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The ICC initiative to stamp out global counterfeiting is bearing fruit. Launched in 2005, BASCAP (Business Action to Stop Counterfeiting and Piracy) has enlisted CEOs from some of the world's most powerful companies in a concerted effort to convince governments to crack down on counterfeit and pirated products estimated to cost the world economy up to USD 600 billion yearly in lost revenue. Counterfeit products include not only luxury goods such as watches, handbags and other accessories, but also essential items such as pharmaceuticals and aircraft parts. Counterfeiting has also spilled over into letters of credit, with serious consequences.

To raise awareness of the dangers, BASCAP has opted for a multi-pronged approach:

- Information. BASCAP has established an information clearinghouse to provide real-time information on country and sector bases to inform businesses of the latest frauds and how to deal with them. The clearinghouse also contains a Brand Protection Directory in cooperation with ICC's Counterfeiting Intelligence Bureau (CIB) to inform businesses how to protect their own brands through the use of anti-counterfeiting technologies.

- Influence. BASCAP has lobbied the OECD, the World Trade Organisation (WTO) and individual governments to stimulate them to act against counterfeiting and piracy. The July meeting of the leaders of the G-8 countries was notable for statements from its leaders on the subject, and BASCAP played an instrumental role in helping to shape the final stages of the OECD report on the economic consequences resulting from the production of counterfeited and pirated goods.

While BASCAP deals with intellectual property theft, the CIB, based in London, has developed special expertise in spotting financial frauds. In this area, banks have proved to be particularly vulnerable. P.K. Mukundan, Director of ICC's Commercial Crime Services, pointed out in the last issue of this newsletter that there are acute problems with sellers presenting counterfeit documents to banks under an L/C and collecting the proceeds, leaving the hapless buyer holding worthless documents. In the US, one of the country's larger providers of outsourced human resource management services was accused of passing counterfeit L/Cs for the second time in a year. The company had been using the fraudulent documents to obtain insurance. The Senate in the state of Maryland has worked on a bill that would make it a felony to counterfeit financial instruments and allow suspects to be investigated and prosecuted in any area of the state where the crime occurred or where the victim lives or conducts business. The legislation was a response to reports that counterfeiting of financial instruments had increased fivefold since 1996 as a result of advancements in computer technology, which have made it easier to produce fake notes and documents.

Counterfeiting and piracy involving the theft of intellectual property is the other side of the coin. In August of this year, the Bush administration asked the WTO to rule on a complaint against China over the piracy of copyrighted movies, music, software and books, escalating a dispute that has continued for years. The US Trade Representative's office asked the WTO to rule that China's laws fall short of international agreements, after consultations failed to resolve differences over what the US says are weak Chinese laws to safeguard patents and copyrights. A business group including Microsoft, Walt Disney and Vivendi estimate that this cost companies USD 2.2 billion in 2006.

Whether it involves goods, documents or other sectors supposedly protected under intellectual property legislation, it's clear that counterfeiting and piracy have become very big business indeed.

The BASCAP website is www.iccwbo.org/bascap