CONSUMER BEWARE - COUNTERFEIT GOODS SEIZURES ON THE RISE

Customs House, Sydney International Airport

19 March 2010

Subject: Counterfeit Goods Seizures on the Rise

BRENDAN O'CONNOR: Every day, Customs and Border Protection seizes counterfeit goods through the mail centres, through container examination facilities and airports. Last year, we seized on average, 3,000 or more counterfeit consumer items each day, or nearly 22,000 goods per week. That is more than double the number that were detected in 2007.

These items not only pose a commercial concern to registered trademark holders, they cheat unwary consumers and can present a threat to health and safety. For example, many counterfeit electrical appliances, batteries, mobile phones and accessories, fail soon after purchase. Sunglasses may carry fake UV ratings, which can cause eye damage. Fake perfumes and cosmetics are often contaminated with lead or banned chemicals. Counterfeit children's toys are often of a poor quality and contaminated with lead. These may present choking hazards, poisoning, or physical injury to children.

These counterfeit items are often ordered by consumers over the internet, bought at a marketplace, or imported from Asia and other countries, with the intention of being sold on the Australian market.

Many fakes are very close copies of the genuine goods, and detecting them can sometimes be difficult.

The facts are, if it seems too good to be true, then it probably is.

So my advice to consumers today is, buy from a reputable retailer or seller, be very suspicious of new goods being sold cheaply, check and read labels carefully, and for example, spelling mistakes can be the best indicator to determine that the goods are fake.

Are there any questions?

QUESTION: There are the websites themselves that people would be buying them from, what are some of the indicators that would show a shopper that these probably aren't going to be the goods they should be getting?

BRENDAN O'CONNOR: Well, I go back to the first principle, if it seems too good to be true, it probably is. If for example the purchase price is way below the market price, then it's very unlikely to be a genuine article, and therefore people have to consider, when they make a decision to purchase, particularly online, which of course is increasing, year by year, then they have to consider the facts presented.

Now I understand why people would like to get a bargain, it's human nature to do so, but they have to consider the facts, and that's why I say that they must consider whether in fact, online, they're engaging with a reputable seller or retailer, or whether in fact the facts presented, would allow a reasonable person to conclude that they're genuine.

QUESTION: What about flipping the coin the other way, people who are happy to have a cheap counterfeit, that looks like the product, but isn't the genuine article, they're out there looking for very cheap products, and trying to import them in, then what can you say to deter them?

BRENDAN O'CONNOR: Well clearly the result of 1,143,000 articles detected by Customs and Border Protection in one year, indicates for those who seek to import goods that are not genuine, you will be caught. We will seize those goods, and we will of course not provide them, they will not be passed on to those who ordered them.

Those affected, that is, those companies that have a registered trademark, can indeed seek damages. It is more likely that they will seek damages against an importer who seeks to import a commercial quantity, but I say to those people—to those who are considering ordering online, which is a legitimate approach, be careful that you are indeed seeking to import a genuine good. If not, Customs and Border Protection will seize the goods. Indeed, there may be further consequences—particularly if the goods are of a commercial quantity.

QUESTION: And is your concern, you know, the 16-year-old girl who orders a DVD on line, and thinks she's getting a bargain, or is it the people who purchase 400 DVDs online?

BRENDAN O'CONNOR: Well, my main concern, can I say, in order of concerns, is the health and safety of Australians. So there are particular goods, as I've indicated, that are contaminated, that are toxic, that could lead to injury, particularly for children.

As I've said, there may be toys that have lead in them, which can cause toxicity and could poison a child. There could be particular toys that could cause choking, because they're not built to the proper safety standards. There are perfumes that contain lead. So that would be my first concern.

My second concern generally, is that I want to ensure that Australians are not ripped off, and therefore, I ask people to consider again, the general principle, if it's too good to be true, it's probably because it is.

And thirdly, if people are seeking to import a commercial quantity of fake goods, as I indicated, Customs and Border Protection will catch you, and indeed those companies affected, may seek damages.

QUESTION: [Inaudible Question]

BRENDAN O'CONNOR: I don't have a particular cost to the economy, but it is significant. We have to concern ourselves with the exponential growth of people seeking to order goods online. That is a legitimate process.

But if it leads to an increased likelihood of people seeking to bring in fake goods, then, of course, it will impact upon those good companies, those reputable companies that have genuine goods made at our standards.

But as you can see by the sheer quantity of goods, 1,143,000 goods last year, that is a very high number that's detected. Of course, there are those that may not be detected, so we have to consider that impact on the commercial world, as well as, of course, the consumer world.

So it is a significant cost, but I wouldn't go to a particular precise cost.

QUESTION: [Inaudible Question]

BRENDAN O'CONNOR: I might have the Customs officials at some point answer that. Catherine, did you want to just make…

CATHERINE ASBRIDGE: We destroy the goods, so this—what you see here equates to about two and half, three weeks worth of goods that we've seized, and this lot will—is due for destruction by incineration next week.

QUESTION: [Inaudible Question]

BRENDAN O'CONNOR: Well look, as to how that happened, I'll certainly be seeking advice from the Australian Federal Police and Customs. This government takes illegal drug importation very seriously. We have a very major challenge fighting organised crime and drug importation. And, therefore, we dedicate resources to ensure that does not happen.

In this case, regrettably, a person was detained. And because there was a suspicion that there was a particular drug being brought into the country, once that was determined not to be the case, the person was released.

As I say, regrettable, but this government takes illegal drug importation very seriously, and will continue to fight against such behaviour.

QUESTION: [Inaudible Question]

BRENDAN O'CONNOR: I'll get a brief from the Australian Federal Police and make a decision as to what needs to be further actioned. But the Australian Federal Police do a fantastic job, along with other agencies, in detecting illegal importation of drugs.

They are a scourge on our streets. They hurt—they harm our young people, and we need to continue to fight against such illicit drug importation. But I'll have the AFP brief me on the matter and see whether we need to do anything procedurally.

QUESTION: [Inaudible Question]

BRENDAN O'CONNOR: As I've said, I will get a brief on circumstances and determine whether any action needs to be taken by the Government.

QUESTION: [Inaudible Question]

BRENDAN O'CONNOR: Well, firstly, can I say, I applaud Customs and Border Protection for its good work, and the fact that it continues to improve the way in which it detects illegal drugs and illegal goods. Can I also say, because of the increased use of online ordering, there's an increased likelihood of fake goods being available, and, therefore, exposing the consumer to more risk. That's why it's timely we remind the consumer about those risks.

QUESTION: [Inaudible Question]

CATHERINE ASBRIDGE: Yes, we - from our perspective, it's an ongoing battle to process it and destroy the goods. We certainly would - we've noticed an increase, in fact. If you look at the Sydney postal facility, it has literally doubled from - if you look at December '09 compared with December '08, it's just been exponential growth. So it's hard to keep up with it all.

QUESTION: [Inaudible Question]

CATHERINE ASBRIDGE: I think, sir, the postal system, as the minister said, it's a lot of individuals. We do have some people who are bringing in commercial quantities as well, and, obviously, we put a greater emphasis and focus on trying to curtail commercial quantities that are coming in.

QUESTION: Do they try to sneak it in, hide it in, shape it in a different way, make it look like it's nothing too suspicious?

CATHERINE ASBRIDGE: Sometimes it's concealed, sometimes it's not. It varies. Sometimes the concealments are quite sophisticated but it depends on the nature of the goods and the quantities. Some of the smaller more attractive items are - will be concealed, the higher valued items. We've seen for example with tobacco and cigarettes smuggling we've seen some very sophisticated concealments, more along the lines of the concealments we'd see for narcotics and then in other instances if that's brought in in a 40 foot container and there's no attempt to disguise it.

QUESTION: Mr O'Connor's talking about civil action in terms of license holders going to court, but is this illegal? Is it a legal issue here? Is it a crime to bring this stuff in as an importer?

CATHERINE ASBRIDGE: If there's a notice of objection, so if the owner of the registered trademark has issued a notice of objection yes it is illegal and they will be pursued in the courts by the owner of the trademark.

QUESTION: Minister, is there a need to have perhaps a tougher law to stop people bringing in containers full of this stuff that are quite clearly not real and not intended to be brought in by licence holders?

BRENDAN O'CONNOR: Oliver, I think the laws are adequate. I think the efforts by the agency Customs and Border Protection today are clearly demonstrated. They are very effective in detecting these goods. There is a capacity, of course, for that company or companies that produce genuine articles to pursue people in the courts. I think it's important for people to understand…the likelihood that many goods are not genuine. If they're ordering online or if they're purchasing at marketplaces overseas they need to consider that. They need also consider that if they seek to bring them into the country, if they're not genuine goods they will be seized so there is a loss to the consumer. But again I think it's important to remind everyone that the primary concern is the danger that some of these goods pose to the community.

QUESTION: Well bearing that in mind is it not time or have you not considered making some of this a criminal offence?

BRENDAN O'CONNOR: As has already been indicated to you, it is unlawful to bring such goods into the country. I'm reminding people not to be swindled by fake presentations of particular goods. I believe that people should apply the principle if it looks too good to be true it probably is. That's a common sense approach by consumers that I think will protect most people's interests most of the time. For those people who seek to bring in goods unlawfully, of commercial quantities, they will be pursued by those companies affected. Now what we've seen is a doubling of the detection in one year; I think that's really an example of how effective Customs and Border Protection have been in detecting these goods.

QUESTION: So it's a bigger problem, so have you considered making it a criminal offence?

BRENDAN O'CONNOR: I think it's been—the fact that we've managed to detect twice as many goods in one year shows how effective Customs and Border Protection have been and I believe that that is the right approach and indeed the fact that companies can pursue people who seek to import such goods and are more likely to seek redress for those who bring in commercial quantities is a sufficient approach.

QUESTION: [Inaudible question]

BRENDAN O'CONNOR: Well as I've indicated, we've just doubled the number of detections. That speaks volumes for the effective approach taken by Customs and Border Protection. And I'm also indicating that some of these goods pose a danger to the consumer—and they really must consider that when they are considering ordering goods either online, or purchasing overseas and looking to bring into the country.

QUESTION: [Inaudible question]

BRENDAN O'CONNOR: That's a difficult question so far as the quantity, but clearly, the fact that we've doubled the detection is a very good thing. What we are looking to do—and why here today is to remind consumers about the dangers. And I think most people do not want to of course endanger themselves or family members, and we need to be therefore mindful of the effects of certain goods, and therefore be conscious of whether in fact the goods are genuine, and whether they meet the safety standards when they're being purchased.

QUESTION: [Inaudible question]

BRENDAN O'CONNOR: We do a very good job in detecting illegal drugs. We have a major challenge as the—as do most countries, in dealing with illegal drug importation. Australian Federal Police and Customs and Border Protection do a fantastic job in fighting this challenge. But in relation to that particular matter, I will receive advice and as to the operation itself, as to the procedures in place and if I think there needs to be some action taken the Government will be considering it.

QUESTION: [Inaudible question]

BRENDAN O'CONNOR: Can I just say again of course it's regrettable. If anyone's been inconvenienced when Customs or the AFP are doing their job fighting crime, preventing illegal drug importation, but in relation to that particular matter, I'll receive advice, and see whether we need to respond in an additional way.

But can I just finish by saying in relation to that matter, I have full confidence in the Australian Federal Police and Customs and Border Protection in the job they do, a very important job - keeping our streets safe from illegal drug importation, and we can always do more.

But we do a very good job.

QUESTION: [Inaudible question]

BRENDAN O'CONNOR: Well I say to consumers in relation to all goods that they consider whether in fact they are—whether they are in fact genuine or not. If they are fake, then of course the companies affected could pursue them through the courts, and so there are consequences if you do things improperly.

And therefore I'm just advising consumers to be aware of the situation, be mindful of the fact that some goods are injurious to their health.

QUESTION: [Inaudible question]

BRENDAN O'CONNOR: Customs and Border Protection are doing a fantastic job exemplified by the fact that there's been more than a doubling of the number of goods and doubling the number of goods that's been detected by Customs and Border Protection in one year.

I think today illustrates how successful customs and border protection have been in detecting fakes.

QUESTION: [Inaudible question]

BRENDAN O'CONNOR: Well as the Minister for Immigration has made clear, as the Government's made clear, Christmas Island is the processing centre for irregular arrivals. And that will continue. And indeed six months ago, the minister put in place a contingency plan that would h… that would provide the opportunity if required to use the IDC in Darwin.

But at this point, there is no requirement to use that centre.

And Christmas Island will remain the processing centre for irregular arrivals, and that will continue. We want to ensure, of course, we have a very effective border protection strategy against irregular arrivals. It's in place now - and it will remain in place.

QUESTION: As I say, Christmas Island will remain the actual processing centre for irregular arrivals.

Thank you.