Regional Anti-Illicit Trade Conference on 15 –16 September 2016


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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