a major challenge for EU authorities, and one that is continuing to grow. Manufacturers from Eastern Europe and Asia tend to target the replication of luxury goods. But as the attention is turning away from the counterfeiting of designer clothes and jewellry, expensive anti-ageing treatment, cosmetics and fragrances are becoming a primary target.
Not only is the pirated products represent a big problem for the cosmetics and toiletries industry - costing it millions in revenue every year, it also represents a safety risk for consumers, with hazardous or banned alternative ingredients often making up formulations that have little to do with the original product.
The Commission says that in total 100 million counterfeit goods were seized in 2003 with an estimated value of €1 billion, compared to 85 million goods 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. Fragrances and cosmetics accounted for nearly 1.1 million seizures, representing 1.1 per cent of a total.
The Commission highlighted the fact that criminal groups are now investing increasing resources into counterfeiting operations, which often prove to be more lucrative than other forms of trafficking but carry lighter penalties.
The new measures propose that all types of infringement of intellectual property rights on a commercial scale, as well as aiding, abetting and inciting infringements will be treated as a criminal offence.
As a result the Commission proposes fines ranging from $100,000 to $400,000 and at least four years in jail.
Franco Frattini, vice-president of the European Commission said that the new criminal law "forms a basic platform underpinning our joint efforts to eradicate these phenomena which are undermining our economy."
Currently it is estimated that on a global basis counterfeited and pirated products account for between 3 and 9 per cent of international trade.
