The UAE – a Hub of Chinese Counterfeiting

Chinese counterfeiters act in an increasingly global context. Due to the massive prosecution in China, they relocate their production sites to neighboring countries such as Myanmar, distribute their fakes worldwide via the Internet, and use complicated logistics routes so that their consignments cannot be easily tracked by the authorities in the recipient countries.

The free trade zones of large trading cities, such as Hong Kong, Singapore and Dubai, play an outstanding role in this process. They are often transshipment points for counterfeit products. In the free-trade zones, the goods in transit are usually not controlled at all or only inadequately managed because the authorities are hardly interested in the freight. Only those products which come to the domestic market are usually inspected.

One of the famous hubs is, for example, the Jafza Zone in the United Arab Emirates. Jafza is a free trade zone, which offers lucrative business opportunities as well as good production and trading possibilities due to low taxes and limited legal requirements. In general, the number of free-trade zones has risen sharply in the last few years, which plays into the hands of traders, but also into the hands of counterfeiters. The advantage of such zones for the counterfeiters is that, on the one hand, the goods can be covertly distributed. On the other hand, the incoming products and distribution can be very easily manipulated due to inadequate regulations and controls within the zones.

According to analyses by OECD and EUIPO, the UAE, together with Saudi Arabia and Yemen, is the world’s largest transshipment point for food products. Counterfeit pharmaceutical products are sent from the Emirates to Qatar and West Africa, shipping to Africa is usually carried out by ship or plane. The fake drugs, cancer drugs or painkillers that mostly originate from China and India, are partly useless and sometimes even contain dangerous, toxic substances and bacteria.

Perfume and cosmetics find their way from the UAE to Southeast Europe (Albania), Kuwait and Africa. In Africa, the main customers are Angola, the Ivory Coast, Senegal, Gabon, Ghana, Guinea, Djibouti, Libya and Morocco. Clothes and textiles are shipped from the Emirates not only to Africa, but also to Europe. Fake electronics products for the African market go out from Hong Kong to the UAE, where the most important destinations are the Ivory Coast, Congo, Guinea and Somalia.

The emirates also play a vital role in the opposite direction. For example, high-quality counterfeit products of optics, photography and medical technology are often delivered from Southeast Asia via the UAE to Saudi Arabia.

The trend is generally towards packets with smaller product quantities, which are sent by mail or ship. As a result, the loss caused by seizures can be minimized. The prosecution of global counterfeiting reacts with the internationalization of activities and cross-border law enforcement. The investigators covertly identify the sender of counterfeit products in the free-trade zones, in order to be able to take legal action against counterfeiters in the countries of origin. The strategy is always to eliminate the counterfeiting at the source – close down the factory.

Source: OECD / EUIPO

Picture: The National

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