RISE IN COUNTERFEIT MARKET LINKED

TO TERRORIST FUNDING

Consumers are being warned that the innocent purchases of counterfeit products from Internet sites and markets are funding terrorist and criminal organizations, including Al-Qaeda, the Mafia and the IRA.

LONDON, Consumers are being warned that the innocent purchases of counterfeit products from Internet sites and markets are funding terrorist and criminal organizations, including Al-Qaeda, the Mafia and the IRA. The sale of these fake goods, ranging from "designer" clothes to power tools to pharmaceutical products are directly linked to international terrorism and organized crime, according to Carratu International PLC, a leading investigator of intellectual property abuse.

Carratu International estimates that the global counterfeit market, which already accounts for 9% of world trade, will double in size over the next two years. Much of the increase will be due to sales from unregulated internet sites advertising fake goods.

"It does not have to be involve the sale of anything sinister," said Spencer Burgess, director of Carratu International's Intellectual Property Investigations division. "It's easy to make money from something as bland as a T-shirt. The perception many people have that counterfeiting is run by small groups that are just trying to make a few dollars on the side is completely misplaced. It is very much more organized and malicious."

Extensive enquiries by Carratu International have unearthed links between counterfeiting and Al-Qaeda, Hizbollah, the IRA, ETA, the Mafia, Chinese Triad gangs, the Japanese Yakuza crime syndicate, the Russian Mafia and drug cartels. Indeed, the recovery of Al-Qaeda training manuals had shown that the organization recommends the sale of counterfeit products to raise funds.

"The bogus clothes people are buying off the Internet might be helping to prop up terrorist or criminal gangs. Every major terrorist group in the world is into counterfeiting one way or another. It is a fairly straightforward way to raise funds." said Spencer Burgess.

Carratu International are particularly worried about the proliferation of counterfeit pharmaceutical products. Research has shown that half the drugs currently obtained on the Internet were of dubious origin. Many were ineffective and some potentially dangerous. A recent study by the Spanish Consumers' Association had shown that a quarter of "e-pharmacies" sold medicines on the Internet illegally. Many counterfeit medicines were repackaged products that had outlasted their original shelf life.

"Only global regulation, such as the licensing of bona fida websites, could hope to bring the trade in counterfeit goods over the Internet under control." said Spencer Burgess "In the meantime, we would advise people to steer well clear of sits they do not know to be authorized by product manufacturers.

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Notes to Editor

1) In 2000, US Customs seized over $45million worth of counterfeit products including $7.8m of DVDs, videos and music CDs and tapes, $4.4m of computer hardware, $5.9m of toys, $4.2m of cigarettes, $3.9m of watches and $1.3m of sunglasses.
2) Of the seizures of counterfeit goods by US Customs in 2000 in 3,244 actions, the top 6 worst offending countries of origin were China ($15m), Taiwan ($6m), Malaysia ($4m), Hong Kong ($3.6m), Singapore ($3m) and Korea ($2m).
3) ETA controls the sale of counterfeit clothes and handbags in Southern Spain.
4) Hizbollah fund the manufacture and export of counterfeit pharmaceutical products and are also mass producing counterfeit $100 bills.
5) The UDF and IRA have been working together importing and selling pirate videos.
6) Yakuza have been blamed by Louis Vuitton for a 60% fall in sales in the Far East.
7) In the UK counterfeiting is estimated to cost companies between £4 billion and £6.6 billion per year. Worldwide, this figure rises to between $200 billion to $400 billion.
8) Spencer Burgess MSc, MIPI, CFE - Director IP Division, Carratu International. On completion of his Masters Degree at Stirling University, Spencer commenced his investigative career with a major oil company specializing in environmental and safety issues. His experience includes the investigation of both on and off-shore incidents. This was a high profile role dealing with issues often in a very public forum. In 1997 he joined Carratu International where he specialized in the investigation of Intellectual Property abuse including the complex area of pharmaceutical patent infringement. He has handled complex investigations throughout Europe, North America and South East Asia. Spencer now heads the Intellectual Property Division.

For all press and media enquiries please contact:

Victor Trocki
Trocki Limited
Telephone: +44(0) 20 7420 1911 Fax: +44 (0)20 7240 9934 E-mail: trocki@keescott.co.uk
8-10 Dryden Street, Covent Garden, London WC2E 9AD United Kingdom

For Additional Information, Please Contact:

Victor Trocki
Trocki Limited
http://www.carratu.com
+44(0) 20 7420 1911
trocki@keescott.co.uk