Difference between revisions of "Counterfeiting" - New World Encyclopedia

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[[Category:Politics and social sciences]]
 
[[Category:Politics and social sciences]]
 
[[Category:Law]]
 
[[Category:Law]]
  
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 [[document]]s, but can also describe [[clothing]], [[software]], [[pharmaceutical]]s, [[watch]]es, or any other manufactured item, especially when this results in [[patent infringement]] or [[trademark infringement]]. The act of creating a counterfeit is '''counterfeiting.'''
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A '''counterfeit''' is an imitation that is made usually with the intent to deceptively represent its content or origins. The act of creating a counterfeit is called '''counterfeiting.''' The word "counterfeit" most frequently describes [[forgery|forged]] [[currency]] or [[document]]s, but can also describe [[clothing]], [[software]], [[pharmaceutical]]s, [[watch]]es, or any other manufactured item, especially when this results in [[patent]] or [[trademark]] infringement. Counterfeiting has also been used as a weapon of [[war]] between countries, in an attempt to undermine the value of an enemy's currency. [[Law]]s against counterfeiting exist throughout the world, both for counterfeiting their own and other currencies, and international [[police]] track counterfeiters and their products. Most countries have developed protection against counterfeit currency, but as [[technology|technologies]] advance counterfeiting methods become more advanced.
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This is especially true of digital recordings of [[music]] and [[movies]], which can easily be copied without loss of quality and thus, provide a great temptation to those who see this as an opportunity to make a quick [[profit]]. As with all [[crime]], the elimination of this activity will not be accomplished by stricter laws, better law enforcement, or harsher penalties, but rather by a change in the hearts and minds of people so as to live for the sake of others rather than exploiting them for selfish gain.
  
 
==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 ([[Compact Disc|CDs]], [[DVD]]s, [[computer software]]). 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.
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'''Counterfeiting''' covers a wide range of consumer items, from outright fakes in the sense that they are non-functional lookalikes (such as [[pharmaceutical|prescription drug]]s), functional but inferior items (such as blank [[videotape]]s), to fully functional items illegally manufactured without paying [[copyright]] fees ([[music]] from [[Compact Disc|CDs]] or movies on [[DVD]]s). 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 as 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.
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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, [[patent]]s, [[trademark]]s, or [[copyright]]s.
  
==Types of Counterfeiting==
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==Types of counterfeiting==
 
===Counterfeiting of money===
 
===Counterfeiting of money===
==== History ====
 
[[Image:Forms for fake coins.JPG|thumb|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.
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[[Image:Forms for fake coins.JPG|thumb|left|250 px|Forms to counterfeit coins from the late second and early third century]]
  
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 [[American Revolutionary War|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 States of America|Confederate]] currency it produced was of superior quality to the real thing.
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Counterfeiting [[money]] is probably as old as money itself. Before the introduction of paper money, the two main methods were to mix base [[metal]]s 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 was plated with a precious metal to look like its solid metal counter part.
  
[[Image:counterfeit_nickel_plant.jpg|thumb|This building was used to mint counterfeit American [[United States five cent coin|nickels]] in the late [[19th century|19th]] and/or early [[20th century|20th centuries]]. The picture was taken in 1911 and featured in a [[Chicago]] newspaper.]]
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Nations have used counterfeiting as a means of [[war]]fare, the idea being 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 [[American Revolutionary War|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 States of America|Confederate]] [[currency]] it produced was of superior quality to the real thing.
  
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]].)
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[[Image:counterfeit_nickel_plant.jpg|thumb|This building was used to mint counterfeit American nickels in the late nineteenth and/or early twentieth centuries. The picture was taken in 1911 and featured in a [[Chicago]] newspaper.]]
  
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.
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Another form of counterfeiting is the production of documents by legitimate printers in response to [[fraud]]ulent instructions. In the [[Portuguese Bank Note Crisis]] of 1925, the British banknote printers [[Waterlow and Sons]] produced [[Banco de Portugal]] notes equivalent in value to 0.88 percent 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 stamp]]s celebrating the Millennium of [[Iceland]]'s parliament, the [[Althing]], was compromised by the insertion of "1" on the print order before the authorized value of stamps to be produced.
  
During [[World War II]], the [[Nazis]] attempted to do a similar thing to the [[Allies]] with [[Operation Bernhard]]. The Nazis took [[Jew]]ish 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.  
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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 [[France|French]] 1000-franc bills which had been produced in Hungary; after three years, the state-sponsored industrial scale counterfeit operation finally collapsed. The [[League of Nations]]' investigation found Hungary's motives were to avenge its post-[[World War I]] territorial losses (blamed on [[Georges Clemenceau]]) and to use profits from the counterfeiting business to boost a militarist, border-revisionist ideology. [[Germany]] and [[Austria]] both 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.
  
Today the finest counterfeit banknotes are claimed to be [[United States dollar|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 ''[[Superdollar]]s'' because of their high quality. [[Bulgaria]] and [[Colombia]] are also significant sources of counterfeit currency.  
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During [[World War II]], the [[Nazism|Nazis]] attempted to do a similar thing to the [[Allies]] with [[Operation Bernhard]]. The Nazis took [[Jew]]ish 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. However, the Germans could not put their plan into action, and were forced to dump the counterfeit bills into a lake from which they not recovered until the 1950s.  
  
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.
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Today, the finest counterfeit banknotes are claimed to be [[United States dollar|U.S. dollar]] bills produced in [[North Korea]], which are used to finance the North Korean government, among other things. The fake North Korean copies are called ''Superdollars'' because of their high quality. [[Bulgaria]] and [[Colombia]] are also significant sources of counterfeit currency.  
  
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]].
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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 [[European Union]] 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.
  
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>
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The spread of counterfeit goods has become global in recent years. It is currently estimated that counterfeit goods comprise five to seven percent of world trade, ranging in losses between 500 billion and 600 billion U.S. Dollars. In the early years of the twenty-first century, the [[United States Secret Service]] noted a substantial reduction in the quantity of forged U.S. currency, as counterfeiters turned their attention towards the Euro.
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In 2006, a [[Pakistan]]i government printing press in the city of Quetta was accused of producing large quantities of counterfeit [[India]]n currency. The ''Times of India'' reported, based on Central Bureau of Intelligence investigation, that the rupee notes were then smuggled into India as "part of Pakistan's agenda of destabilizing (the) Indian economy through fake currency." 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>''Forbes Magazine,'' [http://www.forbes.com/business/feeds/afx/2006/09/18/afx3023363.html Pakistan printing fake Indian currency--Times of India.] Retrieved April 25, 2007.</ref> This money is allegedly used to fund [[terrorism|terrorist]] activities inside India. It has been alleged that terrorist bombings of trains in [[Mumbai]] were funded by money counterfeited in Pakistan.<ref>India Alert, [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.] Retrieved March 17, 2007.</ref>
  
 
==== Money art ====
 
==== Money art ====
[[Image:Counterfeiter - Punch cartoon - Project Gutenberg eText 16727.png|thumb|"Look 'ere—this arf-crown won't do. It ain't got no milling on its hedge."
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[[Image:Counterfeiter - Punch cartoon - Project Gutenberg eText 16727.png|thumb|"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."<br/>----------<br/>
"Blimy! Nor it 'as! I knew I'd forgotten somefink."
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<small>Cartoon in [[Punch (magazine)|''Punch'' magazine]] August 25, 1920. A half crown was a coin worth one-eighth of a British pound.</small>]]
  
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.
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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.
  
 
===Counterfeiting of documents===
 
===Counterfeiting of documents===
{{main|Forgery}}
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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.
  
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.
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"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.
 
 
[[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===
 
===Counterfeiting of consumer goods===
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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 Organization 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>The Third Global Congress on Combating Counterfeiting and Piracy, [http://www.ccapcongviress.net/First/fsheet5.doc First Global Congress on Combating Counterfeiting.] Retrieved March 17, 2007.</ref>
  
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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Certain [[consumer good]]s, 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 does not attempt to deceive, such as copy of movie with missing or different cover art, is often called a "[[bootleg]]" or a "pirated copy."
 
 
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.
 
  
 
====Apparel, accessories, watches, and other goods====
 
====Apparel, accessories, watches, and other goods====
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Counterfeit clothes, shoes, and handbags from designer brands are made in varying quality; sometimes the intent is only to fool the gullible, who only look at the label and are ignorant regarding details of the authentic item, while others put some serious effort into mimicking [[fashion]] details. The popularity of designer jeans, starting in the late 1970s, also spurred a flood of knockoffs.
  
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.
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Factories that manufacture counterfeit designer brand garments and [[watch]]es usually originate from developing countries such as [[China]]. Many international tourists visiting [[Beijing]] find a wide selection of counterfeit designer brand garments at the infamous [[Silk Street]]. Expensive watches 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====
 
====Media products====
[[Compact Disc]]s, [[videotape]]s and [[DVD]]s, [[computer software]] and other media which are easily copied can be counterfeited or "pirated", and sold through vendors at [[street market]]s, [[night market]]s, [[mail order]], and numerous [[Internet]] sources, including open auction sites like [[eBay]].
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[[Music]], [[movie]]s, and [[computer]] software may be easily copied. [[Compact Disc]]s, [[videotape]]s, and [[DVD]]s, [[computer software]], and other media which are easily copied or "pirated" are often sold through vendors at [[street market]]s, [[mail order]], and numerous [[Internet]] sources, including open [[auction]] sites like [http://www.ebay.com 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.
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Music enthusiasts may use the term "[[bootleg]]" recording to differentiate otherwise unavailable recordings from pirated copies of commercially released material.
  
 
==== Drugs ====
 
==== Drugs ====
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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. It may not contain active ingredients, contain an insufficient quantity of active ingredients, or contain entirely incorrect active ingredients (which may or may not be harmful), and is typically sold with inaccurate, incorrect, or fake packaging.<ref>BBC Two, "Bad Medicine" broadcast on Tuesday July 12, 2005.</ref> An individual who applies a counterfeit medication may experience a number of dangerous consequence to their [[health]], such as unexpected side effects, [[allergy|allergic reactions]], or a worsening of their medical condition.
  
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 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.
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Illegal street drugs may also be counterfeited, either for profit or for the deception of rival drug distributors or [[narcotic]]s 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.
 
 
 
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.<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.
 
 
 
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>
 
  
A new technique, [[Raman spectroscopy]] can be used to discover counterfeit drugs while still ''inside'' their packaging.<ref>[http://news.bbc.co.uk/2/hi/health/6314287.stm Fake drugs caught inside the pack] BBC. Retrieved March 17, 2007.</ref>
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The extent of the problem of counterfeit drugs is unknown since counterfeiting is difficult to detect, investigate, and quantify. However, it is known that they occur worldwide and are more prevalent in developing countries. It is estimated that upwards of 10 percent of drugs worldwide are counterfeit, and in some countries, more than 50 percent 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.  
  
On May 6, 2005, the [[People's Republic of China|Chinese]] press agency [[Xinhua News Agency|Xinhua]] reported that the [[World Health Organization]] had established [[Rapid Alert System]] (RAS), the world's first [[World Wide Web|web]]-based system for tracking the activities of drug cheats, in light of the increasing severity of the problem of counterfeit drugs.
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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 pharmaceutical products by assigning individual serial numbers to the containers holding each product. For example, the [[FDA]] has been working towards an "Electronic pedigree" (ePedigree) system to track drugs from factory to pharmacy. 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>Yottamark, [http://www.yottamark.com/solution/cameraphone.wmv Video clip of mobile phone verification of authenticity of drugs.] Retrieved March 17, 2007.</ref> Raman spectroscopy can be used to discover counterfeit drugs while still inside their packaging.<ref>BBC, [http://news.bbc.co.uk/2/hi/health/6314287.stm Fake drugs caught inside the pack.] Retrieved March 17, 2007.</ref>
  
Fake [[antibiotic]]s 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 [[Antibiotic resistance|resistance]].
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On May 6, 2005, the [[People's Republic of China|Chinese]] press agency, ''Xinhua,'' reported that the [[World Health Organization]] had established Rapid Alert System (RAS), the world's first [[World Wide Web|web]]-based system for tracking the activities of drug cheats, in light of the increasing severity of the problem of counterfeit drugs.
  
==Anti-Counterfeiting Measures==
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==Anti-counterfeiting measures==
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===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.  
 
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 Song]] 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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Historically, the perpetrators of such deeds were often dealt with very harshly. In 1162, Emperor Gaozong of the [[China|Chinese]] Song dynasty decreed counterfeiters of the ''Huizi'' currency to be punished by death and to reward informants. 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 [[drawing and quartering|hanged, drawn, and quartered]] and Anne Rogers was burnt alive. These gruesome forms of [[punishment]] were due to the acts being construed as [[treason]], rather than a simple [[crime]].
  
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A 1929 convention in [[Geneva]] produced widely agreed upon laws regarding counterfeiting, including punishments for counterfeiting both one's own and other countries' currencies, and [[extradition]] agreements for offenders.
 
[[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.]]
Traditionally, anti-counterfeiting measures involved including fine detail with raised [[intaglio (printmaking)|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 ''[[Coin clipping|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 [[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.
+
Traditionally, anti-counterfeiting measures involved the inclusion of fine detail with raised [[intaglio (printmaking)|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.
 +
 
 +
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 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 have been modified by their manufacturers to obstruct manipulation of scanned images of banknotes.  
  
For [[United States dollar|U.S. currency]], anti-counterfeiting milestones are as follows:
+
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."
  
*1996 [[American hundred dollar bill|$100 bill]] gets a new design with a larger portrait
+
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.
*1997 [[American fifty dollar bill|$50 bill]] copies the design used above
 
*1998 [[American twenty dollar bill|$20 bill]] copies the design used above
 
*2000 [[American ten dollar bill|$10 bill]] and [[American five dollar bill|$5 bill]] copies the design used above
 
*2003 [[American twenty dollar bill|$20 bill]] gets a new design with no oval around [[Andrew Jackson|Andrew Jackson's]] portrait and more colors
 
*2004 [[American fifty dollar bill|$50 bill]] copies the design used above
 
*2006 [[American ten dollar bill|$10 bill]] copies the design used above
 
  
The Treasury had made no plans to redesign the [[American five dollar bill|$5 bill]] using  colors, but recently reversed its decision, after learning some counterfeiters were bleaching the ink off the bills and printing them as $100 bills. It is not known when the [[American hundred dollar bill|$100 bill]] will be redesigned in this format, but the new [[American ten dollar bill|$10 bill]] (the design of which was revealed in late 2005) entered circulation on March 2, 2006. The [[Federal Reserve note|$1 bill]] and [[United States Two dollar bill|$2 bill]] are seen by most counterfeiters as having too low of a value to counterfeit, and so they have not been redesigned as frequently as higher denominations.
+
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 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".
+
===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 [[CD]]s and movie [[DVD]]s come with anti-piracy encryption.  
  
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.
+
New technology, such as watermarks and scanable [[barcode]]s, has also made it easier to create more secure physical documents. This technology takes the form of . These have been implemented in such identification cards as drivers' licenses.
  
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.
+
One of the most frequent issues raised at the [[World Trade Organization]] is that of counterfeiting. The [[United States]] has often complained of [[China|Chinese]] counterfeit goods eating into their profits.<ref>BBC, [http://news.bbc.co.uk/2/hi/business/6367419.stm US mulls WTO move on China piracy.] Retrieved March 17, 2007.</ref> Economic sanctions against Chinese business are one possible outcome of such a complaint with the WTO.  
  
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> 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.
+
The issue of counterfeiting will continue to be a thorn in the side of legitimate [[business]] so long as there are people who believe that there is a [[profit]] to be made.
  
 
==Notes==
 
==Notes==
<References/>
+
<references/>
 +
 
 +
==References==
 +
*Burke, Bryan O. 1988. ''Nazi Counterfeiting of British Currency During World War II: Operation Andrew and Bernhard''. Book Shop. ISBN 0961827408
 +
*Hopkins, David M., Lewis T. Kontnik, and Mark T. Turnage. 2003. ''Counterfeiting Exposed: How to Protect Your Brand and Market Share''. New York: Wiley. ISBN 0471269905
 +
*Johnson, David R. 1995. ''Illegal Tender—Counterfeiting And The Secret Service In Nineteenth-century America''. Smithsonian Institution. ISBN 0788198041
  
 
== External links ==
 
== External links ==
* [http://msnbc.msn.com/id/13099555/ ''MSNBC Dateline'' feature, June 2006]
+
All links retrieved June 26, 2013.
* [http://www.fda.gov/oc/initiatives/counterfeit/qa.html Counterfeit Drugs - Questions and Answers] - by FDA
+
*[http://www.fda.gov/oc/initiatives/counterfeit/qa.html Counterfeit Drugs--Questions and Answers]--by FDA.  
* [http://mednet3.who.int/prequal/documents/GMPWorkshop/1 Drug Regulation: Counterfeits Experience of Countries]
+
*[http://www.who.int/mediacentre/factsheets/2003/fs275/en/ World Health Organization Fact Sheet on Substandard and counterfeit medicines].  
* [http://news.xinhuanet.com/english/2005-05/06/content_2922995.htm ''Xinhua'' article]
+
 
* [http://news.independent.co.uk/world/africa/article331948.ece Article on Dr. Dora's crackdown on counterfeit drugs] - by Independent Online Edition
 
* [http://www.turkewitzlaw.com/counterfeit-drugs.htm Counterfeit Drug Resource Page] from the Turkewitz Law Firm
 
* [http://www.who.int/mediacentre/factsheets/2003/fs275/en/ World Health Organization Fact Sheet on Counterfeit Drugs]
 
* [http://www.documentary-film.net/search/video-listings.php?e=9 Excellent Documentary Online "Fake Drugs"] (pay)
 
* [http://www.drugid.com Anti-Counterfeiting technology for drugs DrugId.com]
 
* [http://www.newscientist.com/search.ns?doSearch=true&query=fake+drugs New Scientist]
 
* [http://www.meds.com/onlinemeds.html Guide to Buying Prescription Medicines (Meds) Online]
 
* [http://www.iccwbo.org/bascap/ Business Action to Stop Counterfeiting and Piracy (BASCAP)]
 
* [http://www.fhs.ch/en/faq.php/ Federation of the Swiss Watch Industry FH : "The watch industry against the counterfeit scourge"]
 
* [http://www.ustreas.gov/usss/money_detect.shtml U.S. Secret Service article about how to detect counterfeit money]
 
* [http://rg.ancients.info/bogos/ Bogos: The Dangerous, Controversial, and Fascinating World of Counterfeit Coins]
 
* [http://www.coinauthentication.co.uk/ Coinauthentication.co.uk], home of the ''Counterfeit Coin Newsletter''.
 
* [http://www.cycleback.com/baseballcards/ Guide to Counterfeit Detection of Baseball Cards] by David Rudd Cycleback
 
* [http://www.replicawatchreport.com/ The Replica Watch Report - Guide to Detecting Counterfeit and Replica Watches]
 
* [http://www.havocscope.com/Counterfeit/counterfeit.htm Counterfeit Goods and Piracy Information]
 
* [http://www.yottamark.com Recent Anti-Counterfeiting technology inventions for consumer goods YottaMark.com]
 
* [http://www.silver-coins.org Counterfeit silver coins and how to detect them].
 
  
 
{{Credit2|Counterfeit|113143416|Counterfeit_drug|113235750}}
 
{{Credit2|Counterfeit|113143416|Counterfeit_drug|113235750}}

Revision as of 18:31, 26 June 2013


A counterfeit is an imitation that is made usually with the intent to deceptively represent its content or origins. The act of creating a counterfeit is called counterfeiting. 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 or trademark infringement. Counterfeiting has also been used as a weapon of war between countries, in an attempt to undermine the value of an enemy's currency. Laws against counterfeiting exist throughout the world, both for counterfeiting their own and other currencies, and international police track counterfeiters and their products. Most countries have developed protection against counterfeit currency, but as technologies advance counterfeiting methods become more advanced.

This is especially true of digital recordings of music and movies, which can easily be copied without loss of quality and thus, provide a great temptation to those who see this as an opportunity to make a quick profit. As with all crime, the elimination of this activity will not be accomplished by stricter laws, better law enforcement, or harsher penalties, but rather by a change in the hearts and minds of people so as to live for the sake of others rather than exploiting them for selfish gain.

Definitions

Counterfeiting covers a wide range of consumer items, from outright fakes in the sense that they are non-functional lookalikes (such as prescription drugs), functional but inferior items (such as blank videotapes), to fully functional items illegally manufactured without paying copyright fees (music from CDs or movies on DVDs). 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 as 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.

Types of counterfeiting

Counterfeiting of money

Forms to counterfeit coins from the late second and early third century

Counterfeiting money is probably as old as money itself. Before the introduction of paper money, the two main methods 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 was plated with a precious metal to look like its solid metal counter part.

Nations have used counterfeiting as a means of warfare, the idea being 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 nineteenth and/or early twentieth 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. In the Portuguese Bank Note Crisis of 1925, the British banknote printers Waterlow and Sons produced Banco de Portugal notes equivalent in value to 0.88 percent 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 authorized value of stamps to be produced.

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 three years, the state-sponsored industrial scale counterfeit operation finally collapsed. The League of Nations' investigation found Hungary's motives were to avenge its post-World War I territorial losses (blamed on Georges Clemenceau) and to use profits from the counterfeiting business to boost a militarist, border-revisionist ideology. Germany and Austria both 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. However, the Germans could not put their plan into action, and were forced to dump the counterfeit bills into a lake from which they 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 things. 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 European Union 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 comprise five to seven percent of world trade, ranging in losses between 500 billion and 600 billion U.S. Dollars. In the early years of the twenty-first century, the United States Secret Service noted a substantial reduction in the quantity of forged U.S. currency, as counterfeiters turned their attention towards the Euro.

In 2006, a Pakistani government printing press in the city of Quetta was accused of producing large quantities of counterfeit Indian currency. The Times of India reported, based on Central Bureau of Intelligence investigation, that the rupee notes were then smuggled into India as "part of Pakistan's agenda of destabilizing (the) Indian economy through fake currency." 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] 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.[2]

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 August 25, 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.

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 Organization 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.[3]

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 does not attempt to deceive, such as copy of movie with missing or different cover art, is often called a "bootleg" or a "pirated copy."

Apparel, accessories, watches, and other goods

Counterfeit clothes, shoes, and handbags from designer brands are made in varying quality; sometimes the intent is only to fool the gullible, who only look at the label and are ignorant regarding details of the authentic item, while others put some serious effort into mimicking fashion details. The popularity of designer jeans, starting in the late 1970s, 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 find a wide selection of counterfeit designer brand garments at the infamous Silk Street. Expensive watches 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, and computer software may be easily copied. Compact Discs, videotapes, and DVDs, computer software, and other media which are easily copied or "pirated" are often sold through vendors at street 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 a counterfeit medicine is a medication which is produced and sold with the intent to deceptively represent its origin, authenticity, or effectiveness. It may not contain active ingredients, contain an insufficient quantity of active ingredients, or contain entirely incorrect active ingredients (which may or may not be harmful), and is typically sold with inaccurate, incorrect, or fake packaging.[4] 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.

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

The extent of the problem of counterfeit drugs is unknown since counterfeiting is difficult to detect, investigate, and quantify. However, it is known that they occur worldwide and are more prevalent in developing countries. It is estimated that upwards of 10 percent of drugs worldwide are counterfeit, and in some countries, more than 50 percent 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 pharmaceutical products by assigning individual serial numbers to the containers holding each product. For example, the FDA has been working towards an "Electronic pedigree" (ePedigree) system to track drugs from factory to pharmacy. 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.[5] Raman spectroscopy can be used to discover counterfeit drugs while still inside their packaging.[6]

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.

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.

Historically, the perpetrators of such deeds were often dealt with very harshly. In 1162, Emperor Gaozong of the Chinese Song dynasty decreed counterfeiters of the Huizi currency to be punished by death and to reward informants. 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. These gruesome forms of punishment were due to the acts being construed as treason, rather than a simple crime.

A 1929 convention in Geneva produced widely agreed upon laws regarding counterfeiting, including punishments for counterfeiting both one's own and other countries' currencies, and extradition agreements for offenders.

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 the inclusion of 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.

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 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 have been modified by their manufacturers to obstruct manipulation of scanned images of banknotes.

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.

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

One of the most frequent issues raised at the World Trade Organization is that of counterfeiting. The United States has often complained of Chinese counterfeit goods eating into their profits.[7] 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 are people who believe that there is a profit to be made.

Notes

  1. Forbes Magazine, Pakistan printing fake Indian currency—Times of India. Retrieved April 25, 2007.
  2. India Alert, MK Narayanan's speech at the 43rd Munich Conference on Security Policy. Retrieved March 17, 2007.
  3. The Third Global Congress on Combating Counterfeiting and Piracy, First Global Congress on Combating Counterfeiting. Retrieved March 17, 2007.
  4. BBC Two, "Bad Medicine" broadcast on Tuesday July 12, 2005.
  5. Yottamark, Video clip of mobile phone verification of authenticity of drugs. Retrieved March 17, 2007.
  6. BBC, Fake drugs caught inside the pack. Retrieved March 17, 2007.
  7. BBC, US mulls WTO move on China piracy. 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
  • Hopkins, David M., Lewis T. Kontnik, and Mark T. Turnage. 2003. Counterfeiting Exposed: How to Protect Your Brand and Market Share. New York: Wiley. ISBN 0471269905
  • Johnson, David R. 1995. Illegal Tender—Counterfeiting And The Secret Service In Nineteenth-century America. Smithsonian Institution. ISBN 0788198041

External links

All links retrieved June 26, 2013.


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