Counterfeit claims not based on specific evidence: Commerce tells US State Dept

There was no evidence nor any factual basis to the allegations of exporting counterfeit clothes made against Bangladesh by two associations, claims that had prompted the US State Department to begin a special review against the country, the commerce ministry has said. 

In a letter sent to the United State Trade Representatives (USTR) on 24 February, the ministry said the allegation that it "remains impossible to conduct any form of IP enforcement in Bangladesh", was a "sweeping remark" given the slew of laws, rules and policies made to ensure Intellectual Property Rights in the country.

The ministry in its letter said Bangladesh did not appear even in the top-25 list of provenance economies of counterfeit goods in the OECD study that put the USA at the sixth place. 

The American Apparel and Footwear Association (AAFA) claimed that the Organisation for Economic Cooperation and Development (OECD) report had ranked Bangladesh as one of the top five provenance economies for exporting counterfeit clothing, after China, Turkey, Hong Kong, and Vietnam.

The ministry letter said the OECD report only identified Bangladesh as provenance economies with "propensity to export counterfeit products".  

"The report also mentioned that 90% of global seizure of counterfeit products came from five specific countries where Bangladesh does not feature," it explained.

The ministry wrote the letter in response to a special review initiated by USTR on intellectual property right protection in Bangladesh following complaints of counterfeiting against Bangladesh-made clothes.

Quotas, sanctions and additional duties are all on the table if the allegations are proven to be true.

The USTR review, termed as the Special 301 Review on IPR Protection and Enforcement, was prompted by complaints made by the American Apparel and Footwear Association (AAFA), an influential organisation of American brands, and the Paris-based Union des Fabricants (UNIFAB), which promotes international protection of intellectual property fighting against counterfeiting.

"We strongly urge the USTR to consider those submissions in the right perspective, especially in light of its own recent acknowledgement of the progress made in Bangladesh with regard to IP protection," added the letter signed by Md Hafizur Rahman, additional secretary (PRL), WTO Wing, Ministry of Commerce.

It concluded that the possible inclusion of Bangladesh under Section 301 for Special Review would be "unjustified and detrimental to the country's efforts to combat IP [intellectual property] rights violations and promote the growth and development of its industries." 

On the AAFA's allegation that counterfeits from Bangladesh are being seized at an increasing rate globally, the ministry said the claim, made by 'one member', seemed "somewhat a sweeping remark" and not to be supported by any specific evidence

It mentioned the existing laws and rules to protect IPR and  highlighted the remedial acts in case of any violation. 

The AAFA, in its letter dated 30 January 2023, claimed that the European Union Intellectual Property Office named Bangladesh as the third biggest source of counterfeit clothing. 

In response to this, Bangladesh said the report on the EU Customs Enforcement of Intellectual Property Rights Results at the EU border, 2019 mentioned by the AAFA did not identify Bangladesh as a major source of counterfeit clothing products. 

Bangladesh was, instead, mentioned for pirated CDs and DVDs, even though Bangladesh is "hardly a significant exporter of CDs and DVDs." 

"The report mentioned Bangladesh in terms of clothing for a very insignificant percentage of seized clothing products.  The products in question were seized by certain customs authorities, but without any further clarification or proof as to whether the seized products were counterfeit or not," the letter said.

The AAFA claimed that the Rapid Action Battalion (RAB) and the Bangladesh Police Criminal Investigation Department (CID) did not prioritise IP enforcement action and suffered from corruption. On the issue, the letter said those are not the only authority responsible for enforcing IPR. 

Terming the claim as conjectural, the ministry said, "AAFA did not give any concrete proof or name any producer in Bangladesh who would be responsible for such counterfeiting…The IPR Enforcement (Import-Export) Rules, 2019 gives full power to the customs authority to seize counterfeit products, either suo moto or based on information from the rights holder."

"All the law enforcing agencies as well as the Bangladesh Customs, Bangladesh Standard Testing Institution (BSTI), and Consumer Rights Authority can work on IPR protection and enforcement…Any sweeping remarks about alleged corruption by the responsible entities, without citing any specific instance or allegation, appears to be made on the basis of hearsay and with certain ulterior motives."

The letter also said that rights holders of trademarks must file notices or applications to the customs commissioner concerned when trademarks are infringed. Based on these applications, a legal process can be initiated. 

"Only very recently on 3 January 2023 a rights holder named H&M has submitted a notice to the Commissioner of Custom House, Chattogram, claiming that H&M trademarks are being infringed by some exporters while exporting clothing items under the brand name of M&H, which - according to the claim - is using similar descriptive trademarks of H&M. This claim is now under the examination of Custom House, Chattogram and the issue will be duly addressed on the basis of relevant legal provisions."

It said Bangladesh customs was taking action against import of counterfeit products by importers violating domestic legal provisions as well. 

The AAFA claimed that "the group found Bangladeshi sellers using social media and e-commerce platforms including Facebook, LinkedIn, WhatsApp, Lazada, Shopee, and others to sell wholesale counterfeit goods globally."

But Bangladesh, in its letter, pointed out that none of the Bangladeshi online platforms has cross-border business, while Shopee and Lazada were not even Bangladeshi platforms. 

"Bangladesh has a very robust guideline titled "Digital Commerce Operation Guidelines 2021" where display, sale or purchase of fake or counterfeit products is fully prohibited. This is applicable for social media as well," it reiterated, saying its jurisdiction to enforce this law ended at its borders.  

The UNIFAB had claimed in its 26 January letter that Bangladesh "also seems to become a growing actor involved in the production of counterfeit apparel…more and more counterfeit apparel items seized, among others, in Europe, UK, Saudi Arabia, UAE, the Philippines and other South-East Asian countries are directly exported from Bangladesh."

In response to this, Bangladesh said its producers were loyal to brand owners and remained vigilant to protect the rights of the buyers.

"It is not always true that all the clothing products are directly exported from Bangladesh. Products may go through a third country, and attaching counterfeit tags is possible in those countries too," it said, adding that the claim appeared to be an assumption," said the letter.