Real or Fake?
Counterfeit Trafficking.

Real or fake... What's the big deal?

So what's wrong with wearing fake football jerseys and baseball caps? Or fake Tag watches, Louis Vuitton bags, computer software, DVDs and CDs?

Real or fake... The Real Deal.

The fact is it hurts a lot of people.

  • It hurts the people who are often forced to work in sweat shops as slave labor under unhealthy conditions.

  • It hurts the environment when industrial waste and toxins are dumped illegally to skirt regulations and cut costs.

  • It hurts government revenue (and spending on hospitals, education, etc) when taxes are avoided.

  • It kills people when counterfeit medicines don't work (and even contain harmful chemicals).

  • It kills people when watered-down medicines help to breed super bugs that kill people.

  • It kills people when fake parts cause airplanes or cars to crash.

  • It hurts leading companies that suffer financially and discourages new research & development and quality control.

  • It ends up costing jobs in the real economy. The International Chamber of Commerce (* ref:ICC) estimates up to 2.5 million legitimate jobs are put at risk each year.

Real or fake... The Global Economy.

Facts & Figures
  • Counterfeit products make up to 7% of world trade.

  • Counterfeiting will reach US$1.8 trillion by 2015... (International Chamber of Commerce).

  • Of this around $960 billion will be International Counterfeit Trade, and $570 billion domestic. *

  • Of the 2.5 million legitimate jobs lost each year, 380,000 are in the UK and 480,000 in Mexico.*

  • European border seizures increased tenfold over the past 10 years... 57% involved clothes & accessories, 10% jewelry & watches, 7% electrical equipment.*
* (ref: ICC).

Real or fake... Is Nothing Safe?

News Flash: November 6, 2012 The Australian.

South Korea was forced to shut down 2 nuclear reactors after it was discovered non-nuclear grade parts with fake quality certificates had been installed.

Government authorities insisted the fake parts were "non-core" components (e.g. switches and fuses) but conceded that closure of the reactors would cause severe power shortages during South Korea's bitterly cold winter.

The scam involved 7,700 fake parts (worth $750,000), 8 suppliers, and 60 fake warranties.

Facts & Figures
  • Targeting the Chinese nouveau riche taste for high quality foreign wines, counterfeiters are madly churning out fakes. "In 2008, a French vintner at a wine auction was "shocked to discover that '106 bottles out of 107' were fakes"... (ref:Wikipedia). Many merchants have started smashing empty bottles of premium wines to prevent them being refilled with cheap wine and resold.

  • In 2008 Chinese milk adulterated with Melamine (to make protein content look higher) caused 6 deaths and put 900 babies into hospital... (ref:Wikipedia).

  • In 2008 10,000 cases of fake extra virgin olive oil (which was actually 90% soybean oil) worth $700,000 was seized in a New York warehouse... (ref: Wikipedia).

  • A shipment of fake cigarettes valued at $2 million dollars was seized by Spanish Customs in the Canary Islands. They were filled with rabbit droppings... "They stunk. They smell just as you'd imagine burning poo to smell... the toxic chemicals they give off are pure poison"... (The Daily Telegraph, 11/17/2009).

  • Up to 50% of Zippo cigarette lighters around the world are fake.

  • A farmer in Jaipur, India suffered fatal head and neck injuries from an exploding mobile phone with a suspected counterfeit battery... (The Times Of India, 8/18/2010). Several other deaths and hundreds of injuries have also been recorded from exploding batteries.

  • "...the Federal Aviation Administration issued a safety alert after a cargo plane carrying a large shipment of batteries went on fire and crashed near Dubai, killing both pilots."... MailOnline, 11/30/2011.

  • In the 1990s many fires in Egypt were attributed to counterfeit electrical circuit breakers and made worse by fake fire hydrants... (IACC 2005).

  • In 2003-4 the International Anti Counterfeiting Council said there were 88 Chinese manufacturers making fake Yamaha motor bikes, and nearly 85% of motor bike sales in China were counterfeit... ( 2004).

Real or Fake... Counterfeit Medicines.

Some fake medicines contain no active ingredient; some too much; some contain harmless and useless substances like chalk, cement or talcum powder, while others contain cheap, toxic chemicals used in everything from floor polish to rat poison.

The perpetrators range from small backyard operators to sophisticated transnational organized crime groups.

A pharmaceutical company investigator in China said "The effort they spend on the pill is nothing... but the level of detail they spend on the packaging is phenomenal"... (The Telegraph, April 2008).The average person has absolutely no way of telling whether the medication is real or fake.

Counterfeit Drugs... Fake Drugs on the Internet

.... Real or Fake?

Facts & Figures
  • Fake Medicines kill over 1 million people each year.

  • Up to 15% of all drugs sold worldwide are fake... (Dr Sneh Khemka, BUPA 2011).

  • This rises up to 30% in the developing world... (WHO).

  • Around 700,000 people die each year from counterfeit Malaria & Tuberculosis drugs... (WHO, Akunyili 2011).

  • 50-67% of anti-malarial drugs sold in parts of Africa (Ghana, Zimbabwe, Mali, Kenya) and Asia (Laos, Myanmar, Cambodia, Vietnam) are fake or sub-standard.

    Dan Rather Reports on Fake Drugs in Africa.

    .... Real or Fake?

  • In 2000 Belgian Customs seized 43 tons of counterfeit anti-malarials & antibiotics on route to Nigeria from China.

  • 80% of active ingredients in U.S. prescription drugs are now manufactured overseas increasing the risk of fakes.

  • In 2008 a fake version of the blood thinner Heparin caused dozens of deaths in the U.S.A. and hundreds of allergic reactions.

  • February 2012 pharmaceutical giant Roche warns of counterfeit vials of its anti-cancer drug Avastin (worth $6 billion a year at $2,400 a vial).

  • Diethylene glycol packaged as cough syrup caused acute renal failure and hundreds of deaths in Haiti, Nigeria, Bangladesh, India and Argentina... (Research Journal of Medical Sciences 2011).

  • 300,000 deaths occur per year in China from fake medication... (Feeney, Goldsmith, Hawryluk, Lewis, Riemanapp, Shyam April 2007).

  • In 2004 a British man was jailed for 5 years for producing up to 500,000 fake Viagra tablets per day in a Wembley factory; he'd sold up to 6 million English Pounds worth but non was recovered.

  • Most fake medicines originate in India, China, and the Russian Federation with significant operations in Nigeria and the Philippines.

    Russian Fake Medicines.

    .... Real or Fake?

  • "(China's) State Food and Drug Administration (FDA) reports having closed down over 9,000 unlicensed pharmaceutical manufacturers and "eradicated" 388 counterfeiting operations in 2007"... (UNODC 2010).

Further example of counterfeit medicines:

... totally ineffective copies of Infuenza/Swine Flu drug Tamiflu.
... useless contraceptive pills purchased on the Internet.
... blood-thinning tablets (Plavix has been copied).
... blood pressure pills (Adalat has been copied).
... cholesterol lowering pills (Lipitor has been copied).
... anti-asthma drugs (Ventolin has been copied).
... medical devices like pacemakers, & medical implants may be at risk (UNODC).
... immunosuppressant drugs used in organ transplants.
... fake and useless antibiotics.
... expiration dates falsified on packaging.
... fake glucose test strips for diabetes.
... fake Schizophrenia drug Zyprexa.
... fake Alzheimers drug Aricept.

The truth is... Any medication can be targeted.

The more expensive the medication is, the more likely it will be counterfeited. Fake tablets can be produced for a few cents and sold for 50 or hundreds of times more.

The rewards are huge, but the risk of getting caught and sentences meted out much less than for other crimes.

News Flash:
New mobile phone app by Sproxil helps in the war against counterfeit drugs.

Published on 4 Mar 2013 by wsaTV:

Malaria kills over a million a year -- a simple text message could prevent 20% of those deaths. MPedegree has developed an application that allows anyone in a developing nation with a cell phone to check their drugs before use. It works via a simple text message, accessible by default on all phones! Armed with a simple cell phone, we all could prevent this imense killing from happening, doing a world of social good.
Real or Fake?... Counterfeit drugs.

Real or fake... Automobile Spare Parts.

Facts & Figures
  • Up to 10% of auto parts sold in Europe, 30% in the Middle East, and 47% in India are fake... (IACC).

  • Up to 36,000 deaths and 1.5 million injuries were caused by counterfeit auto parts (based on WHO estimate of 1.2 million deaths annually in road crashes, and automobile manufacturer insider reports attributing 3% of these to defective components)... (Dr Majid Yar, Kent University at Canterbury, 2005).

  • Fake brake pads have caused "a number of fatal accidents: in Saudi Arabia a mother and child were recently killed due to the failure of counterfeit brakes (Ross, 2004); similarly, in 1987, 7 children died when their school bus crashed, attributed to brakes manufactured from sawdust (IACC, 2003); a similar case was recorded in Canada when 15 were killed when a bus fitted with counterfeit brake linings careered over a cliff (Carrutu Int'l: 1996:3)"... (Dr Majid Yar 2005).

  • The Motor & Equipment Manufacturers Assoc. estimated that 750,000 jobs were lost in 2004 due to counterfeiting.

  • Auto suppliers lost around $45 billion world wide to counterfeiters... (U.S. Dept Commerce 2011).
Thursday, 29 September 2011, Zeena Zalamea, Dubai...
"Authorities and traders in the UAE are waging a war against sellers of counterfeit car parts, which comprise 15 to 20 per cent of the country's automotive products".

.... Real or Fake?

"German car makers and their component suppliers are among the most affected by brand name forgeries. It can be almost impossible to tell forgeries from the genuine article, especially in the after sales market, where garages are supplied with spare parts.

.... Real or Fake?

Real or fake... Computer & Digital Piracy.

Facts & Figures
  • Counterfeit software and movies will account for up to $240 billion by 2015... (ref:ICC).

  • The International Federation of the Phonographic Industry (IFPI) projects 1.2 million jobs in the European creative industries will be lost by 2015 due to piracy.

  • Counterfeit CDs and DVDs are blamed for a 31% revenue slump in the recorded music industry from 2004-2010... (IFPI).

  • At the end of 2008 there were over 1 billion PCs... almost 50% had counterfeit software installed.

  • 22 fake Apple computer stores were discovered operating in China in 2011... (ref:Wikipedia)

  • A 7 year old British boy died from electrocution in 2007 while on vacation in Phuket, Thailand. His father had bought him a new charger for his "Gameboy" (they'd forgotten the original at home) at a local market stall. The inquest found the wiring was faulty and the device was "effectively live".

Counterfeit Electronic Components Process...
Uploaded by AAACTL Jan 3, 2011.

.... Real or Fake?
New and original microchips are harder and harder to find, especially "end of life" or obsolete components. Chip recycling is big business in China. It is a multi-billion dollar per year industry and is very closely guarded. The small microchip recycling house on this video generates approximately $1M each year. The majority of the boards are from the USA and Russia. AAACTL was fortunate enough to have access to a number of small recycling houses and witness their processes. This video shows how microchips are being harvested. Most of the boards are stored outside in open air, with water damage, and absolutely no ESD protection.

Real or fake... Aircraft & Military Spares.

Facts & Figures
  • In 1989 Norwegian Partnair Flight 393 crashed from 22,000 feet killing all 55 people on board. The tail of the aircraft broke off after counterfeit bolts failed.

  • In 1997 it was admitted by the Dept. of Transportation that counterfeit parts had been detected on Air Force One (the U.S. President's plane).

  • "An FAA (U.S.) study concluded that from May 1973 to April 1996 unapproved parts contributed to 174 aircraft accidents and minor incidents, causing 39 injuries and 17 fatalities"... (ref: Wikipedia).
    * Some sources believe these figures are greatly understated.

  • In 2009, counterfeit parts were found on new U.S. Navy P-8 Poseidon aircraft. Old computer parts had been sanded down, refurbished, remarked, and sold back as brand new.

  • In 2011 a U.S. Senate Armed Services Committee collected a database on 1,800 instances of counterfeit parts in the Military Supply Chain... totalling some 1 million fake parts.

    Counterfeit Parts Found in US Military Hardware "ticking time bombs"...

    ... Real or Fake ?

  • "Illegally imported fake airplane parts pose a great risk to flight safety in Russia on both military and commercial aircraft"... The St. Petersburg Times, November 2010. Russian Ministry of Transport statistics revealed out of 60,000 aircraft parts inspected 25% were counterfeit.

    Russia angry at China for copying military hardware...

    ... Real or fake ?

  • Investigations into the crash of Concorde Air France Flight 4590 on 25 July 2000 (which killed all 109 on board) found it was partly attributable to a metal strip which had fallen off a Continental Airlines DC-10 which had taken off minutes earlier. The titanium strip (which "was installed in violation of the manufacturer's rules") burst a tyre on the Concorde setting of a chain of events that led to the catastrophe... (ref: Wikipedia).

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Who Ate My Lunch?
by Eugene Roberts

cover who ate my lunch

The Internet Revolution, Globalization, and the Global Financial Crisis created the perfect storm... Old Business models are being destroyed and jobs are disappearing offshore at an astonishing rate. Analysts warn that "China and India are poised to out-think us and out-compete us by their sheer numbers" and that "there is no job security now".

Watch the video on YouTube.

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