Awareness and Action in the Fight Against Fakes

2007-10-18

“Counterfeiting has an enormous negative impact on the economy, the health and welfare of citizens and many aspects of our society,” says Doug Geralde, CSA Group’s director of corporate audits and investigations, and Chair of the Canadian Anti-counterfeiting Network (CACN).

“Evidence from international law-enforcement indicates the sale of counterfeits is funding organized crime,” Geralde adds. Counterfeiting costs honest citizens their jobs; steals hundreds of millions of dollars in unpaid taxes and robs Canadians of funding for education,healthcare and employment. Perhaps most importantly, counterfeit items present a real danger to people’s lives which is why the CACN and RCMP are among the growing number of organizations actively encouraging Canadians to take action by “buying the real thing”.

According to Geralde, recognizing that knock-offs are no longer limited to flea markets and bargain retailers but are now entering the mainstream marketplace, is necessary to solving the problem. He says counterfeiters know very well how to get fakes into supply chains.

“They know what’s being short-shipped,” he says. “The counterfeiters find out what’s a hot seller at Christmas -- out of 40 new toys, there’s always one or two that catch the public’s eye. Counterfeiters start to do knockoffs.”

Warren MacInnis, a former RCMP officer who is now the criminal enforcement manager for Underwriters Laboratories (UL)’s anti-counterfeiting operations, has seen first-hand how the creation and sale of counterfeit products has gone from petty crime to big business. He says investigators are now discovering a much wider range of counterfeit products across Canada in larger retail chains, everything from power bars and extension cords, to brake pads, prescription drugs and airplane parts.

“Particularly alarming are items bearing forged safety certification marks and counterfeit products that present serious health and safety risks such as pharmaceuticals, consumables, and personal-care products,” MacInnis says. “These potentially hazardous goods are increasingly finding their way into the national distribution system, onto the shelves of large retailers, and into the homes of Canadians.”

Curbing the sale of counterfeit products, especially those that bear fake certification marks, is of particular importance to Canada’s national standards system; the reputation of all of its members depends upon it. On behalf of the national system, the Standards Council of Canada (SCC)’s Consumer and Public Interest Committee (CPIC) has established a consumer-product safety task force with the mandate to examine and make recommendations on various issues relating to counterfeit products.

“Our concern is to protect the public when something goes wrong,” says Dr. Betty Crown, a member of the task force. “If the products are certified, the problem is ‘what can the certifying body do about it?’ We are considering recommendations to improve the reactions and effectiveness of participants in the national standards system.”

According to Crown, the committee has looked at case studies provided by certification bodies in Canada. It has developed a list of issues dealing with communication between regulatory and certification bodies, and is taking into account the extent to which consumers are included. The task force expects to have a draft report and recommendations to CPIC by early 2008.

Rae Dulmage, Director of Underwriters Laboratories Canada (ULC)'s standards department and government relations office, emphasizes the importance of understanding the product-safety issues associated with counterfeiting, and on communicating those issues within the national system. “When members of the task force go to other committee meetings, they talk about it,” he says.

In March 2007, the SCC-sponsored Canadian national committee of the International Electrotechnical Commission (CNC-IEC), along with the Canadian Standards Association (CSA) and ULC, presented a white paper “Report on Counterfeiting and Piracy in Canada: A Roadmap for Change” to the Parliamentary standing committee on industry, science and technology. The report includes several recommendations for legislative changes that will enable detection along the supply chain, and enforcement of penalties.

Anti-counterfeiting projects, such as CPIC’s and the CNC-IEC’s, are cropping up as more cases of substandard products and counterfeit merchandise are being discovered and recalled.

Andris Zarins, the national intellectual property rights crime coordinator for the RCMP, also believes fraudulent certification marks are one of the main threats to consumer safety. While Zarins acknowledges that counterfeit products cause numerous problems for legitimate manufacturers, including increased production costs, loss of customer confidence and supplier business, he considers the most acute problem to be the health and safety risk to consumers. “Consumers seek products that are safe because they have the CSA or UL certification mark,” he says.

There remains some debate among stakeholders as to whether the music industry hype over tainted products from China is raising attention or obscuring the important issues, however all parties are working hard to raise awareness, cooperate with police and border officials, and put their own people on the ground at home and abroad to investigate and prosecute criminals.

For its part, CSA hired an anti-counterfeiting specialist to join its international China operations some time ago, and nationally has announced the addition of a former police officer on staff as Manager of Counterfeit Intelligence.

In June of 2007, UL in partnership with the RCMP and Interpol, co-hosted an international conference on the topic. It has trained approximately 2,000 U.S., Canadian Customs, and RCMP officials on how to identify counterfeit marks.

In addition, the Canadian federal government awaits results of two standing-committee inquiries: one on the threat posed to public safety by counterfeit products, and the other on the impact of counterfeiting and piracy to industry. These committees recommend increased financial resources, and more power for governments, border officials, and prosecutors to bring counterfeiters to justice.

There has also been an increase in educating consumers about the dangers of counterfeit products and fake certification marks. One example of this is the poster campaign put out by the CACN and the RCMP, which promotes the reasons for vigilance when it come to buying knockoffs or too-cheap products of dubious origin, and offers consumers practical advice on how to spot fakes.

While these measures are helping in the battle against counterfeits, more needs to be done if the war is to be won.

“If we don’t act and move on it now, it could jeopardize the entire safety network,” says Geralde.

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This article first appeared in Volume 34 of CONSENSUS Magazine, 2007.  The information it contains was accurate at the time of publication but has not been updated or revised since, and may not reflect the latest updates on the topic.  If you have specific questions or concerns about the content, please contact the Standards Council of Canada.

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