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updated 5/25/2004 4:24:32 PM ET 2004-05-25T20:24:32

The head of Interpol on Tuesday issued a warning to governments to help fight counterfeit goods, which is estimated to yield more than $900 billion a year for criminal organizations. 

At the opening of a global congress on combating counterfeiting in Brussels, Ronald Noble, secretary-general of the international police organization, said that counterfeiting was, at best, "on the radar screen of a few countries". 

He added: "What I find absolutely amazing is that this is a multi-billion dollar problem that affects the safety of people, the security of governments, that is connected to organized crime, drug trafficking and terrorism . . . and nobody pressures me to say what I'm doing about this problem. There is no pressure to produce results." 

Mr. Noble's complaint was echoed by other participants. Michel Danet, secretary-general of the World Customs Organization, said that "we don't have a mandate" to stop counterfeiting. "We have a patchwork, which has holes in it." 

The sounding of alarm bells also comes amid signs that counterfeiting has become engulfed in the financing of terrorist activities. Mr. Noble said it was difficult to establish the scale of terror groups' involvement in counterfeiting, but he suggested it covered goods ranging from car parts to compact discs. As an example, he cited the discovery of €1 million ($1.2 million, £670,000) worth of counterfeit brake pads and shock absorbers in Lebanon last October. Interpol established that revenues from these vehicle parts had been earmarked for members of Hizbollah. 

Mr. Noble indicated that counterfeiting could prove a particularly attractive source of financing for terrorists because it was "a low-risk, high-profit crime area" under less scrutiny by police than other activities such as drugs trafficking. 

Still, seizures of counterfeit goods have climbed, suggesting either that police have become more efficient or that the illegal trade is booming. U.S. customs reported a 12 percent increase in counterfeit seizures last year while EU customs found 50 million counterfeit or pirated articles in the first half of 2003, compared with 85 million articles during the whole of 2002. 

While participants suggested that organizing such a congress was a breakthrough in itself, they offered few clues as to what solutions it might bring. 

A first step could be the development of a database, under the auspices of Interpol, to help fill the lack of reliable statistics for counterfeiting, which is estimated to affect more than 6 percent of world trade. 

According to the World Health Organization, counterfeit drugs account for about 10 percent of pharmaceuticals worldwide. 

Meanwhile, clothing and footwear companies lose €7.5 billion a year to counterfeiting in Europe, according to the World Customs Organization. 

Yet while companies are the main victims of counterfeiting, they are often reluctant to disclose such facts. 

Rita Hayes, deputy director general of the World Intellectual Property Organization, said: "The private sector has to let us know exactly what we're looking for. How do you get governments to pay attention if you don't have good statistics?"

© The Financial Times Ltd 2010. "FT" and "Financial Times" are trademarks of the Financial Times.

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