Free trade zone (FTZ) agreements can help in the war against counterfeit imports, notes Veronika Nikishina, Minister of Trade at the Eurasian Economic Commission. "We believe that any civilized agreement is an advantage for us."Business

Eurasian Economic Union to combat counterfeit imports from Asia

November 25, 2016 Kira Egorova, RBTH
The countries of the Eurasian Economic Union are beginning to fight counterfeit imports with the help of radio-frequency identification (RFID). Starting on January 1, 2017, RFID tags will be used to identify all imported medicine. The announcement was made by Russian Minister of Industry and Trade Denis Manturov at the Anti-Counterfeit 2016 International EAEU Forum, which was held in Yerevan on Nov. 22.

Authorities are planning to label consumer goods, particularly clothes and footwear, as well as aviation components and valuable wood, said the minister. The EAEU already tested identifying imported goods in April 2016 when the RFID tags were placed on furs.

Counterfeit goods from China

In 2015, the value of illegal goods on the international market was estimated at $461 billion. About 60 percent of the goods came from China, noted Timur Suleimenov, Minister of Economy and Financial Policy at the Eurasian Economic Commission, at the forum.

“China exports consumer goods to Russia that have an annual value of more than $10 billion, yet Russian customs records the import of goods worth only $5 billion,” explained Manturov. “That means another $5 billion disappear somewhere and do not go into the nation’s budget.”

According to Manturov, Kazakhstan and Kyrgyzstan have an even bigger problem with Chinese counterfeiting: Chinese exports to each country is estimated at about $3 billion, but official import data say that the value is below $300 million.

The EAEU is conducting trade talks with China, in the course of which certain anti-counterfeit regulations are being suggested. However, the main challenge of counterfeit goods is not with China, but rather the absence of traceability within the EAEU markets, believes Manturov. He added that a single Eurasian code is being prepared as one of the measures to fight counterfeit imports at customs.

The role of free trade

Free trade zone (FTZ) agreements can help in the war against counterfeit imports, notes Veronika Nikishina, Minister of Trade at the Eurasian Economic Commission. “We believe that any civilised agreement is an advantage for us.”

In 2015, the EAEU signed a FTZ agreement with Vietnam, which included anti-counterfeit measures. Nikishina said the Eurasian Economic Commission plans to seek feedback from businesses on the measures’ effectiveness. In the future, this practice will be used for other trade agreements. The EAEU is currently negotiating FTZs with Thailand, Iran, India, Singapore, Egypt and Mongolia.

Counterfeit food and clothes

Manturov says that illegal production makes up anywhere from 5 to 30 percent in various sectors of Russia’s economy. The biggest sector is in consumer goods, where there is a high level of counterfeit and poor quality items. Inspections carried out by the Russian Quality Service have identified discrepancies in children’s clothes and men’s shirts imported from China, Vietnam and Bangladesh. “Although 80 percent of the materials was listed as natural, in the end everything was 100 percent synthetic,” Director of the Russian Quality Service Maxim Protasov told RBTH at the forum.

Protasov asserted that foreign goods packaged in Russia are frequently sold with Russian trademarks. For example, rice from Myanmar or Indian pickles are packaged in Russian and sold under the designation “Russian products,” explains Protasov.

To identify the brand and the manufacturing country, the Russian Quality Service implemented genetic food product examination (DNA sequencing). Protasov remarks that Germany, the UK, Austria and other countries already use an equivalent process. The Russian Quality Service intends to create a global DNA library for places of origin and soil samples, as well as a genetic base of the various types of crops.

Source: Russia Beyond The Headlines


According to the U.S. FBI, the counterfeiting of pharmaceuticals accounts for an estimated $600 billion in global trade, and may be the “crime of the 21st century.” They add that it “poses significant adverse health and economic consequences for individuals and corporations alike.” The World Health Organization (WHO) estimates that over 30% of pharmaceuticals in developing countries are fake, stating that “Anyone, anywhere in the world, can come across medicines seemingly packaged in the right way but which do not contain the correct ingredients and, in the worst-case scenario, may be filled with highly toxic substances.” The U.S. Food and Drug Administration(FDA) describes counterfeit drugs as those sold under a product name without proper authorization:

“Counterfeiting can apply to both brand name and generic products, where the identity of the source is mislabeled in a way that suggests that it is the authentic approved product. Counterfeit products may include products without the active ingredient, with an insufficient or excessive quantity of the active ingredient, with the wrong active ingredient, or with fake packaging.”

Experts estimate that counterfeit medications kill at least 700,000 people a year, mostly in undeveloped countries. According to The Economist, between 15%-30% of antibiotic drugs in Africa and South-East Asia are fake, while the UN estimates that roughly half of the antimalarial drugs sold in Africa—worth some $438m a year—are counterfeit.

Pfizer Pharmaceuticals has found fake versions of at least 20 of its products, such as Viagra and Lipitor, in the legitimate supply chains of at least 44 countries. Pfizer also found that nearly 20% of Europeans had obtained medicines through illicit channels, amounting to $12.8 billion in sales. Other experts estimate the global market for fake medications could be worth between $75 billion and $200 billion a year, as of 2010.

Other counterfeit prescription drugs that have been found in the “legitimate” supply chain are Plavix, used to treat blood clots, Zyprexa for schizophrenia, Casodex, used to treat prostate cancer, Tamiflu, used to treat influenza, including Swine flu, and Aricept, used to treat Alzheimers. The EU reported that as of 2005 India was by far the biggest supplier of fake drugs,” accounting for 75 per cent of the global cases of counterfeit medicine. Another 7% came from Egypt and 6% from China. Those involved in their production and distribution include medical professionals such as pharmacists and physicians, organised crime syndicates, rogue pharmaceutical companies, corrupt local and national officials and terrorist organisations.

Anti-counterfeiting packaging

Packaging can be engineered to help reduce the risks of package pilferage or the theft and resale of products: Some package constructions are more resistant to pilferage and some have pilfer indicating seals. Counterfeit consumer goods, unauthorized sales (diversion), material substitution and tampering can all be reduced with these anti-counterfeiting technologies. Packages may include authentication seals and use security printing to help indicate that the package and contents are not counterfeit; these too are subject to counterfeiting. Packages also can include anti-theft devices, such as dye-packs, RFID tags, or electronic article surveillance tags that can be activated or detected by devices at exit points and require specialized tools to deactivate. Anti-counterfeiting technologies that can be used with packaging include:

  • Taggant fingerprinting – uniquely coded microscopic materials that are verified from a database
  • Encrypted micro-particles – unpredictably placed markings (numbers, layers and colors) not visible to the human eye
  • Holograms – graphics printed on seals, patches, foils or labels and used at point of sale for visual verification
  • Micro-printing – second line authentication often used on currencies
  • Serialized barcodes
  • UV printing – marks only visible under UV light
  • Track and trace systems – use codes to link products to database tracking system
  • Water indicators – become visible when contacted with water
  • DNA tracking – genes embedded onto labels that can be traced
  • Color shifting ink or film – visible marks that switch colors or texture when tilted
  • Tamper evident seals and tapes – destructible or graphically verifiable at point of sale
  • 2d barcodes – data codes that can be tracked


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