Attack on £10bn fake goods industry

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Indy Politics

Racketeers behind Britain's £10bn trade in counterfeit goods, from DVDs and clothes to perfumes and sunglasses, face a government push to force them out of business.

Racketeers behind Britain's £10bn trade in counterfeit goods, from DVDs and clothes to perfumes and sunglasses, face a government push to force them out of business.

Following the discovery that almost half of young people have bought pirated items, a crackdown will be launched this autumn on the criminal gangs that copy such products.

A specialist national team will bring together police, Customs, trading standards officers and owners of well-known brands that have been hit by the growth of "intellectual property theft", and direct sting operations against the ringleaders.

Convicted counterfeiters, who are often punished by small fines or short jail sentences, could also have their assets seized in an attempt to prevent them from benefiting from piracy.

The scheme, which is being co-ordinated by the Patent Office, comes as the pirates diversify from bootlegging CDs and DVDs and faking such well-known labels as Nike, Timberland, Tiffany and Louis Vuitton to copying more mundane goods, including car parts, spirits, medicines and condoms.

The industry calculates that the illicit trade is worth £10bn a year, costing the economy thousands of jobs because legitimate manufacturers have seen their profits hit. The Treasury also loses a total of £1.7bn in VAT
receipts as a result.

The trade in illegally copied DVDs remains one of the most common and lucrative scams, with pirate versions of Spider-Man 2, Shrek 2 and Thunderbirds all circulating this summer although they are still showing in cinemas. There were reports last week of criminals forcing Chinese immigrants to sell black-market DVDs in exchange for food and shelter.

One quarter of the counterfeiting gangs are suspected of having links with more serious criminal activities, such as drug-smuggling, money-laundering or even terrorism.

There are growing safety concerns over the products. A woman died last year after drinking fake vodka and people have suffered severe skin burns from pirated perfume.

Trading standards officers have also seized dangerous counterfeit electrical goods, such as hair-dryers, and motoring accessories, including brake parts.

The attraction of cheap products was recently underlined by a survey which discovered that 44 per cent of people aged between 18 and 29 had bought them at some time.

Under the new strategy, the Patent Office is setting up a team to direct action against the counterfeiters. It will gather information about the gangs and help local police and trading standards officers to launch raids against them.

Police chiefs are preparing to delegate extra officers to the crackdown. Initially, however, the aim is to co-ordinate the different agencies in the front line against the trade and to improve their training.

Specialists in the field point out that counterfeiters are highly mobile, rapidly switching between regions if they feel the heat in one part of the country. Because of poor links between police and councils, the trail often quickly goes cold.

With the worldwide value of counterfeiting estimated at more than £250bn a year, the British team will also liaise through Interpol with foreign police forces.

The anti-counterfeiting operation has never been co-ordinated nationally before.Phil Lewis, a senior policy officer at the Patent Office, warned that piracy was currently "high profit and low risk".

He said: "We need to be as organised as the criminals. At the moment it is very uncommon for trading standards officers to share information with each other or with the police."

He said information campaigns would also be run to counter the image of traders in counterfeit goods as lovable rogues like Del Boy and Rodney from the television comedy series Only Fools and Horses.

The Alliance Against Counterfeiting and Piracy, a coalition of trade organisations, said the Government plans would go "a long way" towards tackling the criminal gangs. It said: "By sharing information and intelligence it will become more difficult for counterfeiters and pirates to operate ­ meaning consumers will be better protected, organised crime will be disrupted and industry will stop losing billions of pounds a year."

The alliance calculated that the rackets cost industry £9.7bn in 2003, with the losses certain to pass £10bn this year. It is calling for the crackdown to be backed by tougher legislation on markets and car boot sales where many fake goods are sold.

Lord Sainsbury, the Science Minister, said: "Those who ignore others' intellectual property damage all our economic interests in the long run.

"People's livelihoods are put at risk by illegal products."