RISE IN COUNTERFEIT
TO TERRORIST FUNDING
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.
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
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
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
6) Yakuza have been blamed by Louis Vuitton for a 60% fall in sales in the Far
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.
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