BASCAP challenges intermediaries on counterfeits

Shipping firms and other supply chain intermediaries should do more to help keep fake and pirated goods off the market, says a new report.

The Business Action to Stop Counterfeiting and Piracy (BASCAP) - a unit formed by the International Chamber of Commerce - says both physical intermediaries and those providing online services such as Internet service providers (ISPs) and search engines have "a number of shortcomings" and should "enhance their systems to prevent the sale of counterfeit goods and pirated content."

The BASCAP paper aims to raise awareness of intermediaries' vulnerabilities to criminal activity and find new ways to tackle the gaps in their processes that allow fake and pirated to infiltrate the supply chain.

The report is broad in scope, covering raw materials and component suppliers, transport operators, landlords, as well as online intermediaries, and gives examples of best practices that are both specific to a particular group and applicable across multiple types.

Among the measures recommended in the report include the establishment and enforcement of clear contract terms, development of a clear knowledge and understanding of commercial partners and industry standards/codes of practice, and the use of automated tools to identify suspect transaction patterns.

It also supports the use of technologies such as track-and-trace, content filtering and content verification to help block illicit goods in real-term, but points out that "intermediaries' adoption of preventative tools should be in proportion to the risk or reality of high-volume abuse."

The report acknowledges however that intermediaries play an essential role in bringing a product from its conception to design, assembly, manufacture, marketing and distribution to the final consumer - noting they are the "backbone of commerce".

"Most intermediaries, when better informed about potential exploitation and the damage done by counterfeiting and piracy, demonstrate a willingness to secure their portion of the supply chain from abuse," said BASCAP Director Jeff Hardy.

"With the publication of this study no company can now say 'this is not my responsibility' or 'there is nothing we can do'."

According to the OECD more than $250bn in counterfeit goods moves across borders each year. When Internet infringements, in-country sales or indirect losses to governments and consumers are included, the estimated global impact of these illegal activities could add up to more than $1.7trn annually.