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Know Your Customer (KYC) and Other Anti-Counterfeiting “Best Practices”

In January of this year (and July of last year) I wrote four (4) posts about “Third-Party Intermediaries” in the maritime, as well as the self-storage/landlord industries that facilitate the transport or storage of counterfeit goods—knowingly or unknowingly.

I provided some context to the problem, a few case studies, as well as suggesting a number of steps these two industries are encouraged to apply in an effort to prevent their services from being used by criminals.

*Links to those posts can be found at the end of this post.

I have since come to learn of comprehensive “Best Practices” strategies laid out for both the maritime transportation and landlord/self-storage industries, respectively, by the “International Chamber of Commerce (ICC)” and their affiliate the, “Business Action to Stop Counterfeiting and Piracy (BASCAP.)”

WHAT IS THE INTERNATIONAL CHAMBER OF COMMERCE (ICC) BUSINESS ACTION TO STOP COUNTERFEITING AND PIRACY (BASCAP)?

If you’re not familiar with BASCAP, the following quote was extracted from their website:

“ICC created Business Action to Stop Counterfeiting and Piracy (BASCAP) to raise awareness of the economic and social harm of counterfeiting and piracy and to petition for greater commitments by local, national and international authorities in the enforcement and protection of intellectual property rights.”

SYNOPSIS OF THE ICC/BASCAP BEST PRACTICES RECOMMENDATIONS

KNOW YOUR CUSTOMER, DUE DILIGENCE AND MARITIME SUPPLY CHAIN INTEGRITY: Best Practices under the Declaration of Intent to Prevent the Maritime Transportation of Counterfeit Goods, ICC/BASCAP

Know Your Customer (KYC):

  • Verify the identity of a potential customer
  • Perform due diligence and ongoing monitoring of their established customers
  • Identify possible counterfeit shipments
  • Reviewing suspected high-risk customers through further validation processes and documenting the outcome of this review with reasons provided for the decision
  • Pre and Post Booking
  • Directly convey to all customers their policy against the shipment of counterfeit goods

MEASURES TO ENGAGE LANDLORDS IN THE FIGHT AGAINST COUNTERFEIT AND PIRATED GOODS: Best Practices for Landlords, Government and Enforcement Agencies, ICC/BASCAP.

Landlords:

  • Implement due diligence checks to ensure a basic understanding of who tenants are
  • Include lease provision prohibiting activities related to counterfeit and pirated goods; and to evict tenants in the event of IPR crimes
  • Maintain a “No Counterfeit and Pirated Products Policy” for markets
  • Perform periodic inspection of tenants’ shops and stalls for obvious counterfeit and pirated goods
  • Establish co-operative working relationships with brand owners

Governments:

  • Clarify the conditions under which a landlord may be held liable for tenants or other temporary occupants that deal in counterfeit and pirated goods
  • Consider alternative approaches to deter landlords who knowingly rent to tenants that deal in counterfeit and pirated goods

Enforcement Agencies:

  • Conduct regular and sustained enforcement
  • Increase landlord education: explain the benefits of participation in voluntary programs to avoid renting to criminals
  • Look beyond retail seller and markets

TARGETING INTERMEDIARIES

In the above-referenced ICC/BASCAP publication, “Measures to Engage Landlords in the Fight Against Counterfeit and Pirated Goods” it says,

“Landlords are becoming more vulnerable as law enforcement officials, supported by new laws and regulations in some areas, are increasingly targeting owners and landlords that support counterfeiting.

“A recent increase in the number of prosecutions confirms that landlords who are not vigilant about the activities that are taking place in their premises, are becoming victims of counterfeiters and incurring a dramatic increase in costs in damage penalties and legal fees.”

And here are a few quotes from an article published in the World Trademark Review titled, Liability of Intermediaries: The Effective Anti-Counterfeiting Tool, written by Greek IP Attorney Michalis Kosmopoulos on May 24, 2018:

“The most effective approach is to target the infrastructure and means used by counterfeiters to supply their products internationally. In this regard, counterfeiters often act through third parties…” [i.e., self-storage facilities, transportation, financial services, open markets, etc.]

“Such third-party engagement renders the liability of intermediaries a cutting-edge matter in IP law worldwide.”

“Targeting intermediaries is vital for enhancing the effectiveness of an anti-counterfeiting program.”[

FINAL THOUGHTS

In considering the essential obligation of “third-party intermediaries” to do more to stem the tide of counterfeit commerce, we need only to reflect on the staggering projection reported on the ICC/BASCAP website:

“The negative impact of counterfeiting and piracy are projected to drain US$4.2 trillion from the global economy and put 5.4 million legitimate jobs at risk by 2022.”

*I highly recommend you visit the links to the ICC/BASCAP sources referenced in this post to get a complete understanding of the pro-active ways for the maritime and self-storage/landlords industries, and others, to keep fighting the good fight against global counterfeiting.

PREVIOUS IP-PI BLOG POSTS ON THIS TOPIC:

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Ron Alvarez is an IP Investigations / Protection writer and licensed private investigator in New York City. He is a former NYPD lieutenant where he investigated robbery, narcotics, internal affairs, and fine art theft cases. Ron is a graduate of the FBI National Academy and earned a B.A. in Government and Public Administration from John Jay College of Criminal Justice in Manhattan. He has published a number of articles on various investigative topics for PI Magazine. Ron is certified by the Interpol-International IP Crime Investigators College (IIPCIC.) as a "Transnational and Organized Crime Intellectual Property (IP) Investigator."

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