2.6 Counterfeiting

2.6

Counterfeiting

International definition of counterfeit trademark goods:

“Any goods, including packaging, bearing without authorization a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the rights of the owner of the trademark in question under the law of the country in which the procedures set forth in Chapter II are invoked” (Anti-Counterfeiting Trade Agreement of 2011, Article 5, Paragraph D)

International definition of pirated copyright goods:

“Any goods which are copies made without the consent of the right holder or person duly authorized by the right holder in the country of production and which are made directly or indirectly from an article where the making of that copy would have constituted an infringement of a copyright or a related right under the law of the country in which the procedures set forth in Chapter II are invoked” (Anti-Counterfeiting Trade Agreement of 2011, Article 5, Paragraph K)

Applicable domestic laws in Thailand:

Copyright Act of 1994; Patent Act of 1979; Trademark Act of 1991; Customs Act 1926.

Interviewees reported that counterfeiting is one of the most prominent forms of TOC in Thailand. Counterfeited products include brandname fashion items such as clothes, bags, shoes, sunglasses, jewellery, watches and cosmetics; media goods including CDs and DVDs; consumables such as food and liqueurs; and drugs such as medicines and supplements for muscle growth.

One stakeholder estimated that roughly 30% of the counterfeited products available in Thailand are manufactured in Thailand and that 70% are imported from foreign countries, with China as a major source. Myanmar is also emerging as a convenient production site due to the lack of intellectual propertyrelated laws in the country. According to the existing literature, significant manufacturing countries include China, Malaysia, Thailand, Indonesia, Japan, the Philippines, Korea, Singapore, Vietnam,202 and the Russian Federation.203

202 United Nations Interregional Crime and Justice Research Institute. (2011). Counterfeiting. A Global Spread, a Global Threat. Turin, 61. Retrieved from http://www.unicri.it/topics/counterfeiting/organized_crime/reports/CTF_2011_Unedited_ Edition_Final.pdf 203 Schmid, T. (2010). The Darker Side of Tropical Bliss: Foreign Mafia in Thailand. Thailand Law Forum, 2. Retrieved from http://www. thailawforum.com/foreign-mafia-thailand.html

In addition to goods, money is also counterfeited; for example, in 2013 the Department of Special Investigation seized 10 million baht worth of counterfeited banknotes.204 Moreover, recently it was reported that there is a webpage claiming to sell highquality Thai counterfeit banknotes.205 Also this indicates a new trend regarding counterfeiting products.

According to the interviewees, counterfeiters are a mix of Thai and foreigners. Thai offenders are present at all steps of the counterfeited goods supply chain. They were the main actors in production both in Thailand and in other countries. For example, Thai offenders will cross the border to Myanmar in order to produce fake items and then smuggle the goods into Thailand. Thai groups have also been known to finalize production of goods coming from China by adding logos to the items imported into Thailand. Thai groups are also known to be transnational smugglers and final retailers.

Foreign groups involved in counterfeiting include Chinese, Laotian, Myanmar, Malaysian, Cambodian and European nationals. Europeans often base their Asian operations in Thailand because the Kingdom has a more developed infrastructure, better transportation and overall resources compared to neighbouring countries.

The characteristics of TOC are present in the production and dissemination of counterfeit goods. Counterfeiting schemes require a well-structured import system involving multiple countries, and thus effective cooperation among different groups working together. Practitioners described the process as increasingly systematic, utilizing larger and more organized networks with coordinated meetings and tasks. The supply chain usually follows four steps, each handled by a different broker. The first manages the production of the counterfeited product; the second transports the product to the border; the third trades the product across the border until the final destination; and the fourth is responsible for retailing the product.

204 Department of Special Investigation of Thailand. (2013). DSI Annual Report 2013. DSI, Bangkok. 205 MGR Online. Thai webpage selling fake banknotes. Retrieved from https://mgronline.com/onlinesection/detail/9620000104326

Thailand as an Origin, Destination and Transit Country

Thailand is an origin site for the production of CDs and DVDs that are to be smuggled largely to Aranyaprathet over the Cambodian border, as well as steroids which are smuggled primarily to Australia. Malaysian organized criminal groups based in the southern Thai city of Hat Yai are known to produce fake liqueurs. Thailand is also one of the main producers of trademark-violating toys.206

Raw ingredients for the production of counterfeit medicines have also been found in Thailand. For example, a large counterfeit medicine seizure in Spain revealed that Thailand was the source country for the raw components of the drugs, which included anabolic steroids, hormone-boosters, and cancer drugs.207

In the border regions, Thailand is mostly a transit country. Thailand is an ideal transit country because the Thai Copyright Act of 1994 does not criminalize the simple possession of counterfeited goods.208 As a result, law enforcement officers do not have the mandate to arrest individuals who are merely carrying counterfeit products in transit. In addition to counterfeit goods from China, gold from Dubai is often moved across the Thai border en route to its final destination.

Myanmar is emerging as a convenient production site for counterfeit products due to the lack of copyright laws. Therefore, Thai counterfeiters are increasingly relocating their productions into Myanmar from where they manage trafficking operations into Thailand, often with the use of shipping containers.

In 2015, the American Embassy in Thailand promoted a public awareness campaign to educate the public on the risks posed by fraudulent medicines.

Informative posters were displayed in popular public areas in Bangkok over a period of several months. According to the promoters of the campaign, consumer-oriented awareness raising should be coupled with increased law enforcement cooperation and training.

2.6.1 Emerging Trends: Counterfeiting

Counterfeiting techniques have greatly improved. The counterfeited items look increasingly like the products they are trying to imitate.

Smugglers are utilizing new ways of deceiving the authorities when concealing the items, such as double-bagging the products or hiding them in clothing.

206 United Nations Interregional Crime and Justice Research Institute. (2011). Counterfeiting. A Global Spread, a Global Threat. Turin, 61. Retrieved from http://www.unicri.it/topics/counterfeiting/organized_crime/reports/CTF_2011_Unedited_Edition_Final.pdf 207 United Nations Interregional Crime and Justice Research Institute. (2013). Organized crime strategies in the production and trade of counterfeit medicines. Indications regarding organized crime motivations, modus operandi and strategies. Turin, 22. Retrieved from http:// www.unicri.it/topics/counterfeiting/medicines/savemed/D7.1_OC_Strategies_2013.pdf 208 The Copyright Act B.E. 2537 Section 31 reads “Any person who knows or should have known that a work is made by infringing the copyright of another person and commits any of the following acts against the work for profit is deemed to infringe the copyright: (1) selling, occupying for sale, offering for sale, letting for hire, offering for letting for hire, selling by hire purchase or offering for hire purchase; (2) communication to public; (3) distribution in the manner which may affect prejudicially the owner of copyright; (4) self-importation or importation by order into the Kingdom.”