A Unique Approach to Counterfeiting
Published: August 2, 2022
In 2008, Chile’s Policía de Investigaciones (PDI)—or Chilean Investigations Police—created a dedicated team within the police force to investigate intellectual property (IP) crimes. Implementing penalties that are harsh enough to deter repeat offenders is a key tool in its work.
In an interview with the INTA Bulletin, Deputy Prefect Cristian Ramírez Valenzuela, Chief of the Intellectual Property Crimes Investigation Brigade of the PDI (Bridepi) talks about the unit, how it investigates suspected offenses, and the results it has achieved so far.
Tell us more about Bridepi’s work and how it functions as part of the Chilean Investigations Police.
This unit was created on January 9, 2008, at the time of a great national and international consensus about the damage caused by IP crime and, for example, its impact on public health and the economy. These were some of the decisions or factors that led to the creation of this unit. It also exists to control piracy and to dismantle criminal organizations dedicated to this scourge. The unit focuses fundamentally on the investigation of IP and industrial property crimes, smuggling, and the enforcement of some other special laws.
Our investigative process has been modified because of the pandemic when the number of investigations dropped significantly because commerce in general remained closed for reasons that we know. After that, there was an overhaul because it seems, at least in our country, informal commerce and distribution chains of different pirated or counterfeit goods increased dramatically. For this reason, when I took over the leadership of this unit, we agreed with the criminal prosecution body on a standard of evidence in the first instance.
Having this legal basis was useful for the prosecutor to be able to request some intrusive measures, and we precisely defined that standard of proof as the first diligence to be carried out when we receive complaints or initiate investigative processes. So, when trademark owners present us with a complaint due to seizures of counterfeit merchandise, by the National Customs Service for example, we take a sample of the counterfeit item. We ask for an original from the trademark owner. We then send the background of the dubious and indubitable evidence to our laboratory so that, in the first instance, the counterfeit could be confirmed. At the same time, an analysis of the background information is carried out.
Our investigation process aims to reach, if not the supplier, then at least the importer of the counterfeit products. As a result, a large number of recent investigations included notable quantities of seized products.
[W]hen I took over the leadership of this unit, we agreed with the criminal prosecution body on a standard of evidence in the first instance.
It is an innovative and uncommon measure in Latin America to have a police unit dedicated to investigating this type of crime. How many police personnel work in Bridepi?
First of all, we have national jurisdiction. That is to say, we can act in investigations from Arica (in the north) to Punta Arenas (in the south). In Santiago, we have 24 investigating officers exclusively dedicated to investigating this type of crime. However, all 16 regions have economic crime brigades who also carry out this type of investigation in coordination with Bridepi. We are the technical entity, and, through the National Headquarters of Economic Crimes and Environment, we issue guidelines or technical instructions related to the investigation of these types of crimes. Then, speaking practically, if we determine, for example, that the city of Arica or the city of Iquique, the free trade zone, is receiving some counterfeit merchandise, we coordinate quickly with the Economic Crimes Brigade of the region or even the Port Crimes Investigation Brigade that we have in the cities of Iquique and Valparaiso, and they carry out the necessary technical coordination and go ahead with the seizure process, if necessary.
What are Bridepi’s strategic objectives?
Law 21.426 on illegal commerce was enacted in February 2022. I speak of this as a strategic objective as we have to implement the new tasks and tools that this new law provides us to investigate illicit trade. This law gives the police some other legal tools to carry out certain types of investigations, such as undercover deliveries, which for us is something new, even though IP crimes are base crimes for laundering. Our country does not grant the power to carry out controlled deliveries, which obviously have to be authorized by the prosecutor in charge of the case and coordinated with the National Customs Service. But we also have to establish the illicit association, and to do that we have to go much deeper into the investigation. For this reason, it is a strategic objective to reinforce all the investigative processes related to this type of crime, to be able to, in the first instance, establish the illicit association in all our investigations.
Moreover, due to the large number of financial resources used in these crimes, it is expected, as an important objective, let us say, to carry out patrimonial investigations to identify the criminal organizations involved and determine their illicit association. This is also necessary to guide the investigations and to try to establish money laundering as a base crime. It has been very difficult with this type of crime to establish money laundering. Consequently, it is critical for us to be able to establish these legal figures so that we can, through information and patrimonial investigations, establish the role of money laundering in this type of crime.
The penalties are low, the profits are high, and the offender makes only a low investment.
What are the biggest obstacles you face in achieving these strategic objectives?
It is interesting to see the cases of recidivism for this crime, which are related to low penalties—generally monetary sanctions—for infringement in the Industrial Intellectual Property Law. This includes smuggling. This leads to criminals resuming their illicit activities in the short term as penalties are not a deterrent. Counterfeiting remains lucrative for them.
I understand that the amendment to the Industrial Property Law (Law No. 21.355), which entered into force on May 4, 2022, emphasizes trademark counterfeiting as a crime. For the first time, penalties include imprisonment. Do you think this deterrent is sufficiently serious?
Yes, indeed. We have to see how this is reflected in the procedures that we and the other police can carry out and the results from that. But this modification is a clear sign given by the Chilean authorities that, let us say, can at least mitigate the recidivism involved in counterfeiting and minimize the motivation of the perpetrators of these crimes.
You also pointed out that the penalties are low and that that may be a part of the equation for counterfeiters.
That is true. The penalties are low, the profits are high, and the offender makes only a low investment. If he is charged with a criminal sanction, he is fined and quickly resumes his illicit business. That is why recidivism in this crime is important. It is, as you said, the perfect equation: a profitable business with low penalties.
In Chile, purchasers of counterfeit products are very rarely fined; therefore, we try to educate our consumers about all the dangers it entails.
Recently, Bridepi seized more than 123,000 counterfeit printed books, which is perhaps strange in this Digital Age as many people now read digital books. It was also reported that seizures were made in established commercial stores as well as warehouses. What do you think was the motivation in this particular case, and why would an established business sell counterfeit books and original books?
The way books are obtained has changed a lot, especially since the height of the pandemic, where practically 90 percent [of book sales] were made online. However, there still remains high demand for printed books. Many people still prefer physical books. Among the seized counterfeit books were novels, best sellers, and the complementary reading books for schools. There are large sales of these books, which explains the great demand for counterfeit books.
We were very impressed by the quality of the books. The printing and the covers are essential for us to be able to identify counterfeit books. The investment in the process of printing, binding, and finally the cover, is clearly much cheaper than buying the book from the publisher, where, for example, the printing and binding costs, and the taxes, are much higher. So, we have two situations merging: high demand, especially in the month of March (when the seizures took place) with the start of the new academic year, and the low costs associated with producing the counterfeit books. March is the month when students at schools and universities start their academic year.
Do Chilean consumers understand the implications of buying counterfeit products—that it supports organized crime, and that fake goods are dangerous and can affect one’s health?
In Chile, purchasers of counterfeit products are very rarely fined; therefore, we try to educate our consumers about all the dangers it entails. There is also the economic problem: We show that the state stops receiving taxes because of the sale of counterfeit products and that this is detrimental to the actions that the state can carry out.
From your many years of experience working on the police force and on investigations, what are the most common forms of intellectual and industrial property infringement in Chile?
In this last period in general it has been the counterfeiting of clothing, sneakers, and also many cellphone-related electronic items. These items have attracted a lot of our attention. A large quantity has been seized and there is a large quantity on the market.
With whom within the Chilean government does the IP community work most closely? How and in what capacity does this collaboration take place?
The truth is that the prosecution of IP crime is a multidisciplinary and interinstitutional task. It is fundamental that the public and private sectors work closely to combat this crime. In general, the police, the Public Prosecutor’s Office, the National Customs Service, and the Internal Revenue Service, which also oversees [the prosecution of this] crime, participate in this work. In the private sector, we have closed meetings with The National Chamber of Commerce, for example. The objective is to establish different policies and strategies to mitigate the crime. This public-private relationship is relevant in order to achieve and establish the best strategies to prosecute IP crime effectively.
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.
© 2022 International Trademark Association
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