By  on November 23, 2005

WASHINGTON — Congress is confronting counterfeiting head-on at a time when bogus footwear and apparel are costing U.S. companies billions of dollars in lost sales a year.

The Senate unanimously passed a bill on Nov. 10 that would increase criminal counterfeit penalties and require the forfeiture of the equipment used to make the items.

The Stop Counterfeiting in Manufactured Goods Act, a similar version of which was passed by the House earlier this year, would require the mandatory destruction of equipment used to manufacture and package counterfeit goods and "close a loophole" that allowed people selling counterfeit labels to escape criminal penalties.

The bill, sponsored by Sens. Arlen Specter (R., Pa.) and Patrick Leahy (D., Vt.), criminalizes the trafficking in counterfeit labels regardless of whether the bogus labels, hang tags, medallions or packaging are attached to the counterfeit product. Counterfeit goods distributors have attempted to circumvent current laws by importing goods and counterfeit labels separately, then affixing the labels to generic goods, creating a counterfeit.

Proponents of the legislation, including the American Apparel & Footwear Association, are hopeful the House and Senate can work out differences in legislation without convening a conference committee to get the bill to the President's desk for a signature before Congress adjourns for the year.

"In both cases, it's a no-brainer issue," said Stephen Lamar, senior vice president at AAFA. "The bill passed each chamber on bipartisan leadership and I don't see a vote of dissent."

In a study released earlier this year, the U.S. Chamber of Commerce said that, based on estimates by the Federal Bureau of Investigation, Interpol and the World Customs Council, counterfeit goods cost U.S. companies $200 billion to $250 billion annually. On a global basis, piracy and counterfeiting costs the world economy an estimated $600 billion a year in lost sales, according to the Paris-based International Chamber of Commerce.

Apparel, footwear and accessories represented nearly 40 percent of all seizures made by the Department of Homeland Security in fiscal year 2005.

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