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Cross-Sector Standardization Effort Needed to Combat Counterfeiting, Says ANSI Joint Member Forum

New York, Apr 19, 2010

With an estimated effect on 2 to 7 percent of all world trade, counterfeiting is one of the fastest-growing and farthest-reaching economic crimes. Each year, $200 to $600 billion of illegitimate business is conducted across all industries – from pharmaceuticals and consumer products, to financial instruments and machine parts. Currently, manufacturers rely upon their own industry-unique solutions to manage the counterfeiting challenge with varying levels of success. But for organizations that operate many different product lines, a more robust and effective cross-sector focus is needed.

To help define and address the need for cross-sector anti-counterfeiting solutions, the American National Standards Institute (ANSI) held a Joint Member Forum (JMF) on April 14, 2010, entitled Workshop on Anti-Counterfeiting Standards and Conformance Measures: Developing a public-private partnership for addressing gaps in the global supply chain.

More than 80 experts from government, industry, business, consumer groups, and academia attended to share their own perspectives on the state of the problem and current strategies in use.

Overall, participants agreed that the most urgent need are consensus-based, cross-industry standards or best practices that can address the current gaps in anti-counterfeiting efforts. Awareness and education of counterfeit goods and detection measures are also critical – not just for industry and the standards and conformance community but also for consumers and law enforcement officials.

“A lot is already being done in various areas to fight counterfeiting. But we need to identify the gaps and possible overlaps in how standards and conformity assessment systems are enabling solutions for protecting health and safety,” explained S. Joe Bhatia, ANSI president and CEO, in his opening remarks. “ANSI is pleased to have organized this workshop as a neutral venue for all stakeholders to come together to address key issues and priorities, and to explore solutions.”

The first speaker, Mark Crawford, senior trade and industry analyst at the U.S. Department of Commerce’s Bureau of Industry and Security, gave an overview of counterfeiting issues from the public sector perspective. He emphasized the problems of traceability and accountability, as well as the confusion over which government authorities to contact when counterfeit goods are discovered. From Mr. Crawford’s perspective, raising awareness has been and will continue to be a key priority.

Next, Brian Monks, vice president, anti-counterfeiting operations, Underwriters Laboratories, Inc. (UL), gave a lively presentation from the front lines of the war on counterfeiting. Mr. Monks noted that much time and effort is spent tracking down counterfeiters; making it harder for them to steal in the first place would make greater strides towards a solution. Driving the point home, Mr. Monks said, “If you make something of value, I guarantee you are being counterfeited.”

Third, Mike O’Neil, executive director of the North American Security Products Organization (NASPO) gave an overview of new initiatives within the International Organization for Standardization (ISO) to detect, prevent, and control fraud. Mr. O’Neil serves as secretary for ISO/TC 247, Fraud Countermeasures and Controls, and as the U.S. Technical Advisory Group (TAG) administrator for ISO/TC 247, Fraud Countermeasures and Controls, and for ISO/PC 246, Anti-Counterfeiting Tools.

He laid out the dangers of counterfeit goods, noting that making money quickly is the common goal, with no allowance for safety considerations. Furthermore, counterfeiters are often tied to organized crime and other criminal elements, and their activity takes away job opportunities for legitimate workers. Mr. O’Neil cited all of these reasons as a reminder that counterfeiting is not a victimless crime, and is an issue that deserves coordinated attention.

Finally, supply chain vulnerabilities were addressed by John Spink, associate director of the Anti-Counterfeiting and Product Protection Program (A-CAPPP) of the School of Criminal Justice, and instructor at the National Food Safety & Toxicology Center, both at Michigan State University. He chairs the U.S. TAG to ISO/TC 247 and ISO/PC 246.

Dr. Spink explained the problem of “quality fade,” a common expectation in some cultures that facilitates counterfeiting by allowing for inferior-quality products to be accepted by consumers. He also described “the crime triangle,” which comprises a likely offender (criminal), a suitable target (victim), and an opportunity. To combat counterfeiting, Dr. Spink asserted that we need to identify the best ways to disrupt this triangle.

After the individual presentations, Scott Cooper, ANSI’s vice president of government affairs, moderated an interactive discussion comprising the previous speakers plus Linda Golodner of the National Consumers League and Bruce Mahone of SAE International.

Together with important audience contributions, panelists described the critical importance of better coordination across industry sectors. Raising public awareness about counterfeiting’s massive reach and its dangerous ties to organized crime and terrorism are key to moving toward more effective anti-counterfeiting measures in the global marketplace.

Participants agreed that as coordinator of the U.S. standards and conformity assessment system, ANSI has the reach, influence, and capability to move this project forward. The possibility of a focused anti-counterfeiting conference during World Standards Week 2010 was discussed, with a tangible work product or report as the desired outcome of such a conference.

“Today’s discussion made it clear that working collaboratively and internationally will be essential to strengthening the global supply chain and reducing counterfeiting, and we are pleased to see that there is a strong desire throughout the community to develop this kind of action,” said Mr. Bhatia at the workshop’s end. “ANSI is well-positioned to continue facilitating this consensus-based activity, bringing everybody to the table to create a structure for a tangible outcome of executable solutions.”

ANSI members may view the presentations, speaker bios, and a list of attending organizations here. A slideshow of photos taken during the event is also available.

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