Illicit Cigarettes – Hong Kong customs intercepts four shipping containers

Photo: Winson Wong

Hong Kong customs has uncovered HK$85 million worth of smuggled cigarettes in the largest seizure of its kind in two decades, after authorities acted on intelligence indicating a syndicate was shipping the haul into the city in four containers.

Some 31 million cigarettes were stashed in the containers from Yokohama in Japan. They were then shipped through different ports in South Korea, Vietnam and mainland China, according to Lee Hoi-man, deputy head of the Revenue and General Investigation Bureau under customs.

He said the circuitous route was used by smugglers to avoid detection.

“The containers were shipped into three to four different ports before they came to Hong Kong,” Lee said adding that the contents listed on import documents were changed to throw off law enforcement in various jurisdictions.

Four men – one mainlander and three Hongkongers – aged between 24 and 41 were arrested in the operation on Monday. They were still being held for questioning on Tuesday evening.

Information on the containers was shared to a global database operated jointly by customs from different countries, under an anti-smuggling campaign code-named “Project Crocodile”.

A law enforcement source said the containers were left idle at another port since December, but were then suddenly moved across different countries before arriving in Hong Kong, one at a time since last Friday.

Lee said: “It is possible smugglers believed our frontline officers were tied up in dealing with the coronavirus outbreak.” He added that some of the contraband items were believed to be destined for countries in eastern Europe as some cigarette brands seized in the operation were popular there.

Hong Kong customs began investigating the syndicate in mid-December before identifying the four containers.

On Monday afternoon, officers from the Revenue and General Investigation Bureau swooped into action and seized 22 million sticks of cigarettes stashed in three containers at yards in Yuen Long, Sheung Shui and Man Kam To, arresting the four men.

At the Sheung Shui site, officers also seized 3,500 bottles of duty-not-paid liquor worth HK$2.5 million.

On Tuesday, the fourth container which had arrived from Shenzhen a day before was selected for inspection. Nine million cigarettes were found in it.

Lee said the combined haul had an estimated street value of HK$85 million, and was the biggest seizure of its kind in two decades in a single operation.

He said his team was working with overseas counterparts to determine the exact origin of the shipment and track down the ring leader and core syndicate members.

In Hong Kong, importing or exporting unmanifested cargo carries a maximum penalty of seven years in jail and a HK$2 million fine.

Source: Article by Clifford Lo, South Morning Post, 18 February 2020

South African Customs – Recent Illicit Goods Busts

Customs teams from Durban, Cape Town, Gauteng and the Free State recently dealt a blow to non-compliant traders by busting drugs, illicit cigarettes and undeclared fuel.

Customs officers at OR Tambo International Airport (ORTIA) were responsible for several major drug busts over the past couple of weeks, including the following:

  • On 8 February, a female passenger arriving from Sao Paulo was stopped and her luggage scanned, which revealed suspicious images. After searching her luggage, officers discovered packages wrapped in black tape and containing a white powdery substance. The powder was tested and confirmed to be cocaine, valued at approximately ZAR54 284 349. Officers also searched a male passenger arriving on the same flight and discovered three body wraps on his torso, containing a white powdery substance. The contents were tested positive for cocaine, valued at about ZAR9 057 566. On the same day, officers intercepted a male passenger about to board a flight for Hong Kong and searched him. They discovered body wraps on his upper torso containing cocaine valued at about ZAR11 700 000.
  • On 2 February, a male passenger arriving from Sao Paulo was stopped by Customs officers and his luggage searched. After a luggage scan revealed irregular images, officers searched his bags and discovered packages wrapped in black tape containing cocaine, valued at about ZAR5 850 000.
  • On 27 January, in a similar incident to the above, a male passenger arriving from Sao Paulo was arrested after Customs officers discovered a false compartment in his luggage, which contained cocaine valued at about ZAR6 750 000.

In all the above incidents, the suspects and goods were handed over to the SAPS for further investigation.

In the Durban incident, officers became suspicious of two containers of goods arriving on a vessel in the Durban harbour from China.

The containers, which were declared to contain glassware and household goods, were placed for examination at a cargo depot in Durban. 

Upon inspection by Customs officers on 5 February 2020, the containers were found to contain various suspected counterfeit goods, and several cartons with tablets packed in plastic packets.

Members of the Customs detector dog unit reacted positively to the cartons, which were tested and found to contain Methaqualone (Mandrax).

There was a total of 15 cartons, each containing 20 000 Mandrax tablets with a street value of about ZAR24 million. The case has been handed over to the SAPS for further investigation.

In Cape Town, officers were responsible for a massive bust of illicit cigarettes, one of SARS’ key focus areas when it comes to illicit trade (particularly in terms of lost revenue due to the fiscus). 

After receiving an alert from the Compliance Risk and Case Selection team about a possible mis-declaration of a container on a ship arriving in South Africa, a detention notice was issued to the shipping liner and the goods were detained in December 2019.

After following the required legal processes, a Customs Branch Physical Inspection team searched the container at the Cape Town harbour on 20 January 2020.

During the inspection, the team discovered 1050 master cases of “LEGATE” cigarettes, each case containing 50 cartons of 10 packets, with an estimated street value of about ZAR3 150 000.

If the consignment of cigarettes was not detected, the potential loss of revenue would have amounted to about ZAR12 208 350 in Customs & Excise duties and VAT. 

The Western Cape Customs Branch Inspection team has handed over the case to Criminal Investigations from further investigation.

In the Free State, Customs officers dealt a blow to another key area of illicit trade, ie. ghost exports or false declarations of fuel. On 31 January 2020, officers stopped a truck coming from Lesotho through the Ficksburg border post. They had become suspicious of this particular trucking company, as they had recently changed their route to using South Africa as a transit route from Mozambique to Lesotho. 

Officers noticed that the same truck had driven through the border into Lesotho the day before, having declared the truck full with fuel they acquired in Mozambique. The following day it re-entered South Africa, with the driver claiming that the truck was empty (which could indicate a possible ghost export in which they were trying to avoid paying taxes and duties/levies).

They then asked the driver to park the truck at the depot for inspection. However, after the truck was taken to the depot, the truck driver disappeared and the truck company’s lawyer was called to attend an inspection. 

Customs officers then discovered the truck contained 26 000 litres of diesel, with the owners having failed to pay duties and taxes totalling ZAR176 000 due to the fiscus. The truck was detained for further investigation.

And in a similar incident, two trucks were stopped at the Maseru Bridge border post on 4 February for falsely declaring fuel coming from Mozambique to Lesotho. The trucks contained 39 388 litres and 39 414 litres of petroleum respectively. Both were detained for further investigation. 

Source: South African Revenue Service [SARS]

USCBP extends secure e-commerce supply chain pilot

Customs and Border Protection (CBP) has expanded its pilot of a new, voluntary scheme to try to improve the security of low-value shipments entering US borders.

The Section 321 Data Pilot is focused in particular on e-commerce, and aims to improve data-sharing between online marketplaces, carriers, technology firms and logistics provider to help protect American consumers from illicit goods arriving by air, ocean, truck, or rail.

That includes, “illicit narcotics, unregulated prescription drugs, brand counterfeits, and unsafe food and beauty products”, according to the CBP, which plans to run the pilot until August 2021.

Nine companies have been selected to participate in the pilot, including e-commerce giants Amazon and eBay, carriers Zulily, FedEx, DHL and UPS, as well as technology firm PreClear and logistics providers XB Fulfillment and BoxC Logistics.

CBP has said that it plans to expand access to all interested and qualified participants “in early 2020.”

The participants will provide cargo origin, content, tracking, recipient and other information to CBP upfront, in addition to the information that is currently legally required for Section 321 shipments – in other words one shipment per day for eligible importers, individuals or companies with a value of $800 or less.

CBP says it wants to see whether having that additional information will enable it to perform “more effective and efficient targeted screening” of these low-value shipments.

Research published in 2018 has suggested that two-thirds of counterfeit goods intercepted by customs around the world are discovered in small parcels sent through postal or courier services.

In part because they are harder for customs officials to track and seize, and also because in many jurisdictions they have not required detailed manifests for their contents. The US stepped up the manifest requirements for Section 321 shipments from January 1, 2019.

CBP broadened the scope of the 321 Data Pilot last month, shortly after the pilot was launched in August, to include ocean shipments and international mail which weren’t included in the original plan.

“Combined with the exponential growth of the online shopping market in the US over the past five years, CBP has seen a significant increase in small, low-value packages,” said the agency in a statement.

“Today, CBP processes more than 600 million express consignment and international mail shipments a year – approximately 1.8m a day. The unprecedented growth in volume of these low-value shipments requires creative solutions to interdict illicit and dangerous products to enter the US.”

Source: article by Phil Taylor, Securityindustry.com, 20 January 2020

WCO – Illicit Trade Report 2018

Download a copy from the WCO website

During December 2019, the World Customs Organization (WCO) issued its 2018 Illicit Trade Report, the annual publication in which the Organization endeavours to quantify and map the situation concerning illicit markets in six key areas of Customs enforcement. 

Every year since 2012, the WCO has published its Illicit Trade Report with the aim of contributing to the study of the illicit trade phenomenon through robust and in-depth data analysis based on voluntary submissions of seizure data and case studies by its Member Customs administrations around the world. 

This year, the analysis provided in this Report is based on data collected from 154 Member administrations, compared to 135 the previous year.  The Report consists of six sections: Cultural Heritage; Drugs; Environment; Intellectual Property Rights, Health and Safety; and Revenue and Security. 

For the third year in a row, the WCO has partnered with the Center for Advanced Defense Studies (C4ADS), a Washington, D.C.-based non-profit organization dedicated to providing data-driven analysis and evidence-based reporting, thereby enriching readers’ experience with advanced data visualization technologies and enhanced data analysis.

“This analysis of 2018 illicit trafficking trends and patterns around the globe is aimed not only at supporting law enforcement planning activities, but also at future-proofing countries’ borders from the multitude of threats faced on a daily basis,” stressed the WCO Secretary General, Kunio Mikuriya. He also expressed his gratitude to the Customs administrations having reported their seizure data to the WCO CEN database.

Source: WCO, 19 December 2019

Spotting a Fake Wine – Scientifically

Researchers in France have shown that genuine Bordeaux wines can be distinguished from fakes by testing the minute quantities of lead in their composition.

Wines and indeed other foods and beverages tend to have low levels of lead, resulting from environmental contamination from natural or man-made sources that is taken up into plants.

Scientists have discovered that the amounts and ratios of elemental lead and lead isotopes can serve as a “fingerprint” that can determine the geographic origin of a wine – and be used to tell a genuine vintage from a knock-off.

Levels of lead in the atmosphere have been falling dramatically in recent decades since the use of lead as an additive in fuel has been banned. It’s been known for many years that lead isotope ratios can be used to identify the origin of wines as well as other foodstuffs such as milk powder.

The latest study puts the technique through its paces for a specific task – distinguishing genuine Bordeaux wines produced by prestigious vineyards over the last 50 years from wines bottled in China between 1998 and 2009.

The researchers took 43 authentic red and white Bordeaux wines from the winemaking estates of Médoc, Graves and Libourne, and ran a comparison with 17 red wines sourced from China, including 14 labeled as ‘Bordeaux’ as well as three genuine Chinese brands. The suspect bottles were selected because they either had spelling mistakes in the names of the known wineries or claimed to be from non-existing producers.

They found that the levels of lead in the genuine French wines reflected the reduction in environmental lead seen since 1969 – the date of the earliest bottle tested – and all fell within recognised safe levels.

The suspect wines had levels that overlapped with those from the French group, but tended to have isotopes suggesting more of the lead came from man-made sources such as leaded gasoline than natural, background sources.

Moreover, a subgroup analysis for four suspicious samples said to be produced in Pauillac in 2004, 2005, 2006 and 2007 were compared directly with genuine wines from that period and found to have different isotopic profiles.

“Despite of limited number of genuine and suspicious samples, this test give a particularly compelling example of [lead] isotopes application to authenticity issues,” write the authors.

There’s an obvious limitation to the approach of course.

“If suspicious wines … would be produced in the same region as authentic, a clear identification by lead isotopes alone may be significantly hampered or even impossible,” they note.

Source: Originally published by Securingindustry.com; Authored by Phil Taylor, 16 September 2019

‘Flying out of Africa’, an essay on China -Africa relations

cina-africa-focac

The following article featured in BusinessLive (eEdition) on 25 July 2019. It is authored by John Grobler. The article was compiled with the financial support of Journalismfund.eu’s Money Trail grant programme. 

Chinese ‘lying money’, or fei qian, is an ancient form of value exchange. But its modern incarnation is blamed for stripping Africa of its resources.

The secret of Chinese commercial success in Africa, as suggested by an 18-month investigation into the drugs-for-abalone and rosewood trade and a major Namibian tax fraud case, is an ancient system that not only allows African countries to be robbed of taxes, but also plays a part in financing the global $270bn-a-year wildlife contraband trade.

Fei qian, or “flying money”, dates back about 1,200 years, to the Tang Dynasty in China. In its simplest modern incarnation, it is a low-cost and trusted method of remitting money, much like the Islamic hawala system. For example, a person who wants to send funds to a recipient in Africa will pay a fei qian broker in China. For a commission, the broker will arrange that a counterpart in Africa pays the recipient, again for a commission. The two fei qian brokers later settle their account through, for example, the transfer of commodities of equivalent value — but also sometimes through less salubrious methods such as transfer mispricing or invoice manipulation.

In practice, the system relies on the systematic underinvoicing of Chinese imports into Africa and a seamless chain of payments system in which accounts are settled through the transfer of high-end — and often illicit — goods such as abalone, rosewood, rhino horn and ivory. In brief: goods are undervalued on their import documentation; they are then sold for cash; and that undeclared cash is subsequently channelled into high-end commodities that are remitted to China to balance the fei qian books.

“The trick behind fei qian is that the money never actually leaves China,” says a former Singaporean finance expert, speaking on condition of anonymity. “It’s just the commodities that get moved around” as part of a longer payment chain among the Chinese diaspora.

Unlike barter trade, fei qian is not a straight swap; it is an exchange in stored value that leaves no paper trail, except in the books of the fei qian operators themselves. What makes the system even more impenetrable, the investigation has found, is that these operators mostly seem to be older, well-established women working in a closed network of mutually trusted contacts.

This nexus, and lack of paper trail, means fei qian is largely invisible. But it occasionally appears as a gaping hole in a country’s balance of payments account with China – as Namibia has discovered in an ongoing import-tax fraud investigation.

Jack Huang, a business associate of President Hage Geingob, and Laurentius Julius, a former Walvis Bay customs official and now a customs clearing agent, are among eight suspects facing 3,215 charges of fraud and money laundering in the Windhoek high court. Continue reading →

Vietnam seizes 125-kilogram haul of trafficked rhino horn encased in plaster

Fifty-five pieces of rhino horn were found hidden inside shipments of plaster at Hanoi International Airport, Vietnam’s state media reported Saturday.

Customs officers broke open plaster molds from 14 shipments to uncover the illegally trafficked horns, which weighed 125 kilograms (275 pounds) in total, according to the Vietnam News Agency.

Vietnam has the world’s largest market for illegal rhino horn, according to the World Wildlife Fund. A single horn can fetch $100,000 in Asian countries such as China and Vietnam, where buyers believe it can cure health problems from hangovers to cancer, and use it as a lifestyle drug. The global market is thought to be worth about $500 million.

The seizure in the Vietnamese capital came after Hanoi police arrested a man accused of running a wildlife trafficking ring on July 23.

That arrest followed the discovery of seven frozen tigers in a car parked in the basement of a Hanoi skyscraper.

Source: CNN, Helen Reagan and Angus Watson, 29 July 2019

USCBP seizes MSC Gayane with 18 tonnes of cocaine aboard

MSC Gayane

US customs officials seized a container ship financed by JPMorgan this week after authorities found nearly 18 tons of cocaine with an estimated street value of $1.3 billion in the vessel.

The drug bust on the Liberian-flagged MSC Gayane is surprising for several reasons. The sheer quantity of cocaine it was carrying, its links to JPMorgan, its presence in the US, and the recent string of West African drug busts are worth noting.

A container ship financed by JPMorgan was seized by US customs officials this week after authorities found nearly 18 tons of cocaine with an estimated street value of $1.3 billion on the vessel. The drug bust on the MSC Gayane is surprising for several reasons, outlined below.

The roughly 39,500 pounds, or 17.9 metric tons, of cocaine – about the same weight as three African bull elephants – found aboard the MSC Gayane outweighed the total amount of cocaine that passed through West Africa in 2013 and all of the cocaine seized across Africa from 2013 to 2016, according to the United Nations Office on Drugs and Crime.

The vast quantity may reflect a supply glut. Global cocaine manufacturing surged by a quarter in 2016 to 1,410 tons, according to the World Drug Report 2018. The production boom is centered in Colombia, where cultivation of the coca plant rose 17% to 171,000 hectares in 2017, according to the UN.

The link between the MSC Gayane and JPMorgan may be the most surprising aspect of the drug bust.

The MSC Gayane is operated by the Switzerland-based Mediterranean Shipping Co., but JPMorgan helped finance MSC’s purchase of the ship. The two reportedly structured the purchase so the ship was owned by client assets in a transportation strategy fund run for JPMorgan’s asset-management arm.

JPMorgan hasn’t yet publicly addressed its association with the vessel, and it has declined to comment to Markets Insider.

The MSC Gayane sailed under the flag of Liberia, a West African country. West Africa is a popular transit route for smugglers between South America and Europe because of its porous borders, weak rule of law, largely unmonitored coastline, and limited infrastructure and resources. The proportion of cocaine seizures in Africa accounted for by West Africa rose to 78% in 2016, “reflecting the rapidly growing importance of West Africa as a transit area,” the UN Office on Drugs and Crime said.

But there appears to be little drug smuggling between West Africa and the US, making the MSC Gayane drug bust highly unusual. Higher street prices and a lower risk of getting caught make Europe a more lucrative and attractive market than the US, the Nigerian drug smuggler Chigbo Umeh told The Guardian in 2015.

While notable, the ship’s flag doesn’t necessarily implicate Liberia.

“A Liberian registered ship is not in itself a link with the West Africa drug economy,” Mark Shaw, the director of the Global Initiative against Transnational Organized Crime, said in an interview with Markets Insider. “Liberia serves as a flag state for much shipping.”

The drug bust on a Liberian-flagged vessel is the latest in a string of major seizures linked to West African countries this year.

In May 2018, Algerian officials seized more than 1,500 pounds of cocaine on a Liberian-registered container ship that was transporting frozen meat from Brazil, according to the BBC. In February of this year, Cape Verde officials found 21,000 pounds of cocaine, with a street value north of $700 million, on a Panamanian-flagged vessel. A month later, authorities in Guinea-Bissau notched their biggest-ever cocaine bust – and the country’s first in a decade – when they discovered more than 1,700 pounds of the drug hidden in a false bottom of a truck loaded with fish.

“There were doubts whether West Africa was still being used as a major transit route, but these seizures seem to suggest that there is a return,” Shaw said in an interview with Bloomberg in March. “It’s a surprise and it’s very significant.”

Source: The article was written by Theron Mohamed, Market Insider, 11 July 2019

Counterfeit 35mm Fujifilm

Fujifilm_counterfeit1

The market for 35mm camera film may be shrinking fast, but it still isn’t safe from counterfeiting, according to Fujifilm.

The Japanese company says it has discovered counterfeit copies of its film products fraudulently bearing its logo that aside from being of suspect quality could damage other customers’ film rolls if developed at the same time in the lab by contaminating the developing chemicals.

The counterfeiters appear to have created counterfeit Fujifilm 250D, 64D, 250T, and 500T Colour Negative Film canisters and filled them with movie film, which cannot be developed using the standard colour negative film process. This sounds more like a case of sabotage.

Ivory – Vietnam remains a threat to Elephants

Exposing the Hydra - IvoryDespite being the focus of numerous investigations and exposés regarding the country’s role in the international illegal wildlife trade, Vietnam continues to be a primary hub for ivory trafficking.

The Environmental Investigation Agency (EIA) has released a report Exposing the Hydra: The growing role of Vietnamese syndicates in ivory trafficking documenting the findings of a two-year undercover investigation. (Download the full report at this hyperlink).

Investigators successfully infiltrated several ivory trafficking syndicates operating in Mozambique, South Africa, Malaysia, Laos, Cambodia and Vietnam, building a detailed picture of how these criminal organizations are structured, how they cooperate with one another and how they also traffic other endangered species such as rhinos and pangolins.

In contrast to China, which closed its domestic legal ivory market in January and stepped up enforcement against ivory trafficking, the Government of Vietnam has not demonstrated serious commitment to tackling wildlife crime, says the organization. Instead, the past decade has seen Vietnam serve as a prominent transit route for large ivory shipments to China as well as overseeing a growing carving industry and one of the world’s biggest markets for ivory sales.

The report states that since 2009, 56 tons of ivory have been seized in Vietnam and a further 20 tons linked to Vietnam seized in other countries. This is equivalent to ivory sourced from approximately 11,414 elephants.

EIA estimates that since 2015 the ivory traffickers identified during the course of their investigation have been linked to seizures totalling 6.3 tons of ivory and 299 kilograms of rhino horn, including the recent record seizure of 50 rhino horns in Malaysia in August 2018. Between January 2016 and November 2017 there were at least 22 successful shipments of ivory from Africa, with an estimated weight of 19 tons and potential revenue of $14 million.

Source: EIA International and Maritime Executive, 16 September 2018

SA Documentary on Rhino Poaching wins International Award

STROOP – Journey into the Rhino Horn War, is getting a lot of attention all the way around the world at the moment and its clear to see why!

The film tells the shocking and touching story of the ongoing poaching of the rhinos and the trade in its coveted horn. Four years in the making, this labour of love saw de Bod and director Susan Scott sell their houses, leave their jobs and move in with their mothers in order to document what is happening in the fight to save the rhino from extinction.

The locally made documentary film, has just been awarded the 2018 Green Tenacity Award by the judges of the Eighth Annual San Francisco Green Film Festival, coming ahead of the film’s world premiere at the festival which will run from Thursday September 6 through to Friday, September 14. STROOP was one of 26 final films selected out of 350 submissions and one of five to win awards – a huge credit for producer, Bonné de Bod.

It was supposed to be a 6-month project but soon turned in to a dangerous and intense expedition for which the passionate duo often found themselves in immense danger. In an exclusive first, de Bod and Scott filmed special ranger units inside the world-famous Kruger National Park and at the home of the white rhino, the Hluhluwe iMfolozi Park and travelled undercover to the dangerous back rooms of wildlife traffickers and dealers in China and Vietnam.

The result is a hard-hitting – and ultimately moving – documentary that challenges and shocks viewers.

Says Bonné “We are over the moon at receiving this prestigious award and it makes all our hard work and dedication to this film that much more worthwhile. Hopefully, it also means that the recognition will create additional awareness and encourage even more people to see the film when it releases.”

According to the festival’s criteria, the Green Tenacity Award is given to filmmakers “who show great tenacity in exploring crucial environmental issues in their work.”

Made solely with crowdfunding and grants – the film shows why this hunted and targeted species deserves to live in dignity, free from exploitation by illegal traders, poachers, money men and corrupt governments.

STROOP – Journey into the Rhino Horn War will premiere in South Africa in February 2019 after its film festival run overseas.

Source: sandtonchronicle.co.za, 22 August 2018.

Massive Rhino Horn bust in Malaysia

Malaysia Rhino Horn Bust

Malaysia has made a record seizure of 50 rhino horns worth an estimated $12 million at Kuala Lumpur airport as they were being flown to Vietnam, authorities said Monday.

Customs officials found the parts in cardboard boxes on August 13 in the cargo terminal of the capital’s airport, said Abdul Kadir Abu Hashim, head of Malaysia’s wildlife department.

The 50 rhino horns weighed 116 kilogrammes (256 pounds) and are worth about 50 million ringgit ($12 million), he told AFP, adding that the seizure was “the biggest ever in (Malaysia’s) history in terms of the number of horns and value”.

Vietnam is a hot market for rhino horn, which is believed to have medicinal properties and is in high demand among the communist nation’s growing middle class.

Trade in rhino horn was banned globally in 1977 by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), but illegal hunters have decimated rhino populations to sate rampant demand in East Asia.

A single kilo of rhino horn can fetch tens of thousands of dollars in the region, where many falsely believe it can cure cancer.

All rhino species are under threat of extinction, according to the International Union for Conservation of Nature (IUCN).

Abdul Kadir said authorities were unable to identify the origin of the animal parts. Rhino horn sent to Asia typically comes from Africa.

Officials also found a huge stash of animal bones—believed to be from tigers and leopards—in the same shipment, with an estimated value of 500,000 ringgit.

Authorities have not made any arrests over the seizures.

Elizabeth John, from wildlife trade watchdog Traffic, described the rhino horn seizure as “staggering” and urged authorities to track down the people behind the smuggling attempt.

Kuala Lumpur is a hub for cheap flights around Southeast Asia, and has become a key transit point in the smuggling of rare animal parts.

Source: AFP, 20 August 2018

World Cup mania a boon for counterfeiters

FIFA_2018

It’s that time in the sporting calendar when football fans go wild for the FIFA World Cup – it’s also that time when counterfeiters take advantage of the international sporting craze.

Five days into the World Cup and the 2018 game fixture has been besieged with fake tickets, apparel and other merchandise as authorities across the world work to crackdown on the illicit trade.

In Hong Kong, officials launched Operation Goalkeeper at the end of April in a bid to prevent counterfeit items entering the state and have already seized 259,000 knock-off World Cup products worth more than HK$15m (US $1.9m). Five arrests have also been made.

Amongst the infringing items seized were 50,000 pairs of shoes, 29,000 bags and 57,000 jerseys bearing fake FIFA trademarks, World Intellectual Property Review reported.

The confiscated items were found in 12 shipping containers, four goods vehicles and a batch of air parcels.

In China’s Guangdong province more than 130,000 fake merchandise has been seized. Thousands of footballs bearing FIFA World Cup insignia were to be exported to Tanzania, while 4,500 fake jerseys were seized before they could be exported to Malaysia.

Shanghai customs has also confiscated more than 130,000 knock-off items destined for Colombia, and Shenzhen customs seized 4,000 clothing items in April including 3,000 t-shirts and 1,000 hats with infringing logos that were also due to be exported from the country.

Meanwhile, in the UK, more than £240,000 of fake football kit, made up of 12,000 items entering the UK via East Midlands Airport, has been seized by authorities since April, according to Leicestershire County Council.

“Unsuspecting football fans can fall victim to purchasing fake and sometimes unsafe goods during the World Cup,” said county council leader Nick Rushton. “Trading Standards involvement at the border not only protects fans but also manufacturers and retailers from being undercut.”

Host country Russia has also confiscated 270,000 fake products featuring World Cup logos.

It’s not just clothing and merchandise that has generated a flood of replicas; tickets too have been faked.

Around 10,000 football fans from around the world who have travelled to Russia for the World Cup have discovered they have been scammed by purchasing fake tickets. Reports claim that a Russian company, Anji MSK, was behind the fake ticket scam, falsifying a letter from FIFA authorising the company to sell the tickets. The firm, which is no longer reachable, is believed to have netted more than $100m from the scam.

With China being a centre for the manufacture of counterfeits, and with a northern border with Russia, China’s General Administration of Customs committed to cracking down on counterfeits ahead of the 2018 World Cup in Russia. Chinese customs officials, along with counterparts in Hong Kong and Macau have worked on a campaign that has been running since March.

Both the International Trademark Association and FIFA have warned about the presence of fake merchandise, which can range “from footballs to caps, from clothing to toys, and from footwear to miscellaneous items such as pins, keychains, World Cup Trophy replicas and other items that feature FIFA trademarks”.

“FIFA runs a global licensing programme, which gives a wide range of licensees the opportunity to produce official licensed products for the FIFA World Cup. However, there are also companies that seek to produce items featuring FIFA’s official marks without purchasing the required licence,” the global football body said. “For the 2018 FIFA World Cup, FIFA will be working together with customs authorities across the world to be able to use existing structures and know-how in the joint battle against counterfeit products.”

The organisation, which is monitoring IP registers and has set up commercial restriction areas around stadiums, said it would take all measures to stop infringing activity.

In 2014, some seven million fake World Cup items destined for foreign markets were seized by Chinese authorities.

Source: SecuringIndustry.com, article by Katrina Megget, 18 June 2018

Digital Counterfeits? Think again – new break-through in 3D printing

Rize one 3D print

Katrina Megget writing for securingindustry.com has penned the following article which describes the significant strides which the 3D printing has made in recent times. Fears of a proliferation in ‘counterfeit production’ may just be arrested given developments which envisage the ‘embedding of digital rights’ into the 3D printing process.

3D printing has received an upgrade – it can now 3D print secure digital information such as QR codes, which could be used in anti-counterfeiting.

Introduced by Boston-based additive manufacturing firm Rize Inc, the development is the first example of Digitally Augmented Parts; essentially the printing of physical parts with digital information.

3D printing (also known as additive manufacturing), which produces a 3D object by depositing successive layers of a material on top of each other as directed by a computer-generated model, has become one of the fastest growing industries, extending into the toy, automotive, aerospace and medical device sectors, among others.

However, there are concerns that 3D printing could be a threat to brands and businesses through counterfeiting.

Rize’s technology directly addresses this concern by enabling a link between the physical 3D printed product and digital information, thereby integrating Industry 4.0 technologies such as blockchain, augmented reality and virtual reality.

According to the company, the “immutable connection…bridges the gap between the virtual and real world”.

Julie Reece, VP of manufacturing at Rize, explained the technique as embedding ‘Digital Rights Management’ into the functional 3D printed parts “for compliance, authenticity and traceability”.

“A significant challenge in the additive manufacturing industry are parts that are non-compliant due to design changes, piracy, counterfeit and obsolescence, that adversely impact the user and customer experience and result in rework, recalls and loss of brand value,” Reece told 3DPrint.com.

The technology expands on the company’s hybrid 3D printer that it introduced about two years ago. This combines two types of printing to form a multi-material technology that is called Augmented Polymer Deposition (APD), which has been used to make industrial-strength parts such as system components and medical testing equipment.

The enhancement now means 3D printed products can be embedded with secure digital information, such as in the form of a QR code. The QR code can then be scanned and read by a smartphone app, which relays the digital information, such as product, manufacturing and supply chain details, to the user.

Rize said the development is important for 3D parts and components used in more complex, multi-part products because it secures the supply chain and ensures authenticity.

“Additive is a part of a bigger strategy for many companies, which is a digital strategy or an Industry 4.0 strategy but really that digital strategy is not fully realised because when you print the part, the digital link breaks,” Andy Kalambi, president and chief executive of Rize, told TCT Magazine. “The moment the part gets printed on the machine it’s a physical part and there is no digital element left in it. The break of the digital link is a big issue for this industry overall to realise the promise of what is called Industry 4.0.”

On Rize’s website, Kalambi said: “This is the first step towards embedding intelligent capabilities within the part and connecting them through a digital thread into the digital twin of the part. Rize is leading the integration of additive manufacturing into the digital ecosystem, which will redefine the user and customer and experience, and ultimately scale the technology to an entirely new segment of commercial and industrial users.”

The development is a significant breakthrough for industry, which has previously voiced concerns that 3D printing will herald the production of counterfeit copies, emphasising the need for anti-counterfeiting measures.

Last May, scientists from the mechanical and aerospace engineering department at New York University noted there was a need to have anti-counterfeiting features within the computer-aided design model. They suggested a unique combination of processing and printing parameters built into the product’s digital design, which if stolen, would produce a defective product.

Other anti-counterfeiting features suggested for 3D printing include novel material compositions that cannot be easily replicated, or quantum dots, which are nanoparticles embedded in the 3D-printed object that can emit different wavelengths of light and provide a unique manufacturing signature.

Source: securingindustry.com, authored by K. Megget, 10 April 2018, [Picture: TCT Magazine]

CBP – e-Commerce Strategy to address online shopping and growth of illicit goods

E-Commerce Strategic PlanCustoms and Border Protection has developed an e-commerce strategy in a bid to tackle the increase in online shopping and growth of illicit and counterfeit goods shipped as small packages.

The strategy, which notes that CBP must “adapt” to the new e-commerce landscape, seeks to address emerging threats posed by the global change in commerce habits and ensure CBP has the means to enforce violations.

Under the new e-commerce strategy, CBP will, among a number of measures, look to enhance data collection and intelligence, develop and utilise state-of-the-art techniques and technologies, review its existing legal and regulatory authorities, seek to strengthen partnerships with the private sector, facilitate international trade standards for e-commerce, and educate the American public of the risks, both as consumers and as importers, associated with non-compliant products.

The crackdown and new emphasis for the CBP reflects the shift from traditional methods of importing via large, containerised shipments to small, low-value packages as direct-to-consumer business becomes more common. This has presented new inspection and data challenges for CBP, especially as the volume of these small packages has increased.

In addition, transnational criminal organisations are increasingly shipping illicit goods to the US via small packages on the belief there is a lower risk of interdiction and less severe enforcement consequences if caught. CBP said this illicit activity poses a risk to the health and safety of Americans and compromises US economic security.

The new e-commerce strategy also follows a report last month by the Government Accountability Office, which reviewed the enforcement efforts by CBP and US Immigration and Customs Enforcement in light of the increase in online shopping and sale of counterfeit goods. The report found that CBP had conducted a limited evaluation of its efforts, suggesting its activities were not the most efficient or effective, and recommended it evaluate its activities to enhance intellectual property enforcement.

The new strategy has a strong focus on data, which is one of the current limitations around enforcement of small packages. For instance, according to the strategy document, CBP will strengthen partnerships with stakeholders and encourage information sharing, proposing benefits for those parties who share advance electronic data and other information and will penalise those who are not compliant in this area.

The agency will also increase its operational efficiency and effectiveness by using data analytics, data mining, and an array of powerful analytical tools. In addition, CBP will expand its existing advance electronic data pilot in the international mail environment to include additional foreign postal operators.

Potential technology options include mobile applications and an e-commerce resource library, the strategy notes. CBP will also develop a portal that contains a database on importers that CBP has vetted and deemed “trusted”.

Source: USCBP and Securing Industry, online article 2018.03.28