Fake goods pose major threat to business worldwide, survey reveals

The public often perceives counterfeiting as harmless

Paris, 15 February 2005 -- Counterfeiting and theft of intellectual property are among the most pressing problems facing business today according to a world poll of corporate and academic economists released today.

The poll was conducted by the International Chamber of Commerce and the Munich-based Ifo economic research institute. A panel of more than 1,100 corporate and academic economists took part in the poll. As many as 94% of the experts polled in 90 countries considered that governments should make greater efforts to prosecute theft of intellectual property.

The experts warned that fighting the pirates will not be easy. They stressed that "it is consumer demand that drives counterfeiting: the low household income and the high price of genuine goods." The public often perceives counterfeiting as harmless, while it is enormously harming many people, the experts added.

In response to such wide industry concern about the spreading scourge of piracy and counterfeiting of goods, ICC has launched a major worldwide initiative to stop the theft of intellectual property.

Business Action to Stop Counterfeiting and Piracy (BA SCAP) will step up the business fight against what is conservatively estimated by industry to be a US $600 billion a year problem.

Rather than duplicate the efforts of individual industry initiatives to combat counterfeiting and piracy, BASCAP will draw them together, ensuring that their actions are more carefully coordinated, and, ultimately, that their collective message is more clearly heard by governments and the public.

The arguments for action are compelling:

• Governments bear much of the financial cost through loss of tax revenue;
• Consumer health and safety are threatened - especially with the widespread counterfeit production of pharmaceuticals and aircraft and motor parts;
• Research and innovation efforts are stymied;
• Recent intelligence from Interpol shows that piracy and counterfeiting are increasingly being used to fund organized crime;
• Low priorities for intellectual property rights in a country have a direct negative impact on foreign direct investment and economic growth.

The BASCAP initiative was kicked off in November 2004 by then-ICC Chairman, Jean-René Fourtou, who is also Chairman and CEO of Vivendi Universal. He is leading a group of key CEOs drawn from ICC's network in 130 countries and representing the gamut of industry affected by this problem.

BASCAP will seek not only to encourage governments to enforce intellectual property protection laws, but also to educate consumers about the deleterious nature of counterfeit and pirated goods.

As the only business organization in the world with a truly global reach, ICC is uniquely placed to take the fight against counterfeiting and piracy to the level required for action to be effective.

Commenting on the poll outcome, ICC Secretary General Maria Livanos Cattaui said: "The poll demonstrates yet again that counterfeiting is an enormous problem for the community at large, and this is still not sufficiently recognized. BASCAP is focussing on every aspect of intellectual property theft, including the manufacture of phoney pharmaceuticals that can kill and fake automotive and airplane spare parts that can provoke fatal accidents."

Other highlights from the poll

• According to the responses, counterfeit products pose the biggest problem to economies in Africa (particularly in Morocco, Kenya and South Africa), CIS (in Kazakhstan and Russia) and the majority of Eastern European and Asian countries (see Figure 13a).

• In other countries a vast majority of surveyed WES experts (more than 70%) agree or strongly agree that theft of intellectual property is among the most pressing problems in the cou ntry, including: Italy, Portugal, Israel, Turkey, Paraguay, Peru, Costa Rica and Mexico. This share of experts is particularly high in low-income countries (see Figure 13b).

• The law often lacks enforceable rules regarding counterfeiting, according to surveyed experts, particularly in Africa and the majority of Eastern European countries (see Figure 15).

• In Costa Rica, Israel, Peru, Kazakhstan, Portugal, Italy, Belgium, Turkey, Mexico and the United Arab Emirates a similarly high share of experts think that their country's government should increase efforts to enforce current legislation on intellectual property.

To view graphics from the questions on counterfeit products, please visit the following URL:
http://www.iccwbo.org/home/news_archives/2005/Images/Ifo/BASCAP_graphics.asp

For more detailed data from the poll, charts and other information, please contact:

Mary A. Kelly, Director of Communications, International Chamber of Commerce.
Email: Click here to send a mail. Tel: +33 1 49 53 29 87.

See also:

Economists see world economic slowdown
Paris, 15 February 2005

For general and regional World Economic Survey graphs please visit :
http://www.iccwbo.org/home/news_archives/2005/Images/Ifo/WES_graphics.asp