Difference between revisions of "Counterfeiting" - New World Encyclopedia

From New World Encyclopedia
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==Definitions==
 
==Definitions==
This covers a wide range of consumer items, from outright fakes in the sense that they are non-functional lookalikes (e.g. prescription drugs, computer [[flash drive]]s), functional but inferior items ([[Memory Stick]]s, blank [[videotape]]s) to fully functional items illegally manufactured without paying copyright fees (music from [[Compact Disc|CDs]], movies on [[DVD]]s, or [[computer software]]on CD or DVD). In the latter case, there is often little or no attempt at disguising its origin as the end user will be aware that the counterfeit product will work at least as well (and sometimes better than) the original. The alternative term [[bootleg]] is more often used for this type of conterfeiting, where the user is fully aware of its illegal status.
+
This covers a wide range of consumer items, from outright fakes in the sense that they are non-functional lookalikes (e.g. prescription drugs, computer [[flash drive]]s), functional but inferior items ([[Memory Stick]]s, blank [[videotape]]s) to fully functional items illegally manufactured without paying copyright fees (music from [[Compact Disc|CDs]], movies on [[DVD]]s, or [[computer software]]on CD or DVD). In the latter case, there is often little or no attempt at disguising its origin as the end user will be aware that the counterfeit product will work at least as well (and sometimes better than) the original. The alternative term [[bootleg]] is more often used for this type of counterfeiting, where the user is fully aware of its illegal status.
  
 
By contrast, a '''knockoff''' item may imitate a well-known one, may be sold for a lower price, and may be of inferior quality, but there is usually no attempt to deceive the buyer or infringe upon brand names, patents, trademarks or copyrights. An example of a knockoff item is [[Dynacell]] batteries.
 
By contrast, a '''knockoff''' item may imitate a well-known one, may be sold for a lower price, and may be of inferior quality, but there is usually no attempt to deceive the buyer or infringe upon brand names, patents, trademarks or copyrights. An example of a knockoff item is [[Dynacell]] batteries.
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There has been a rapid growth in the counterfeiting of [[Euro]] banknotes and coins since the launch of the currency in 2002. In 2003, 551,287 fake euro notes and 26,191 bogus euro coins were removed from EU circulation. In 2004, French police seized fake 10 euro and 20 euro notes worth a total of around €1.8 million from two laboratories and estimated that 145,000 notes had already entered circulation.
 
There has been a rapid growth in the counterfeiting of [[Euro]] banknotes and coins since the launch of the currency in 2002. In 2003, 551,287 fake euro notes and 26,191 bogus euro coins were removed from EU circulation. In 2004, French police seized fake 10 euro and 20 euro notes worth a total of around €1.8 million from two laboratories and estimated that 145,000 notes had already entered circulation.
  
The spread of counterfeit goods has become global in recent years. It is currently estimated that Counterfeit Goods consists of 5 to 7% of World Trade, ranging in losses between 500 Billion and 600 Billion U.S. Dollars. In the early years of the 21st century, the [[United States Secret Service]] has noted a substantial reduction in the quantity of forged U.S. currency, as counterfeiters turn their attention towards the [[Euro]].
+
The spread of counterfeit goods has become global in recent years. It is currently estimated that Counterfeit Goods consists of 5 to 7% of World Trade, ranging in losses between 500 Billion and 600 Billion U.S. Dollars. In the early years of the 21st century, the [[United States Secret Service]] has noted a substantial reduction in the quantity of forged U.S. currency, as counterfeiters turn their attention towards the [[Euro]].
  
In 2006, a Pakistani government printing press in the city of Quetta was accused of churning out large quantities of counterfeit Indian currency, The Times of India reported based on Central Bureau of Intelligence investigation.  The rupee notes are then smuggled into India as 'part of Pakistan's agenda of destabilising (the) Indian economy through fake currency,' the daily said. The notes are 'supplied by the Pakistan government press (at Quetta) free of cost to Dubai-based counterfeiters who, in turn, smuggle it into India using various means,' the report said.<ref name="ForbesIndia">[http://www.forbes.com/business/feeds/afx/2006/09/18/afx3023363.html Pakistan printing fake Indian currency - Times of India] at [[Forbes]]</ref><ref>[http://timesofindia.indiatimes.com/articleshow/2000570.cms Most fake rupee notes are coming from Quetta] Times of India. Retrieved March 17, 2007.</ref> This money is allegedly used to fund terrorist activities inside India. It has been alleged that terrorist bombings of trains in Mumbai were funded by money counterfeited in Pakistan.<ref>http://india-alert.blogspot.com/2007/02/mk-narayanans-speech-at-43rd-munich.html MK Narayanan's speech at the 43rd Munich Conference on Security Policy] India Alert. Retrieved March 17, 2007.</ref>
+
In 2006, a Pakistani government printing press in the city of Quetta was accused of churning out large quantities of counterfeit Indian currency, The Times of India reported based on Central Bureau of Intelligence investigation.  The rupee notes are then smuggled into India as 'part of Pakistan's agenda of destabilizing (the) Indian economy through fake currency,' the daily said. The notes are 'supplied by the Pakistan government press (at Quetta) free of cost to Dubai-based counterfeiters who, in turn, smuggle it into India using various means,' the report said.<ref name="ForbesIndia">[http://www.forbes.com/business/feeds/afx/2006/09/18/afx3023363.html Pakistan printing fake Indian currency - Times of India] at [[Forbes]]</ref><ref>[http://timesofindia.indiatimes.com/articleshow/2000570.cms Most fake rupee notes are coming from Quetta] Times of India. Retrieved March 17, 2007.</ref> This money is allegedly used to fund terrorist activities inside India. It has been alleged that terrorist bombings of trains in Mumbai were funded by money counterfeited in Pakistan.<ref>http://india-alert.blogspot.com/2007/02/mk-narayanans-speech-at-43rd-munich.html MK Narayanan's speech at the 43rd Munich Conference on Security Policy] India Alert. Retrieved March 17, 2007.</ref>
  
 
==== Money art ====
 
==== Money art ====
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===Counterfeiting of consumer goods===
 
===Counterfeiting of consumer goods===
  
In the United States, the [[FBI]] estimates that American companies lose up to $250 billion annually due to counterfeit goods. According to the Organisation for Economic Co-operation and Development as well as the European Commission, counterfeit goods are responsible for the loss of 100,000 jobs in Europe each year.<ref>[http://www.ccapcongress.net/First/fsheet5.doc First Global Congress on Combating Counterfeiting] The Third Global Congress on Combating Counterfeiting and Piracy. Retrieved March 17, 2007.</ref>
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In the United States, the [[FBI]] estimates that American companies lose up to $250 billion annually due to counterfeit goods. According to the Organisation for Economic Co-operation and Development as well as the European Commission, counterfeit goods are responsible for the loss of 100,000 jobs in Europe each year.<ref>[http://www.ccapcongviress.net/First/fsheet5.doc First Global Congress on Combating Counterfeiting] The Third Global Congress on Combating Counterfeiting and Piracy. Retrieved March 17, 2007.</ref>
  
 
Certain [[final good|consumer goods]], especially very expensive or desirable brands, or those which are easy to reproduce cheaply, have become popular among counterfeiters, who attempt to deceive the consumer into thinking they are purchasing a legitimate item, or convince the consumer that they could deceive others with the imitation.  An item which doesn't attempt to deceive, such as copy of movie with missing or different cover art, is often called a "bootleg" or a "pirated copy" instead.
 
Certain [[final good|consumer goods]], especially very expensive or desirable brands, or those which are easy to reproduce cheaply, have become popular among counterfeiters, who attempt to deceive the consumer into thinking they are purchasing a legitimate item, or convince the consumer that they could deceive others with the imitation.  An item which doesn't attempt to deceive, such as copy of movie with missing or different cover art, is often called a "bootleg" or a "pirated copy" instead.
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Illegal street drugs may also be counterfeited, either for profit or for the deception of rival drug distributors or narcotics officers.
 
Illegal street drugs may also be counterfeited, either for profit or for the deception of rival drug distributors or narcotics officers.
  
A '''counterfeit drug''' or a '''counterfeit medicine''' is a [[medication]] which is produced and sold with the intent to deceptively represent its origin, authenticity or effectiveness.  The common street term for counterfeit drug is "beat bag." A counterfeit drug may be one which does not contain [[active ingredient]]s, contains an insufficient quantity of active ingredients, or contains entirely incorrect active ingredients (which may or may not be harmful), and which is typically sold with inaccurate, incorrect, or fake packaging. Fake medicines and [[generic drug]]s which are deliberately mislabeled in order to deceive [[consumer]]s are therefore counterfeit, while a drug which has not received regulatory approval is not necessarily so.
+
A '''counterfeit drug''' or a '''counterfeit medicine''' is a [[medication]] which is produced and sold with the intent to deceptively represent its origin, authenticity or effectiveness.  The common street term for counterfeit drug is "beat bag." A counterfeit drug may be one which does not contain [[active ingredient]]s, contains an insufficient quantity of active ingredients, or contains entirely incorrect active ingredients (which may or may not be harmful), and which is typically sold with inaccurate, incorrect, or fake packaging. Fake medicines and [[generic drug]]s which are deliberately mislabeled in order to deceive [[consumer]]s are therefore counterfeit, while a drug which has not received regulatory approval is not necessarily so.
  
 
Counterfeit drugs can generally be classified by the following characteristics:
 
Counterfeit drugs can generally be classified by the following characteristics:
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* falsely-labeled substances whose combined active ingredients meet one or more of the preceding criteria.<ref name="Classify000">BBC Two "Bad Medicine" broadcast on Tuesday 2005 July 12.</ref>
 
* falsely-labeled substances whose combined active ingredients meet one or more of the preceding criteria.<ref name="Classify000">BBC Two "Bad Medicine" broadcast on Tuesday 2005 July 12.</ref>
  
An individual who applies a counterfeit medication may experience a number of dangerous consequence to their [[health]], such as unexpected [[Adverse drug reaction|side effects]], [[allergy|allergic reactions]], or a worsening of their medical condition.  A number of counterfeits do not contain any active ingredients, and instead contain [[inert]] substances, which do not provide the [[patient]] any treatment benefits. Counterfeit medications may also contain incorrect ingredients, improper dosages of the correct ingredients, or they may contain hazardous ingredients.
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An individual who applies a counterfeit medication may experience a number of dangerous consequence to their [[health]], such as unexpected [[Adverse drug reaction|side effects]], [[allergy|allergic reactions]], or a worsening of their medical condition.  A number of counterfeits do not contain any active ingredients, and instead contain [[inert]] substances, which do not provide the [[patient]] any treatment benefits. Counterfeit medications may also contain incorrect ingredients, improper dosages of the correct ingredients, or they may contain hazardous ingredients.
  
The extent of the problem of counterfeit drugs is unknown.  Counterfeiting is difficult to detect, investigate, and quantify. So, it is hard to know or even estimate the true extent of the problem.  What is known is that they occur worldwide and are more prevalent in developing countries. It is estimated that upwards of 10% of drugs worldwide are counterfeit, and in some countries more than 50% of the drug supply is made up of counterfeit drugs. Furthermore, the [[World Health Organization]] estimates that the annual earnings of counterfeit drugs are over 32 Billion U.S. Dollars.   
+
The extent of the problem of counterfeit drugs is unknown.  Counterfeiting is difficult to detect, investigate, and quantify. So, it is hard to know or even estimate the true extent of the problem.  What is known is that they occur worldwide and are more prevalent in developing countries. It is estimated that upwards of 10% of drugs worldwide are counterfeit, and in some countries more than 50% of the drug supply is made up of counterfeit drugs. Furthermore, the [[World Health Organization]] estimates that the annual earnings of counterfeit drugs are over 32 Billion U.S. Dollars.   
  
 
There are several technologies that may prove helpful in combating this problem, such as [[RFID|radio frequency identification]] which uses electronic devices to track and identify items, such as pharmaceutical products, by assigning individual [[serial number]]s to the containers holding each product. The [[FDA]] is working towards an [[Electronic pedigree]] (ePedigree) system to track drugs from factory to pharmacy. This technology may prevent the diversion or counterfeiting of drugs by allowing wholesalers and pharmacists to determine the identity and dosage of individual products. More recent innovative technology includes the use of mobile phone cameras to verify the source and authenticity of drugs within a world wide market through use of unique identifying unbreakable codes.<ref>[http://www.yottamark.com/solution/cameraphone.wmv video clip of mobile phone verification of authenticity of drugs] Yottamark. Retrieved March 17, 2007.</ref>
 
There are several technologies that may prove helpful in combating this problem, such as [[RFID|radio frequency identification]] which uses electronic devices to track and identify items, such as pharmaceutical products, by assigning individual [[serial number]]s to the containers holding each product. The [[FDA]] is working towards an [[Electronic pedigree]] (ePedigree) system to track drugs from factory to pharmacy. This technology may prevent the diversion or counterfeiting of drugs by allowing wholesalers and pharmacists to determine the identity and dosage of individual products. More recent innovative technology includes the use of mobile phone cameras to verify the source and authenticity of drugs within a world wide market through use of unique identifying unbreakable codes.<ref>[http://www.yottamark.com/solution/cameraphone.wmv video clip of mobile phone verification of authenticity of drugs] Yottamark. Retrieved March 17, 2007.</ref>
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There are a number of ways to fight counterfeiting. The two main ways are making products difficult to counter and to punish counterfeiters harshly.  
 
There are a number of ways to fight counterfeiting. The two main ways are making products difficult to counter and to punish counterfeiters harshly.  
  
Kings often dealt very harshly with the perpetrators of such deeds.  In 1162, Emperor Gaozong of the Chinese Song dynasty decreed counterfeiters of the [[Huizi (currency)]] to be punished by death and to reward the informant. The [[England|English]] couple [[Thomas Rogers and Anne Rogers]] were convicted on 15 October 1690 for "Clipping 40 pieces of Silver" (in other words, clipping the edges off silver coins).  Thomas Rogers was [[hanged, drawn and quartered]] and Anne Rogers was burnt alive.  The gruesome forms of punishment were due to the two's acts being construed as "[[treason]]", rather than simple crime.
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Kings often dealt very harshly with the perpetrators of such deeds.  In 1162, Emperor Gaozong of the Chinese Song dynasty decreed counterfeiters of the [[Huizi (currency)]] to be punished by death and to reward the informant. The [[England|English]] couple [[Thomas Rogers and Anne Rogers]] were convicted on October 15, 1690 for "Clipping 40 pieces of Silver" (in other words, clipping the edges off silver coins).  Thomas Rogers was [[hanged, drawn and quartered]] and Anne Rogers was burnt alive.  The gruesome forms of punishment were due to the two's acts being construed as "[[treason]]", rather than simple crime.
  
 
[[Image:Forged Pound Coins.jpg|thumb|right|250px|Two forged [[UK]] [[Pound sterling|pound]] coins. The left coin shows poor surface clarity, irregular reeding and no side lettering. The right coin demonstrates poor metal quality.]]
 
[[Image:Forged Pound Coins.jpg|thumb|right|250px|Two forged [[UK]] [[Pound sterling|pound]] coins. The left coin shows poor surface clarity, irregular reeding and no side lettering. The right coin demonstrates poor metal quality.]]
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In the late twentieth century advances in [[computer]] and [[photocopy]] technology made it possible for people without sophisticated training to easily copy currency.  In response, national engraving bureaus began to include new more sophisticated anti-counterfeiting systems such as [[hologram]]s, multi-colored bills, embedded devices such as strips, microprinting and inks whose colors changed depending on the angle of the light, and the use of design features such as the "[[EURion constellation]]" which disables modern photocopiers. Software programs such as [[Adobe Photoshop]] have been modified by their manufacturers to obstruct manipulation of scanned images of banknotes. There also exist patches to counteract these measures.
 
In the late twentieth century advances in [[computer]] and [[photocopy]] technology made it possible for people without sophisticated training to easily copy currency.  In response, national engraving bureaus began to include new more sophisticated anti-counterfeiting systems such as [[hologram]]s, multi-colored bills, embedded devices such as strips, microprinting and inks whose colors changed depending on the angle of the light, and the use of design features such as the "[[EURion constellation]]" which disables modern photocopiers. Software programs such as [[Adobe Photoshop]] have been modified by their manufacturers to obstruct manipulation of scanned images of banknotes. There also exist patches to counteract these measures.
  
In the 1980s counterfeiting in the [[Republic of Ireland]] twice resulted in sudden changes in official documents: in November 1984 the [[Irish punt|£1]] postage stamp, also used on savings cards for paying television licences and telephone bills, was invalidated and replaced by another design at a few days' notice, because of widespread counterfeiting. Later, the £20 [[Central Bank and Financial Services Authority of Ireland|Central Bank of Ireland]] Series B banknote was rapidly replaced because of what the Finance Minister described as "the involuntary privatisation of banknote printing".
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In the 1980s counterfeiting in the [[Republic of Ireland]] twice resulted in sudden changes in official documents: in November 1984 the [[Irish punt|£1]] postage stamp, also used on savings cards for paying television licenses and telephone bills, was invalidated and replaced by another design at a few days' notice, because of widespread counterfeiting. Later, the £20 [[Central Bank and Financial Services Authority of Ireland|Central Bank of Ireland]] Series B banknote was rapidly replaced because of what the Finance Minister described as "the involuntary privatization of banknote printing".
  
In the 1990s, the portrait of Chairman [[Mao Zedong]] was placed on the banknotes of the [[People's Republic of China]] to combat counterfeiting, as he was recognised better than the generic designs on the [[renminbi]] notes.
+
In the 1990s, the portrait of Chairman [[Mao Zedong]] was placed on the banknotes of the [[People's Republic of China]] to combat counterfeiting, as he was recognized better than the generic designs on the [[renminbi]] notes.
  
 
In Australia, the original paper decimal currency banknotes introduced in 1966 were eventually replaced with new designs printed on clear polyester film which allowed them to have "see through" sections that are almost impossible to duplicate with a photocopier.
 
In Australia, the original paper decimal currency banknotes introduced in 1966 were eventually replaced with new designs printed on clear polyester film which allowed them to have "see through" sections that are almost impossible to duplicate with a photocopier.
  
 
===Consumer Goods===
 
===Consumer Goods===
There exist many different ways to prevent counterfeiting or piracy of consumer media. Some software companies require a security key to install their products onto a computer. Some music CDs and movie DVDs come with anti-piracy encryption.  
+
There are many different ways to prevent counterfeiting or piracy of consumer media. Some software companies require a security key to install their products onto a computer. Some music CDs and movie DVDs come with anti-piracy encryption.  
  
 
One of the most frequent issues raised at the [[World Trade Organization]] is that of counterfeiting. The United States often complains of Chinese counterfeit goods eating into their profits.<ref>[http://news.bbc.co.uk/2/hi/business/6367419.stm US mulls WTO move on China piracy] BBC. Retrieved March 17, 2007.</ref> Economic sanctions against Chinese business are one possible outcome of such a complaint with the WTO. The issue of counterfeiting will continue to be a thorn in the side of legitimate business so long as there is a profit to be made.
 
One of the most frequent issues raised at the [[World Trade Organization]] is that of counterfeiting. The United States often complains of Chinese counterfeit goods eating into their profits.<ref>[http://news.bbc.co.uk/2/hi/business/6367419.stm US mulls WTO move on China piracy] BBC. Retrieved March 17, 2007.</ref> Economic sanctions against Chinese business are one possible outcome of such a complaint with the WTO. The issue of counterfeiting will continue to be a thorn in the side of legitimate business so long as there is a profit to be made.

Revision as of 15:27, 22 April 2007


A counterfeit is an imitation that is made usually with the intent to deceptively represent its content or origins. The word counterfeit most frequently describes forged currency or documents, but can also describe clothing, software, pharmaceuticals, watches, or any other manufactured item, especially when this results in patent infringement or trademark infringement. The act of creating a counterfeit is counterfeiting.

Definitions

This covers a wide range of consumer items, from outright fakes in the sense that they are non-functional lookalikes (e.g. prescription drugs, computer flash drives), functional but inferior items (Memory Sticks, blank videotapes) to fully functional items illegally manufactured without paying copyright fees (music from CDs, movies on DVDs, or computer softwareon CD or DVD). In the latter case, there is often little or no attempt at disguising its origin as the end user will be aware that the counterfeit product will work at least as well (and sometimes better than) the original. The alternative term bootleg is more often used for this type of counterfeiting, where the user is fully aware of its illegal status.

By contrast, a knockoff item may imitate a well-known one, may be sold for a lower price, and may be of inferior quality, but there is usually no attempt to deceive the buyer or infringe upon brand names, patents, trademarks or copyrights. An example of a knockoff item is Dynacell batteries.

Types of Counterfeiting

Counterfeiting of money

History

Forms to counterfeit coins from the late 2nd and early 3rd century

Counterfeiting money is probably as old as money itself. Before the introduction of paper money, the two main ways of doing it were to mix base metals in what was supposed to be pure gold or silver, or to "shave" the edges of a coin so that it weighed less than it was supposed to. A fourrée is an ancient type of counterfeit coin, in which a base metal core has been plated with a precious metal to look like its solid metal counter part.

Modern counterfeiting begins with Paper money. Nations have used counterfeiting as a means of warfare. The idea is to overflow the enemy's economy with fake bank notes, so that the real value of the money plummets. Great Britain did this during the Revolutionary War to reduce the value of the Continental Dollar. Although this tactic was also employed by the United States during the American Civil War, the fake Confederate currency it produced was of superior quality to the real thing.

This building was used to mint counterfeit American nickels in the late 19th and/or early 20th centuries. The picture was taken in 1911 and featured in a Chicago newspaper.

Another form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. An example of this is the Portuguese Bank Note Crisis of 1925, when the British banknote printers Waterlow and Sons produced Banco de Portugal notes equivalent in value to 0.88% of the Portuguese nominal Gross Domestic Product, with identical serial numbers to existing banknotes, in response to a fraud perpetrated by Alves dos Reis. Similarly, in 1929 the issue of postage stamps celebrating the Millennium of Iceland's parliament, the Althing, was compromised by the insertion of "1" on the print order, before the authorised value of stamps to be produced (see Postage stamps and postal history of Iceland.)

In 1926 a high-profile counterfeit scandal came to light in Hungary, when several people were arrested in the Netherlands while attempting to procure 10 million francs worth of fake French 1000-franc bills which had been produced in Hungary; after 3 years, the state-sponsored industrial scale counterfeit operation had finally collapsed. The League of Nations' investigation found Hungary's motives were to avenge its post-WWI territorial losses (blamed on Georges Clemenceau) and to use profits from the counterfeiting business to boost a militarist, border-revisionist ideology. Germany and Austria had an active role in the conspiracy, which required special machinery. The quality of fake bills was still substandard however, due to France's use of exotic raw paper material imported from its colonies.

During World War II, the Nazis attempted to do a similar thing to the Allies with Operation Bernhard. The Nazis took Jewish artists in the Sachsenhausen concentration camp and forced them to forge British pounds and American dollars. The quality of the counterfeiting was very good, and it was almost impossible to distinguish between the real and fake bills. The Germans could not put their plan into action, and were forced to dump the counterfeit bills into a lake, which were not recovered until the 1950s.

Today the finest counterfeit banknotes are claimed to be U.S. dollar bills produced in North Korea, which are used to finance the North Korean government, among other uses. The fake North Korean copies are called Superdollars because of their high quality. Bulgaria and Colombia are also significant sources of counterfeit currency.

There has been a rapid growth in the counterfeiting of Euro banknotes and coins since the launch of the currency in 2002. In 2003, 551,287 fake euro notes and 26,191 bogus euro coins were removed from EU circulation. In 2004, French police seized fake 10 euro and 20 euro notes worth a total of around €1.8 million from two laboratories and estimated that 145,000 notes had already entered circulation.

The spread of counterfeit goods has become global in recent years. It is currently estimated that Counterfeit Goods consists of 5 to 7% of World Trade, ranging in losses between 500 Billion and 600 Billion U.S. Dollars. In the early years of the 21st century, the United States Secret Service has noted a substantial reduction in the quantity of forged U.S. currency, as counterfeiters turn their attention towards the Euro.

In 2006, a Pakistani government printing press in the city of Quetta was accused of churning out large quantities of counterfeit Indian currency, The Times of India reported based on Central Bureau of Intelligence investigation. The rupee notes are then smuggled into India as 'part of Pakistan's agenda of destabilizing (the) Indian economy through fake currency,' the daily said. The notes are 'supplied by the Pakistan government press (at Quetta) free of cost to Dubai-based counterfeiters who, in turn, smuggle it into India using various means,' the report said.[1][2] This money is allegedly used to fund terrorist activities inside India. It has been alleged that terrorist bombings of trains in Mumbai were funded by money counterfeited in Pakistan.[3]

Money art

File:Counterfeiter - Punch cartoon - Project Gutenberg eText 16727.png
"Look 'ere—this arf-crown won't do. It ain't got no milling on its hedge." "Blimy! Nor it 'as! I knew I'd forgotten somefink."
----------
Cartoon in Punch magazine 25 August 1920. A half crown was a coin worth one-eighth of a British pound.

A subject related to that of counterfeiting is that of money art, which is art that incorporates currency designs or themes. Some of these works of art are similar enough to actual bills that their legality is in question. While a counterfeit is made with deceptive intent, money art is not - however, the law may or may not differentiate between the two. See JSG Boggs, the American artist best known for his hand-drawn, one-sided copies of US banknotes which he spends for the face value of the note.

Counterfeiting of documents

Forgery is the process of making or adapting documents with the intention to deceive. It is a form of fraud, and is often a key technique in the execution of identity theft. Uttering and publishing is a term in United States law for the forgery of non-official documents, such as a trucking company's time and weight logs.

Questioned document examination is a scientific process for investigating many aspects of various documents, and is often used to examine the provenance and verity of a suspected forgery. Security printing is a printing industry specialty, focused on creating documents which are difficult or impossible to forge.

Counterfeiting of consumer goods

In the United States, the FBI estimates that American companies lose up to $250 billion annually due to counterfeit goods. According to the Organisation for Economic Co-operation and Development as well as the European Commission, counterfeit goods are responsible for the loss of 100,000 jobs in Europe each year.[4]

Certain consumer goods, especially very expensive or desirable brands, or those which are easy to reproduce cheaply, have become popular among counterfeiters, who attempt to deceive the consumer into thinking they are purchasing a legitimate item, or convince the consumer that they could deceive others with the imitation. An item which doesn't attempt to deceive, such as copy of movie with missing or different cover art, is often called a "bootleg" or a "pirated copy" instead.

Apparel, accessories, watches, and other goods

Counterfeit clothes, shoes and handbags from designer brands such as Chanel and Gucci are made in varying quality; sometimes the intent is only to fool the gullible who only look at the label and don't know what the real thing looks like, while others put some serious effort into mimicking fashion details. The popularity of designer jeans, starting with Jordache in 1978, also spurred a flood of knockoffs. Factories that manufacture counterfeit designer brand garments and watches usually originate from developing countries such as China. Many international tourists visiting Beijing will find a wide selection of counterfeit designer brand garments at the infamous Silk Street. Expensive watches such as Rolex are also subject to counterfeiting; it is a common cliché that any visitor to New York City will be approached on a street corner by a vendor with a dozen such fancy watches inside his coat, offered at amazing bargain prices.

Media products

Music, movies, software and other media are easily copied depending on the medium in which they are published. Compact Discs, videotapes and DVDs, computer software and other media which are easily copied "pirated", and sold through vendors at street markets, night markets, mail order, and numerous Internet sources, including open auction sites like eBay, making counterfeit content easy to distribute.

Music enthusiasts may use the term "bootleg recording" to differentiate otherwise unavailable recordings from pirated copies of commercially released material.

Drugs

A counterfeit drug or medicine is one which is produced and sold with the intent to deceptively represent its origin, authenticity or effectiveness. It may be one which does not contain active ingredients, contains an insufficient quantity of active ingredients, or contains entirely incorrect active ingredients (which may or may not be harmful), and which is typically sold with inaccurate, incorrect, or fake packaging.

Illegal street drugs may also be counterfeited, either for profit or for the deception of rival drug distributors or narcotics officers.

A counterfeit drug or a counterfeit medicine is a medication which is produced and sold with the intent to deceptively represent its origin, authenticity or effectiveness. The common street term for counterfeit drug is "beat bag." A counterfeit drug may be one which does not contain active ingredients, contains an insufficient quantity of active ingredients, or contains entirely incorrect active ingredients (which may or may not be harmful), and which is typically sold with inaccurate, incorrect, or fake packaging. Fake medicines and generic drugs which are deliberately mislabeled in order to deceive consumers are therefore counterfeit, while a drug which has not received regulatory approval is not necessarily so.

Counterfeit drugs can generally be classified by the following characteristics:

  • re-labeled drugs that were previously expired, defective or otherwise deemed unfit for use;
  • re-labeled drugs wherein the active ingredient is fraudulently diluted;
  • re-labeled drugs wherein the active ingredient is adulterated;
  • re-labeled drugs wherein the active ingredient is substituted;
  • falsely-labeled substances of any composition wherein the active ingredient is completely misrepresented; and
  • falsely-labeled substances whose combined active ingredients meet one or more of the preceding criteria.[5]

An individual who applies a counterfeit medication may experience a number of dangerous consequence to their health, such as unexpected side effects, allergic reactions, or a worsening of their medical condition. A number of counterfeits do not contain any active ingredients, and instead contain inert substances, which do not provide the patient any treatment benefits. Counterfeit medications may also contain incorrect ingredients, improper dosages of the correct ingredients, or they may contain hazardous ingredients.

The extent of the problem of counterfeit drugs is unknown. Counterfeiting is difficult to detect, investigate, and quantify. So, it is hard to know or even estimate the true extent of the problem. What is known is that they occur worldwide and are more prevalent in developing countries. It is estimated that upwards of 10% of drugs worldwide are counterfeit, and in some countries more than 50% of the drug supply is made up of counterfeit drugs. Furthermore, the World Health Organization estimates that the annual earnings of counterfeit drugs are over 32 Billion U.S. Dollars.

There are several technologies that may prove helpful in combating this problem, such as radio frequency identification which uses electronic devices to track and identify items, such as pharmaceutical products, by assigning individual serial numbers to the containers holding each product. The FDA is working towards an Electronic pedigree (ePedigree) system to track drugs from factory to pharmacy. This technology may prevent the diversion or counterfeiting of drugs by allowing wholesalers and pharmacists to determine the identity and dosage of individual products. More recent innovative technology includes the use of mobile phone cameras to verify the source and authenticity of drugs within a world wide market through use of unique identifying unbreakable codes.[6]

A new technique, Raman spectroscopy can be used to discover counterfeit drugs while still inside their packaging.[7]

On May 6, 2005, the Chinese press agency Xinhua reported that the World Health Organization had established Rapid Alert System (RAS), the world's first web-based system for tracking the activities of drug cheats, in light of the increasing severity of the problem of counterfeit drugs.

Fake antibiotics with a low concentration of the active ingredients can do damage world wide. Courses of antibiotics that are not seen through to completion allow bacteria to regroup and develop resistance.

Anti-Counterfeiting Measures

Money

There are a number of ways to fight counterfeiting. The two main ways are making products difficult to counter and to punish counterfeiters harshly.

Kings often dealt very harshly with the perpetrators of such deeds. In 1162, Emperor Gaozong of the Chinese Song dynasty decreed counterfeiters of the Huizi (currency) to be punished by death and to reward the informant. The English couple Thomas Rogers and Anne Rogers were convicted on October 15, 1690 for "Clipping 40 pieces of Silver" (in other words, clipping the edges off silver coins). Thomas Rogers was hanged, drawn and quartered and Anne Rogers was burnt alive. The gruesome forms of punishment were due to the two's acts being construed as "treason", rather than simple crime.

File:Forged Pound Coins.jpg
Two forged UK pound coins. The left coin shows poor surface clarity, irregular reeding and no side lettering. The right coin demonstrates poor metal quality.

Traditionally, anti-counterfeiting measures involved including fine detail with raised intaglio printing on bills which would allow non-experts to easily spot forgeries. On coins, milled or reeded (marked with parallel grooves) edges are used to show that none of the valuable metal has been scraped off. This detects the shaving or clipping (paring off) of the rim of the coin. However, it does not detect sweating, or shaking coins in a bag and collecting the resulting dust. Since this technique removes a smaller amount, it is primarily used on the most valuable coins, such as gold.

In the late twentieth century advances in computer and photocopy technology made it possible for people without sophisticated training to easily copy currency. In response, national engraving bureaus began to include new more sophisticated anti-counterfeiting systems such as holograms, multi-colored bills, embedded devices such as strips, microprinting and inks whose colors changed depending on the angle of the light, and the use of design features such as the "EURion constellation" which disables modern photocopiers. Software programs such as Adobe Photoshop have been modified by their manufacturers to obstruct manipulation of scanned images of banknotes. There also exist patches to counteract these measures.

In the 1980s counterfeiting in the Republic of Ireland twice resulted in sudden changes in official documents: in November 1984 the £1 postage stamp, also used on savings cards for paying television licenses and telephone bills, was invalidated and replaced by another design at a few days' notice, because of widespread counterfeiting. Later, the £20 Central Bank of Ireland Series B banknote was rapidly replaced because of what the Finance Minister described as "the involuntary privatization of banknote printing".

In the 1990s, the portrait of Chairman Mao Zedong was placed on the banknotes of the People's Republic of China to combat counterfeiting, as he was recognized better than the generic designs on the renminbi notes.

In Australia, the original paper decimal currency banknotes introduced in 1966 were eventually replaced with new designs printed on clear polyester film which allowed them to have "see through" sections that are almost impossible to duplicate with a photocopier.

Consumer Goods

There are many different ways to prevent counterfeiting or piracy of consumer media. Some software companies require a security key to install their products onto a computer. Some music CDs and movie DVDs come with anti-piracy encryption.

One of the most frequent issues raised at the World Trade Organization is that of counterfeiting. The United States often complains of Chinese counterfeit goods eating into their profits.[8] Economic sanctions against Chinese business are one possible outcome of such a complaint with the WTO. The issue of counterfeiting will continue to be a thorn in the side of legitimate business so long as there is a profit to be made.

Some companies make distinctive labels or insignias to distinguish between their products and knockoffs.

New technology has also made it easier to create more secure physical documents. This technology takes the form of watermarks and scannable barcodes. These have been implemented in such identification cards as drivers' licenses.

Notes

  1. Pakistan printing fake Indian currency - Times of India at Forbes
  2. Most fake rupee notes are coming from Quetta Times of India. Retrieved March 17, 2007.
  3. http://india-alert.blogspot.com/2007/02/mk-narayanans-speech-at-43rd-munich.html MK Narayanan's speech at the 43rd Munich Conference on Security Policy] India Alert. Retrieved March 17, 2007.
  4. First Global Congress on Combating Counterfeiting The Third Global Congress on Combating Counterfeiting and Piracy. Retrieved March 17, 2007.
  5. BBC Two "Bad Medicine" broadcast on Tuesday 2005 July 12.
  6. video clip of mobile phone verification of authenticity of drugs Yottamark. Retrieved March 17, 2007.
  7. Fake drugs caught inside the pack BBC. Retrieved March 17, 2007.
  8. US mulls WTO move on China piracy BBC. Retrieved March 17, 2007.

References
ISBN links support NWE through referral fees

  • Burke, Bryan O. 1988. Nazi Counterfeiting of British Currency During World War II: Operation Andrew and Bernhard. Book Shop. ISBN 0961827408 ISBN 978-0961827403
  • Hopkins, David M., Lewis T. Kontnik, and Mark T. Turnage. 2003. Counterfeiting Exposed: How to Protect Your Brand and Market Share. New York, NY: Wiley. ISBN 0471269905 ISBN 978-0471269908
  • Johnson, David R. 1995. Illegal Tender - Counterfeiting And The Secret Service In Nineteenth-century America. Smithsonian Institution. ISBN 0788198041 ISBN 978-0788198045

External links

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