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China and Russia produce most counterfeit goods

China and Russia produce the bulk of the world's counterfeit goods, cheating consumers and posing a potential health hazard as well, the International Chamber of Commerce said.

International companies are losing more than $60 billion a year because of piracy in China, the US government has said. The US and European Union agreed last June to crack down on fake goods such as medicines, perfume and pirated software by coordinating information and working more closely with industry. „At risk is every sector of our economy where creativity, innovation and invention drive the creation of economic value and of high-wage jobs,” NBC Universal Inc. CEO Bob Wright said in a statement today. The Paris-based Chamber's findings cited a survey of 48 companies including NBC, a unit of General Electric Co., and EMI Group Plc. Counterfeiters, known for churning out $100 „gold”, Rolexes and $50 Hermes handbags, have widened their activities to producing phony versions of everyday goods such as Nescafe instant coffee, Coca-Cola and toothpaste. The value of seized fake food, drinks, and alcohol climbed 200% by value in the EU in 2004, compared with a 12% gain for all phonies. India, Brazil and Indonesia were the next worst offenders after China and Russia, the Chamber said. The criteria were countries' „unwillingness” to enforce laws against counterfeit goods and „local media disregard” to the problem.

Criminals now use large, sophisticated factories to produce the faked goods, which often end up on supermarket shelves. Consumers' lack of awareness make it a less risky and more profitable business than luxury counterfeits, said Christophe Zimmermann, head of anti-counterfeiting at the World Customs Organization in Brussels. Coca-Cola Co., Nestle SA, the world's biggest foodmaker, and Anglo-Dutch rival Unilever are among companies spending more to team up with government agencies and border police to try and check the trend as they fight to spur sales growth of their original products. China, the world's fastest-growing major economy, accounts accounted for 64% of imported contraband in 2005, according to the European Commission. Switzerland made up 5% of imports, ahead of the United Arab Emirates, Turkey and Hong Kong, as criminals used the Alpine country for entry into the 27-nation EU. Switzerland, which borders five EU countries and ships two-thirds of its official exports to the bloc, is also suffering from the trade in faked goods, Swiss Justice Minister Christoph Blocher has said. Pirated products cost Swiss companies including Swatch Group AG, the world's biggest watchmaker, up to 2 billion Swiss francs ($1.6 billion) a year, Blocher said, citing a 2005 Swiss study. China has repeatedly promised to improve protection of intellectual property rights. (Bloomberg)