Globalisation has added significant complexities to international trade and global supply chains. In this environment, customs authorities across the world have a unique role in achieving balance between regulation and trade facilitation.
Globalisation has added significant complexities to international trade and global supply chains. In this environment, customs authorities across the world have a unique role in achieving balance between regulation and trade facilitation. The World Customs Organization (WCO) supports the objectives of customs administrations to collect revenue, secure supply chains and protect public health and safety, while simultaneously facilitating trade.
The WCO’s capacity-building activities are vital for achieving this objective. Customs authorities must receive up-to-date information and training on trends and patterns in illicit trade: this information is key for developing enforcement strategies and taking action on the ground. The criminal underworld is not static; organised criminal groups use many different sophisticated methods and human and technological resources to generate profit. If governments do not stay ahead of the curve, enforcement strategies will prove incapable of containing the threat posed by illegal trade. Therefore, information exchange, analysis of trends and patterns and hands-on instruction are paramount for tackling this challenge.
Counterfeiting and piracy continue to grow as a social and economic threat. Counterfeit and pirated products are prevalent across the world and in all industry sectors. Particularly threatening are those products that cause direct harm to consumer health and safety. Further, the illicit trafficking of counterfeit goods is often linked to other serious crimes, such as money laundering and funding of terrorist organisations. Fighting this form of criminal activity remains high on the WCO’s list of priorities.
As customs administrations are responsible for protecting national borders from the illegal flow of counterfeit and pirated goods, the WCO leads discussions on global efforts to fight such crimes. These entail improving enforcement methods and promoting the exchange of information between different national customs authorities, as well as between Customs and the private sector. To tackle the growing phenomenon of counterfeiting and piracy, the WCO draws largely on its IP rights capacity-building programme, which includes coordinating law enforcement operations and developing technological tools for field customs officers, such as the Interface-Public Members (IPM) platform. Analysing emerging trends and products is also key for staying one step ahead of counterfeiters. Thus, this chapter also provides insight into the growing threat posed by counterfeit pesticides and how the WCO is countering this threat.
Operation Balkan Gate
WCO operations are simultaneous enforcement activities conducted by multiple customs administrations with a particular focus on specific products. These operations, which lead to seizures of counterfeit goods, also contribute to building customs enforcement capacity. Participating member customs authorities seek and receive advice from WCO experts and share their experience using WCO tools such as IPM and CENcomm.
In this case, the increase in counterfeit and pirated goods entering European markets via the ‘Balkan route’ highlighted the need for a targeted operation in the Balkan region.
Operation Balkan Gate mobilised 10 customs administrations (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Italy, the Former Yugoslav Republic of Macedonia, Montenegro, Romania and Serbia) to conduct simultaneous inspections of consignments suspected to contain certain types of counterfeit and pirated goods. The operation took place across 10 main entry points over a period of one week and provided deeper insight into the flow of goods entering Europe through the Balkan region.
The operation strengthened cooperation between customs administrations by enabling officers to share the results of each inspection. Further, WCO IP rights-accredited experts led real-time training in new and practical targeting techniques to enhance interception capabilities. This operation also served to improve cooperation with the private sector – particularly rights holders – and encouraged more extensive use of the IPM platform.
The operation objectives were threefold: strategic, tactical and operational.
At a strategic level, the aim was to develop more comprehensive intelligence on the scale of trade in counterfeit and pirated goods within the region. Shipping routes and the flow of goods were monitored in order to detect new routes or techniques.
The operation aimed to provide tactical insight through risk profiling and targeting with more focused controls on suspicious consignments and the detection of counterfeit or pirated goods at the major points of entry. A key aim of the operation was to identify perpetrators through enhanced coordination with national counterparts (and other interested parties) in order to use the measures available under national legislation to disrupt and dismantle trafficking networks – a core objective of all WCO operations.
The operational objective was to train customs officers to distinguish between genuine and fake goods, with specific training on the IPM platform. Customs officers were also expected to intercept consignments potentially containing goods which could jeopardise consumer health and safety; and to detect, intercept and seize counterfeit and pirated goods.
Figure 1: IPM Mobile
As of March 31 2015, 3,888,013 units of all types of goods had been intercepted (seized and pending). Counterfeit or illicit medicines represented the most numerous category of products intercepted, with over 3,369,544 units seized (around 86% of the total number of goods); these consisted mostly of erectile dysfunction medicine. Second to medicines were accessories (eg, belts and handbags) with over 180,000 pieces intercepted. Games and toys was the third-highest category, with some 87,000 units seized; followed closely by electronic appliances (77,840 units) and foodstuffs (75,660 units).
In terms of the origin of the goods intercepted, China ranked first, named in 81 of the 130 cases reported, followed by Turkey (with 19 cases).
The IPM platform, the WCO’s tool in the fight against counterfeiting, became operational in 2011 and has already seen many improvements since its inception.
In 2015 the WCO launched a complete redesign of both the web and mobile IPM platforms. In the four years since it became operational, the IPM tool developed from a basic genuine and fake database – featuring pictures and basic descriptions of products – to a sophisticated system offering options such as a system for alerting customs officers, an e-learning platform and a mobile app, IPM Mobile.
Launched in 2014, IPM Mobile represents the most significant milestone in the development of the IPM tool. Customs officers can now use the IPM tool to check product information in the field. The new mobile app has been redesigned to provide a more ergonomic, user-friendly and intuitive digital tool, taking into consideration the technical suggestions contributed by law enforcement officers who used it extensively during several testing sessions in Ireland, the United Arab Emirates, Israel and the United States (as part of a Department of Homeland Security investigation).
The changes are both architectural and visual. Particular emphasis has been placed on offering users the ability to search for a product simply by scanning the barcode and, where available, verify a product’s authenticity using security features. This functionality helps customs officers to access actionable information intuitively and efficiently.
The development of IPM database access for customs officers around the globe via their mobile phones will aid in productivity by streamlining the product identification process and facilitating optimal collaboration with rights holders. In order to succeed in the fight against counterfeiting, it is imperative to enhance cooperation and increase dialogue with the private sector; IPM Mobile promises to do this.
IPM Mobile is currently available for all WCO members using both Android and iOS. The new platform also includes a powerful set of analytical tools, generating an unprecedented wealth of information and data. The security parameters of IPM Mobile are also of a high standard, with encrypted data at multiple levels, tailored to the needs of each customs administration.
The WCO has also introduced IPM Connected, an extra service on IPM Mobile which gathers a multitude of security solutions providers under the same umbrella. These security features are interfaced with the IPM tool, allowing customs officers to check the authenticity of a given product directly by scanning a unique code (eg, alpha numerical code, QR code or RFID code) and receive actionable data on the spot. Over 20 security features providers have already signed up to the IPM platform.
Further, the new architecture of the IPM platform permits interfacing with external databases, such as the global data synchronisation network (GDSN) data pools. When a customs officer searches for a product, the IPM tool searches its database and if no result is found or if extra information needs to be displayed, a secondary data source will be consulted. So far, the WCO is in the process of interfacing with several external databases, including GDSN and Global Recall.
Tackling emerging counterfeit products: pesticides
Recent customs capacity-building activities in the area of IP rights, such as national and sub-regional training seminars and interception operations (ie, Biyela, Biyela 2, Channel Gate and Balkan Gate), coupled with the increase in the number of cases, have prompted WCO members to take action on the traffic in illicit and counterfeit pesticides and fertilisers.
By their very nature, pesticides and fertilisers raise economic, health and security issues at every stage of the product lifecycle: research and development, production, storage, transport, distribution, use, container management and the management of obsolete stock. The introduction of untracked constituents into the lifecycle of these products can have potentially dangerous repercussions for human and animal health, the environment, security and the economy.
Several other international organisations have also addressed this issue, including:
- the Organisation for Economic Cooperation and Development (OECD);
- the Food and Agriculture Organisation of the United Nations;
- the United Nations Environment Programme;
- the Office for Harmonisation in the Internal Market;
- the European Anti-fraud Office (OLAF); and
- the United Nations Inter-regional Crime and Justice Research Institute (UNICRI).
In 2007 the OECD estimated that illicit pesticides accounted for between 5% and 7% of the global market in pesticides. In 2011 this share rose to 10% (Guyer and Davreaux, 2012). EUROPOL estimated in 2012 that 25% of certain EU countries’ pesticides might be counterfeit.
Therefore, at the 34th session of the WCO Enforcement Committee, the WCO was asked to examine the issue further, including the possibility of conducting an operation in this specific field.
The WCO has undertaken several actions since the request was made.
Cooperation with private sector
The WCO has held several meetings with industry representatives Croplife International and the European Crop Protection Association. These exchanges deepened the WCO’s understanding of the issues and challenges encountered by the private sector, and the proposed responses thereto.
Coordination with international organisations
The issue of illicit pesticides is on the agenda of many international bodies. The WCO is interacting with these partners, again in order to understand all aspects of the issue and share experiences in this field.
For example, the WCO has been invited by EUROPOL and OLAF to participate in events and conferences where the subject of illicit pesticides was raised. Recently, the WCO participated in an expert workshop on counterfeit and illegal pesticides. Further, UNICRI has published a research paper aimed at enhancing knowledge of illicit pesticides and identifying the parties involved, including organised crime networks, with a view to understanding how they operate and the vulnerabilities of the supply chain. In addition, UNICRI has recently launched a programme to promote an international strategy for combating organised crime that affects the environment, including the traffic in illicit pesticides.
Specific CEN category
The Customs Enforcement Network (CEN) is a digital database offering the possibility to share and disseminate information on customs offences in a timely, reliable and secure manner. Information shared on the CEN is used to identify new criminal trends and techniques. Further, such information forms the basis for risk analysis. Within the suite of tools available for WCO members is CENcomm, a secure communication platform which enables intelligence to be shared among customs and participating agencies during enforcement operations.
In order to obtain a more accurate picture of the illicit pesticides phenomenon, it has been suggested that a specific commodity category be created within the CEN. At present, pesticides are covered by the commodity categories of ‘other restrictions and prohibitions’ or ‘IP rights’, depending on the nature of the infringement.
Creating a new commodity in the CEN can prove complicated as it entails IT development work and has implications for legacy data already in the system.
In order to add pesticides as a separate commodity, the CEN programme team must receive an official request and then assess:
- the funding requirements associated with the development work;
- the impact on the system and users; and
- perceived benefits of the change.
The request, along with cost/benefit analysis, will subsequently be presented to the CEN management team for a final decision.
Since Operation Biyela in 2013, pesticides have become one of the specific targets of many WCO interception operations. Although the results in this area are not yet conclusive, there is no doubt that these operations enhance the knowledge of the field customs officers who receive training on them.
These operations are also made possible through cooperation with the companies in the pesticides sector, which are particularly active where this matter is concerned. For example, four of these companies are currently IPM members.
The WCO will continue to gather knowledge for the fight against illicit pesticides in line with its current approach, which is based on the following pillars:
- partnership with private and public-sector operators;
- inclusion of pesticides in training and field operations aimed at building customs capacity; and
- creation of a specific commodity category within the CEN.
More generally, capacity-building activities will remain a key priority for the WCO in the years ahead as it enhances the enforcement capacities of its member customs administrations worldwide. The WCO is aware of the various obstacles and challenges that customs officers face in the field. Training and hands-on experience remain the best ways to improve the work of frontline officers and enable them to fight the trade in counterfeit and illicit goods.
Analysing and dealing with emerging trends, facilitating the exchange of information and offering the latest technology to help customs officers with their daily work is at the heart of the WCO’s mandate. The WCO will continue to fight counterfeit and pirated goods and their threat to the health and safety of consumers.
World Customs Organization
Rue du Marché, 30
Tel +32 2 209 92 11
Fax +32 2 209 92 62