INTA Organizes Anticounterfeiting Policy Dialogue in Mexico

Published: March 31, 2021


Leslie Flores Arochi & Lindner Mexico City, Mexico INTA Bulletins—Latin America Subcommittee

The Association organized a public policy dialogue on counterfeiting in Mexico, drawing on a recent report on supply and government actions that was issued jointly by third-party Mexican and U.S. private sector groups. The event called attention to the need for counterfeiting to be taken more seriously as a crime in Mexico.

Participants in the March 11 webcast included Roberto Arochi, founder and managing partner at Arochi & Lindner, Mexico City, Mexico; Eduardo Perez-Mota, economist and psychologist; and Francisco Rivas, director general of the National Citizen Observatory of Security, Justice and Legality (ONC).

The speakers discussed the findings of the study released in July 2020 by the ONC and the American Chamber of Commerce of Mexico entitled Counterfeiting in Mexico: Diagnosis of supply and institutional actions.

The public policy dialogue is part of INTA’s ongoing efforts to strengthen anticounterfeiting measures in Mexico and was intended to set the stage to analyze the anticounterfeiting regime in Mexico, such as the size and scope of the problem. Follow-up events will include analysis on how to improve the current anticounterfeiting regime.

Mr. Rivas outlined the objective, methodology, main findings, and conclusions of the study. The analysis aimed to understand “where the counterfeiting supply is, and the institutions’ capacity to tackle it.” This set it apart from previous studies, which have been focused solely on consumer habits and the acceptance of counterfeiting on the social level.

Mr. Rivas showed a video created by the ONC to help inform society about the risks of piracy, considering that it is often harder for an average citizen to identify the negative and deep effects of counterfeiting.

Among the main findings of the study was the determination that in Mexico, counterfeiting has become entrenched as an illegal activity with high profits and low risks. It also found that it tends not to be a priority for federal prosecutors, whose workload makes them prioritize the higher profile cases.

According to the ONC, the existence and acceptance of 19 notorious markets dedicated to trade in counterfeit goods, plus availability via e-commerce, means that it is now easier than ever to acquire counterfeit products in Mexico. The study implies that such a consolidation “necessarily required the participation of guilds or merchants’ organizations and of the collusion of local authorities,” it said.

It is difficult for brand owners to enforce their rights in Mexico due to the duration and high cost of proceedings, and the risks involved in conducting raids and seizures. In addition, the ONC detected that these obstacles have increased under the present administration due to the significant weakening of the institutions responsible for the pursuit of counterfeiting activities, which has resulted in fewer actions to fight this crime.

Mr. Rivas noted that the study found that political figures and local authorities have been negotiating with guilds and merchants to allow informal or illegal businesses to continue in exchange for their votes for many years. Therefore, “a government that fights counterfeiting is, in many cases, fighting their own voters.”

Mr. Perez-Mota said the study made clear that counterfeiting is not considered a serious crime in Mexico. It is deeply associated with informality and many consider that “it helps to solve unemployment problems.” This is “a fallacious argument on the economic and social sphere, and which may also in part explain the low actions and interest to tackle it by this administration,” he said.

In Mr. Perez-Mota’s opinion, allowing informal and counterfeiting activities “undermines production chains and the capability to create formal jobs,” drastically reducing the collection of taxes that otherwise would help to promote health, education, and security. Counterfeiting causes significant loss of intangible assets, such as research and development, which normally are not visible until you see the final product. Additionally, allowing these illegal activities tends to reduce trust in the economy and, therefore, investment.

The health crisis that Mexico is currently facing makes clear the importance of allowing and promoting research and development activities along with proper observance of intellectual property rights, Mr. Perez-Mota said. Otherwise, the world would not have experienced the unprecedented development of the fastest vaccines to market so far.

“If we erode the incentives to invest in research and development,” he said, “we reduce the capacity to solve problems of global interest.”

In addition to hosting this event, INTA is currently working with various stakeholders, including other associations and government agencies, to fight counterfeiting in Mexico as well as elsewhere in the world.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. 

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