Counterfeit Seizures Up but Value Down in ’10

Footwear ranks first, apparel third in value of goods seized.

WASHINGTON — As the federal government ramps up scrutiny of counterfeiters, a report revealed Wednesday that footwear, apparel and accessories were among the top 10 counterfeit items seized by U.S. officials during fiscal 2010.

This story first appeared in the March 17, 2011 issue of WWD.  Subscribe Today.

For the fifth year in a row, footwear was the top commodity seized by federal officials, accounting for 24 percent of a total of 19,959 seizures valued at $188.1 million in the year ended Sept. 30, according to the joint report released by U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement. The total volume of counterfeit seizures rose 34 percent in the last fiscal year while their value fell 27 percent from $260.6 million in fiscal 2009.

Customs and ICE officials seized $45.7 million worth of bogus footwear in the fiscal year. Counterfeit consumer electronics seizures came in second, with a value of $33.6 million, accounting for 18 percent of the total.

Customs and ICE officials seized $18.6 million worth of counterfeit apparel, giving it a ranking of third and representing 10 percent of the total value of seizures. Seizures of fake handbags, wallets and backpacks totaled $15.4 million, representing another 8 percent of the total, ranking it fourth, while, ranking ninth, seizures of jewelry were $6.7 million and accounted for 4 percent of the total.

Calling 2010 “a very successful year,” ICE director John T. Morton said, “The protection of intellectual property is a top priority for Homeland Security Investigations, as counterfeit products represent a triple threat by delivering shoddy and sometimes dangerous goods into commerce, by funding organized criminal activities and by denying Americans good-paying jobs.”

The disparity between the number and value of seizures was attributed to a shift toward high-volume, low-value express consignment and mail seizures and consolidated shipment seizures.

China maintained its status as the number-one source of counterfeit products and pirated goods seized, accounting for 66 percent, or $124.6 million, of the total domestic value of seizures. The number of seizures from China rose 18 percent in the fiscal year to 12,200.

While the majority of counterfeit apparel, footwear, handbags and accessories seized came from China, Hong Kong was responsible for $26 million in counterfeits, with watches accounting for 18 percent of the country’s total; handbags, wallets and backpacks representing 16 percent; jewelry, 13 percent, and apparel 4 percent.

Bogus apparel seizures accounted for 2 percent of India’s total of $1.5 million, while fake footwear represented 92 percent of counterfeit seizures from Malaysia, which totaled $1.3 million.

Brands have spent millions of dollars on their own to combat counterfeiting and were left largely on their own in the past to go after fake goods through civil enforcement actions. But companies that have worked with ICE and the interagency Intellectual Property Rights Coordination Center that it manages said there is now a new level of commitment from federal authorities, as seen in a coordinated crackdown in Los Angeles last September that resulted in 30 arrests and the seizure of millions of dollars of fake luxury goods.