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Sunday, 14 August 2011

Import of counterfeit products in Greece is soaring since Chinese company is running terminal at port of Piraeus.

Some stories, even when they are a few days old,  are just too good to leave behind. This one I found, when I was browsing through some older newspapers. 

The Dutch financial newspaper Het Financieele Dagblad writes on August 1, a must-read article on counterfeit products coming from Greece. Here is a large summary of this (double) article:

A tidal wave of counterfeit products floods Europe via Greece  (Pt I) (link in Dutch)
The amount of imitation sunglasses, luxury bags and other counterfeit articles that sneaks past the Greek customs, is soaring. This is stated by Ron Veraart of TM Eye, a company that is searching for counterfeit products, under assignment of the large fashion chains. 
Veraart states that  the wave of counterfeit articles started, short after the Chinese shipping company Cosco took a participation in the port of Athens, Piraeus. Cosco manages one of two terminals there, since 2009. The transport company that doesn’t trade itself, has also a participation in the port of Thessaloniki, the second port of Greece. 
The Greek Economic and Fiscal Investigation Service (SDOE) and the police confiscated more than 2 mln counterfeit articles in 2010 and in the first half of 2011 already 3 mln. In the years before, this was about 300,000 articles per year. The increase can be partially declared by the fact that the investigation services work more efficiently. “But this doesn’t explain the enormous increase. On top of that you see more and more counterfeit articles on the street. There are just more counterfeit articles entering the country”, according to Veraart. 
Due to its stretched coastline and open borders with the rest of Europe, Greece is very attractive for smuggling. Figures of the European Commission show that Greek customs stops most counterfeit articles in Europe. Of all counterfeit articles, 85% comes from China. 
Chinese shipping company Cosco rejects firmly that there is a connection between its presence in Greece and the increase of counterfeit imports. ‘The increase is an international phenomena and cannot be blamed on one country, one industry or one company. Cosco endorses strongly the protection of trade mark laws. Eventually, the inspection of containers is a task of customs. 
I prefer following a street-hawker directly to a warehouse with counterfeit articles (pt II)
“There are two ways of discovering a depository for counterfeit goods”, according to Ron Veraart of TM Eye. Assigned by brand holders of international fashion chains, he searches from Athens to counterfeit shoes, glasses, perfumes and other fashion articles.“You can arrest a small shopkeeper in order to obtain information on his supplier, hoping to get at the source eventually. But I rather follow a Nigerian street-hawker directly to a warehouse”, Veraart states. “That is much quicker. If you walk through Athens, you meet a lot of street-hawkers”. 
When Veraart discovers a warehouse, he informs the police and the SDOE (see first article). “Then it is beyond my jurisdiction. At most, the police asks me to identify counterfeit goods, due to my expert knowledge`. 
Veraart works for more than five years as an independent entrepreneur in Athens, together with two free-lancers he contracts. The last two years, the amount of counterfeit articles on the Greek market soared. ´Until a few years ago, we found five or six large depositories in one year. This year alone, we discovered forty and another forty are scheduled´. Figures from the Greek SDOE and police confirm this picture. 
Not only 85% of the counterfeit articles is from China, also the depositories that Veraart finds are often in Chinese hands.A large share of the counterfeits enters via de port of Piraeus. `The sheer size of it and the amount of people that arrived there in summer, make this port vulnerable for fraud and smuggling´. This is stated in a report of the Bulgarian think tank CSD in 2009.´This smuggling is mainly concerning counterfeit articles, stolen cars, weapons, radioactive material (! – EL) and products where excise duties are levied, like cigarettes.´
I absolutely don´t want to accuse China of deliberately exporting counterfeit goods to Europe via Piraeus. However, the fact that 85% of all counterfeit products are produced in China and the fact that the imports of counterfeits in Greece soared, since a Chinese company took over a terminal in the Port of Piraeus, sheds China in an unfavorable light. 

European companies could get the idea that China is mainly paying lip service to trade mark protection and counterfeit surveying.

Another fact is that China is very busy with upgrading their network in Europe, via Portugal, Italy, Ireland and countries in Eastern Europe. 

Other ports, terminals, industrial zones and even highways were sponsored by China. Will these also be used for importing counterfeit articles?

I want to remind you of two older articles:

Without wanting to do mud-slinging towards China, I would urge the European Commission and the government leaders in Europe and the US to beware of the counterfeit wars.

The original brands invest a lot of time, money and craftsmanship into building brands, based on their good name, sometimes just to see it be thrown away by bad counterfeit products. And especially Italy and France have a substantial number of luxury brands that are vulnerable for counterfeiting: Gucci, Louis Vuitton, Brioni, Coco Chanel, Hermès, Cartier, you name it. Both countries that need every penny of income to keep head above water.

The same is true for the US that has an important brand in Apple: the same brand that saw the Chinese, counterfeit HiPhone V be brought to the market, even before it could launch its iPhone V.

And I want to remind you that also medicaments and specialty drugs (like Viagra) are counterfeited on a large scale. And exactly here, counterfeits can kill people.

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