Industry to Prevent Shipping of Counterfeit Goods

Brand owners and representatives from the international shipping industry have joined forces in signing an historic declaration of intent aimed at preventing the maritime transport of counterfeit goods.

Leaders from global shipping firms, freight forwarders, brand owners – whose products are counterfeited – and industry organizations, representing both industries signed a joint "Declaration of Intent to Prevent the Maritime Transport of Counterfeit Goods" today in Brussels. It marks the first time the global shipping industry and brand owners have made a public commitment to work together to stop the transport of counterfeit goods on shipping vessels.

Initial signatories include the leading global shipping firms and freight forwarders and ten major multinational brand manufacturers, along with the International Federation of Freight Forwarders Associations (FIATA), and the International Chamber of Commerce's (ICC) Business Action to Stop Counterfeiting and Piracy (BASCAP) and Commercial Crime Service (CCS). More transporters, brand owners and their industry associations are expected to join the voluntary initiative as awareness grows.

According to the United Nations (UN) Office on Drugs and Crime, about 90% of all international trade is moved around the world in more than 500 million containers on 89,000 maritime vessels. While this represents approximately 90% of all international trade, UNODC says that less than 2% of these containers are inspected to verify their contents. This results in enormous opportunities for criminal networks to abuse this critical supply chain channel to transport huge volumes of counterfeit products affecting virtually every product sector. According to a recent OECD/EUIPO report, US$ 461 billion in counterfeit goods moved through international trade in 2013, with almost 10% being shipped on maritime vessels.

Maersk Line and CMA CGM Group, two of the largest global transport companies with approximately half of all global shipping, and Kuehne and Nagel and Expeditors, two of the leading freight forwarding and logistics companies with total revenues of more than US$ 27 billion, were the first in their industries to sign the Declaration. A total 10 members of BASCAP were the first brand owners to sign the Declaration representing hundreds of global brands with combined sales of more than US$350 billion.

The non-binding Declaration acknowledges the "destructive impact" of counterfeits on international trade. It calls on the maritime transport industry to address it "through continuous proactive measures, and corporate social responsibility principles." The Declaration includes a zero tolerance policy on counterfeiting, strict supply chain controls and other due diligence checks to stop business cooperation with those suspected of dealing in the counterfeit trade

"We are proud to be among the first in our industry to sign this historic Declaration," said Michael Jul Hansen, Customs and Trade Compliance Lead for Maersk Line. "Maersk has been a leader in taking steps to prevent the use of our vessels for the shipment of counterfeit and other illicit goods, and this Declaration is a reaffirmation of our intent to do everything we can to ensure our ships are counterfeit free."

"This Declaration demonstrates the commitment of vessel owners, transport service providers and brand owners to work together to eliminate counterfeits from maritime trade routes," said Jeffrey Hardy, BASCAP Director. "This commitment paves the way for new voluntary collaboration programmes between intermediaries and brand owners to stop abuse of the global supply chain by counterfeiters."

"In my role as President of FIATA I am pleased to register the ICC/BASCAP initiative to counter intellectual property rights infringements," said Huaxiang Zhao, president, International Federation of Freight Forwarders Associations (FIATA). "FIATA is an association aiming to disseminate best practice and compliance all over the world; we have training programmes and services that are aimed at assisting our members in their compliance efforts, as well as in situations when they become unwitting targets of organisations that aim to exploit their services with untoward intentions. FIATA members are fully committed to better trade and this initiative perfectly fits our efforts in this direction."

The Declaration is a direct reaction to the concerns of brand owners that vessels transporting their legitimate products were also being exploited by criminal networks to transport fake versions. This phenomenon was summarized in a landmark report on the Role and Responsibilities of Intermediaries: Fighting Counterfeiting and Piracy in the Supply Chain, published in 2015 by BASCAP. The report highlights how today's complex global supply chains are being infiltrated by criminals, allowing the entry of counterfeit and pirated goods. The report presents recommendations for stopping this infiltration across the key intermediary channels, including transport operators.

Following publication of the report, BASCAP organized a working group of its members to initiate a cross-sector dialogue with the transport industry to discuss ways to work together to find voluntary solutions.

The chair of the working group, Meena Sayal, Global Brand Protection Director for Unilever, praised the response from the transport industry. "We have been extremely pleased by the cooperative and collaborative response from the transport industry," Ms Sayal said. "BASCAP member companies, including Unilever, have been frustrated in seeing that the same transport companies that we use to ship our products around the world are being abused by criminals to distribute fake versions of our products.

"We recognize this is a new and complicated issue for many in the transport industry, but appreciate the unanimous recognition–from all of the companies that we have talked to—that there is a problem and more can be done to solve it. This Declaration is a direct result of that dialogue and represents an important first step in this process and we look forward to now moving forward with the joint work required to develop concrete actions that we can all agree on."

"Today marks a significant milestone in work protecting the integrity of our supply chain and combating illicit trade," said Matteo Mattei from Philip Morris International. "Closer collaboration with vessel owners and freight forwarders is key to preventing abuses and achieving sustainable results. We welcome the work done by BASCAP in bringing together parties throughout the logistic process to find solutions, and we are proud to be part of this process."

"The next step is to move forward with discussions with our maritime industry partners to develop specific projects, focusing initially on promoting the Declaration to others in the industry, and developing a detailed series of measures on improved information sharing and other initiatives suggested in the document," Mr Hardy said.