The U.S. Senate passed an act Feb. 15 that makes trafficking in counterfeit labels or packaging a crime. The Stop Counterfeiting in Manufactured Goods Act, co-sponsored by Sen. Jack Reed (D-RI), would tighten enforcement and penalties to deter counterfeiting.
Reed co-sponsored the bill because counterfeiting manufactured goods is a threat to legitimate business and consumer safety, said Regan Lachapelle, spokeswoman for Reed. The bill applies criminal penalties to people who intentionally traffic, or attempt to traffic, in counterfeit labels or packaging.
South County Art Association Enhances Its Space and Saves Energy
Energy efficiency improvements can help small businesses and nonprofit organizations reduce energy use while enhancing…
Learn More
“We’re very encouraged by it,” said John Grady, executive director of the Rhode Island Manufacturers Association, which has been working with Reed’s office regarding the legislation. “It’s a step in the right direction.”
Many Rhode Island companies manufacturing in China lose business as a result of counterfeit goods made there, Grady said.
“They are coming back to the U.S. in droves,” he said, adding counterfeit products range from automotive parts and tools to purses and toys.
The counterfeit products bear the name of legitimate manufacturers and are usually not the same quality, thus resulting in the loss of customers, Grady said.
“It’s a huge problem,” said Richard Kelly, president of Warwick-based Jay Packaging Group. “It indirectly affects us all.”
Jay Packaging provides packaging to customers such as Procter & Gamble, Gillette, L’Oreal and Maybelline, Kelly said. The company supports its customers in fighting counterfeit products by manufacturing holographic symbols, which distinguish the legitimate products from the fakes.
The U.S. Department of Homeland Security reported seizures of counterfeit branded goods valued at $38 million in 2003, up 42 percent from 2002. The International Anti-counterfeiting Coalition estimates that counterfeiting results in more than $200 billion in lost jobs, sales and taxes per year.
The top five offending countries are China, Hong Kong, Mexico, South Korea and Malaysia.
Cheryl Merchant, of Hope Global, said China’s reputation for manufacturing counterfeit goods is one reason the Cumberland-based company is leery of branching into China. The company manufactures engineered textile components, such a shoe laces, parachutes and apparel for the U.S. military and U.S. Postal Service.
“By extending criminal liability to those that manufacture and intentionally traffic goods and services, this bill will help protect our economy and the innovations of American entrepreneurs and manufacturers,” Reed said in a press release.
The act will go to the U.S. House of Representatives for consideration.
