The East African Business Council (EABC) in
collaboration with Kenya Association of Manufacturers (KAM) and the Kenya
government are organising the high-level second Regional Anti-Illicit Trade
Conference in Nairobi, Kenya, on September 15-16, this year.
The
EABC in partnership with the EAC and the government of Kenya held the first
regional Anti-Illicit Trade Conference in October 2010, where a number of
recommendations were made.
“Although
progress has been made in several areas since; a lot more still ought to be
done to win the fight against illicit trade,” the EABC Chief Executive Officer, Ms Lillian Awinja, says.
Illicit trade includes, but is not limited
to intellectual property infringements and trade in substandard goods that pose
or cause health or safety risks, parallel imports and undeclared local
production, smuggling of excisable goods and a variety of illicit financial
flows.
“Evaluation of illicit trade and its effects
is challenging, as such trade operates outside of the law, making it hard to
access data on it,” says Ms Awinja, adding:
“What is certain, however, is that illicit
trade is driven by the economic opportunity it offers vendors to make money
illegitimately in an environment wherein opportunity for economic benefit is
perceived to outweigh the actual risks involved.”
The Organisation for Economic Co-operation
and Development (OECD) estimates that EAC governments lose over $500 million in
tax revenue annually due to the influx of counterfeit and pirated products.
Much as the figure does not encompass
several other forms of illicit trade, the total tax revenue losses from illicit
trade exceed the amount.
Uganda is said to lose $1.4 billion,
equivalent to almost 5.5 per cent of its gross domestic product (GDP).
Tanzania is, in turn, estimated to lose
about $1.5 billion in revenue to counterfeits; while KAM estimates a loss of
over $500 million annually to illicit trade and its estimated government loses of
more than $350 million.
A KAM study on counterfeits conducted in
2012 with a key focus on five most affected manufacturing sectors established
that manufacturers were losing about 40 per cent of their market share to
counterfeiters.
Counterfeiting and other forms of illicit
trade undermine investment, research and innovation; reduce profitability and
market share for legitimate operators and create an un-level playing field.
There have been serious negative impacts on the viability of industries, jobs
and tax revenues across the region.
Counterfeited and sub-standard products
supplied by unscrupulous local and foreign traders and manufacturers illegally
replicate well-known brand names and designs on their packages and labels.
The most affected sectors include
pharmaceuticals, tobacco, fast moving consumable goods (FMCGs), including soap
and detergents, food products, alcoholic beverages, dry cell batteries, pens,
cosmetics, electrical and electronic equipment; vehicle spare parts, seeds and
fertilizers, apparel and software.
In the pharmaceutical industry, illicit and
counterfeit or pirated products are produced without the quality and safety
checks usually imposed by national bureaus of standards and by the brand
proprietors.
The World Health Organization (WHO) estimates
that counterfeit drugs with wrong ingredients; incorrect amounts of the proper
ingredients or no active ingredients whatsoever account for 10 per cent of all
pharmaceutical products sold in the world, and up to 60 per cent of all drugs
sold in the developing countries.
The serious risks the use of counterfeit
medicines poses to public health and safety have often resulted in accidents
and death in some instances.
It is against the above background that the
EABC will organise the two-day high-level platform that will bring together the
private sector from the region, international business community, key policy
makers, business facilitators and other stakeholders affected by illicit trade
in the region.
The conference will, among other things,
focus on counterfeit, piracy and other forms of intellectual property
infringement, smuggling, substandard goods, transit fraud and dumping and trade
in prohibited goods and products.
Amongst the issues to be discussed are the status of the regional and national
regulatory frameworks for combating various forms of illicit trade and what
needs to be done to put in place or strengthen these frameworks; how to achieve
effective enforcement, including the need for inter-agency cooperation at
national and regional level; what the various factors that contribute to
illicit trade are, and how best to address them and how to enhance information
exchange, including educating the public.
The broad objective of the conference will
be to come up with proposed policy reforms and key recommendations for
prioritised and expedited implementation.
Key sectors affected by counterfeits and
other forms of illicit trade will have an opportunity for discussing how their
businesses are impacted and what solutions they propose.
Local and international companies that offer
solutions to the problem of counterfeits and illicit trade will also have an
opportunity for presenting their solutions.
The target audience will include leading
businesses from the EAC partner states, especially those affected by the
problem of illicit trade -- in order to obtain the private sector perspective
on the impact of illicit trade; key EAC policy makers from the ministries of
trade, finance, health, industrialisation, security, enforcement and prosecution
agencies, revenue authorities and standards bureaus, among other relevant
stakeholders.
International participants will also be
invited from leading regional and international organisations; such as World
Customs Union (WCO), International Chamber of Commerce (ICC’s) Business Action
to Stop Counterfeiting and Piracy (BASCAP) which aims to unite the global
business community across all product sectors in an effort to work against
product counterfeiting and copyright piracy, as well as technology-based
solution providers that provide software to detect counterfeits.
The two-day programme will include a key
note presentation during the opening session on the impact of illicit trade on
EAC businesses, government revenue and consumers; a key note address and
official opening by a high profile guest and roundtable with the key policy
makers from EAC partner states.
Also in the programme will be discussion on
the status of country and regional legislative and institutional frameworks for
addressing various types of illicit trade and case studies from the business
community highlighting the scope and impact of various forms of counterfeits
and proposed solutions.
There will also be presentations of key
products and services that offer solutions to the problems posed by illicit
trade and key recommendations of the conference.
The EABC and KAM will take forward the
recommendations by drawing up an implementation plan that indicates clear
responsibilities and a monitoring and evaluation plan.
Notes
to editors
In October 2010, the EABC, in partnership
with the EAC Secretariat and the government of Kenya held the first regional
Anti-Illicit Trade Conference. Amongst the key recommendations from the conference
were the following:
§ There was a need to expedite harmonisation
of the legal regimes related to intellectual property rights (IPR) and the
legislation regimes, including patents, copyrights, trademarks and industrial
designs;
§ At national and regional level, enforcement
mechanisms should put in place and where existing, their enforcement capacity
should be enhanced. This should also include the establishment of a regional
enforcement committee;
§ Punitive laws should be put in place to
deter the practice of trading in counterfeit products and other forms of
illicit trade, including repossessing property / revenue gained from such
practices;
§ A database of IP rights across the region
should be published to ease trading across the region; and,
§ The business community should have a code
of conduct at the regional level that promotes ethical behaviour and punishes /
deters illicit trade.
Since then, there have been several notable
areas of progress in the fight against illicit trade. Key among these include
the adoption of EAC Anti-Counterfeit Bill, 2013, by the Council of Ministers;
the full operationalisation of the Anti-Counterfeit Agency in Kenya; enactment
of the Consumer Protection Act in Kenya in 2012 (though this has not been
passed into law to date); formulation of the Anti-Counterfeiting Goods Bill of
2015 in Uganda which has undergone parliamentary discussion and the formulation
of the Competition and Consumer Protection Bill in Rwanda.
Other areas of progress include the launch
of the EABC Regional Code of Conduct, which was endorsed by the EAC Heads of
States and key businesses in March 2016.
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