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The OECD report highlighting the economic impact of counterfeiting and piracy features a section regarding electrical components and with the report including special mention of its Electric Dragon campaigns, it is important for those in the supply chain - and building services professionals - to play their part and be vigilant.
Copying electrical products is an insidious, fast growing global business. Penalties are low, usually just token fines, and the potential profits are staggering.
At a recent High Level Conference in Brussels, Kevin Harris, Chairman of the BEAMA Anti-counterfeiting Working Group echoed the view given at last year's conference by Christophe Zimmerman, Head of Anti-Counterfeiting at the World Customs Organisation, that the battle against counterfeits was being lost, because politicians and regulators were only paying lip service to this issue, rather than deploying the necessary resources to deal with the problem.
The OECD (Organisation for Economic Cooperation and Development) estimates (2005) lost sales worldwide of 2.4 billion euros due to counterfeit electrical components and even this enormous number is accepted as being extremely conservative. Annually, an estimated £30 million worth of counterfeit electrical products reaches the UK.
Why counterfeits?
Counterfeiting isn't restricted to producing forged Cup Final tickets and bank notes, and the electrical industry is not immune. The consequences can be fatal - as demonstrated by the tragic death of a British boy killed by a counterfeit Gameboy charger while on holiday in Thailand.
With small, easily concealed low-tech/cost production, electrical component counterfeiters are driven by high unit profitability, poor enforcement of anti-counterfeit measures and inadequate penalties.
United front
Long at the forefront in initiatives against producers of anti-counterfeit electrical products, BEAMA joined forces with the EDA (Electrical Distributors Association), ECA (Electrical Contractors Association) and SELECT (Scotland's trade association for the electrical, electronics and communications systems industry) to create a Charter in the fight to combat the trade in counterfeits, and the proliferation of products failing to comply with the appropriate standards.
It has also been signed by other organisations, including the Electrical Safety Council, Trading Standards Institute, The Alliance against IP Theft, BASEC, BCA, LIF and Intertek.
The Charter presents a unified front with associations working together on practical, effective solutions to stem the threat from counterfeit and non-compliant electrical products.
Local authorities, Trading Standards departments and the Health and Safety Executive must be vigilant in seeking out fake and non-compliant electrical products, which cheat consumers and can be highly dangerous.
Cooperation
International initiatives combating counterfeiters is gathering pace, particularly between the US and EU. New moves will ensure counterfeit products cannot comply with European safety legislation, that countries work together in improving enforcement in China where the EU is investing €11 million in training IPR judges and prosecutors, and through expertise/experience exchanges, and joint customs projects.
In a meeting with European Association ORGALIME, the new EU Trade Commissioner Lady Ashton, has agreed to raise the issue during her bi-lateral talks with the Chinese Government, this autumn.
Consequences
Potentially dangerous counterfeit electrical products found include plugs, sockets, lamps, cables, connectors and even more worryingly fuses, circuit breakers and RCDs, which are there to protect life and property.
The consequences of counterfeit electrical accessories entering the supply chain are damaging for everyone including loss of revenue and reputation for manufacturers, wholesalers and contractors. Much worse is the potential loss of life from fire because one of these products failed to protect you.
Sophisticated production means initially it is often difficult distinguishing counterfeit from genuine products until something goes wrong and that expected protection is not there. If you are involved in the specification or purchasing of electrical products always remember the 3 Ps:
- Person - do you know and trust the person who sold you the product?
- Place - was it bought at a place from which a recognised trader operates?
- Price - was the price in line with what you normally pay?
If the answer to any of these is NO, beware! You may be buying and specifying a dangerous counterfeit product. These are defective goods, manufactured by criminals purely for profit with no sense of responsibility.
International Law clearly prohibits counterfeiting, which is equivalent to the act of free riding on the names and reputations of others, receiving undue profits, and providing no guarantee on defective goods. So if you buy, sell or install them you are breaking the law.
Action
For nine years, BEAMA has taken positive action against counterfeiters - raising awareness of the counterfeit issue and creating political will in affected countries.
Through our Electric Dragon campaigns and intelligence networks, over 12 million products have been seized and 300 factories and warehouses raided in China, where most (over 80%) of the counterfeit electrical products are made, the Middle East, Africa - and the UK.
Eighteen brands are now represented and our intelligence database has significantly increased the success of our raid actions with over one million products seized in the last year. A raid in UAE resulted in over 200,000 products seized from one distributor, while a similarly successful raid has just been completed in Tanzania.
We recently participated in a round table discussion facilitated by ESC and chaired by Ron Gainsford CEO of the Trading Standards Institute. All participants, including BERR representatives, agreed that robust enforcement of regulations is essential to protect our businesses - especially SMEs and more controls at borders and deterrent penalties are required to combat counterfeiting.
Counterfeit Kills
Our impactful film ‘Counterfeit Kills - Protect Yourself' (in DVD/CD-Rom formats) and an accompanying leaflet highlight the potential dangers of fire, death, injury, and effects on reputation of specifying or installing inferior quality copy cat electrical products.
Everyone in the supply chain must ensure the authenticity of the products they buy or install because the alternative could be extremely costly to them and could kill people.
Coming into effect in 2010, a new European Directive puts further obligations on wholesalers and contractors to ensure the products they sell are safe and compliant and that there is traceability back to the original importer into the EU.
If in doubt about a product's authenticity you should immediately check with the manufacturer. The best solution is for products to be purchased from only an authorised supplier or distributor.
Responsibility
The responsibility for ensuring that only genuine quality products are used lies with all those specifying, purchasing and installing electrical equipment. Our campaign aims to stem the flow of counterfeit products at source - in the marketplace, and in transit, to ensure the UK and European markets do not suffer from a flood of these dangerous products as has happened elsewhere.
No action is not an option and therefore the support of building services professionals, electrical contractors and wholesalers is absolutely vital to end this dangerous practice.
