There aren’t many in Cambodia who can lay claim to never having purchased a bootlegged CD or DVD in their time. Counterfeit products have long been an unremarkable element of daily life here. But now, thanks to the growth of Cambodia’s economy and the resulting expansion in the number of products now available on the market that are susceptible to counterfeiting, the extent of the phenomenon has exploded alongside the range of goods being imitated. It is now so severe say officials, that the governments of Cambodia and Thailand took the first public steps in September to jointly address the issue.
And they are not the only ones uniting to reduce the prospects for counterfeiters in Cambodia. In the same month, the Counterfeit Committee of Cambodia (CCCC) and the European Chamber of Commerce, represented by EuroCham Chairman and Thalias CEO Arnaud Darc, signed a memorandum of understanding on Cooperation in the Fight Against the Importation, Production and Distribution of Counterfeit Products into the Kingdom of Cambodia.
The MoU aims to establish a communication strategy in order to raise awareness among consumers, producers and importers about the risks of counterfeit goods, to track down counterfeit goods in the country, to create an information database to assist the CCCC in its work, and to strengthen the rules and regulations protecting rights holders in the kingdom.
At the sharp edge of the problem are pharmaceutical products. A report by the World Health Organisation this year said that Asia accounts for the largest share of counterfeit drugs in the world. A recent report by the United Nations Office on Drugs and Crime (UNODC) says that part of the problem lies in the number of producers based in India and China, both licensed and unlicensed, who have transferred or outsourced some manufacturing processes to Malaysia, Vietnam, Myanmar and Cambodia to avoid tougher regulations and enforcement – and to benefit from lower production costs.
The same UNODC report, which focused on the role of transnational organised crime in Southeast Asia, estimates that up to $2.6 billion is spent on counterfeit medicine in Southeast Asia each year. The agency says that almost half of anti-malarial medicines tested in Southeast Asia were found to be fraudulent. Numerous reports link counterfeit medicines with the growing prevalence of drug-resistant malaria.
More generic (so to speak) counterfeiting of goods such as footwear, clothing, accessories, cosmetics and electronics etc., can be found throughout the markets of Phnom Penh (and across the country). Last month, the World Trademark Review published a breakdown of counterfeiting hotspots in Phnom Penh, identifying the usual suspects that would be a surprise to no one who has spent much time in the city. The report provides an interesting insight into the challenges facing rights-holders, which can extend from locating stock, the narrow passages of Russian Market, the mixing up of real and counterfeit goods, and a lack of awareness and culture of acceptance of counterfeits among stall-holders. The issue is far more complicated than the existence of adequate laws or support for enforcement.
On that front, rights holders continue to be hamstrung by slow enforcement procedures, such as the need to apply to the courts for an injunction, rather than to more accessible administrative authorities.
According to Rouse, a UK Intellectual Property Office (UKIPO: the British Government Agency responsible for intellectual property rights protection in the UK) 2015 report suggests that 50 to 80% of these goods are coming directly from China. This suggests that wider partnerships through ASEAN are necessary in order to develop stronger protections, particularly at borders and customs points.
EuroCham is working to ensure that customs authorities have not just the power but also the information they need to act at this crucial juncture in the counterfeiters’ route to market.