Fake parts, real threat

11 July 2008

Examples of counterfeits detected by X-ray

Counterfeit electronic components are entering the UK market and costing the economy an estimated £1 billion a year, according to a paper from the UKEA.

The UK Electronics Alliance (UKEA), a body of 12 trade associations representing over 13,000 companies, is calling on the government to combat this problem. It hopes to achieve this by increasing the amount of resources put into detection and prevention, introducing tougher penalties for those caught with counterfeit goods, and by fostering greater co-operation between the UK’s trading partners and their customs services.

It is feared that with more counterfeits entering the market, there is an enhanced risk to public safety if parts infiltrate public transport networks or the National Grid.

According to UKEA estimates, the UK has two HM Revenue and Customs (HMRC) officers directly responsible for intercepting counterfeit goods entering the country. The alliance also believes that Britain must follow the lead set by European Parliament and the US Customs Service. It states that more resources must be allocated to the HMRC so that it can effectively enforce legislation already in place.

Indeed, the alliance believes that when counterfeit components are in the country, they can have a number of damaging consequences. Business relationships within the electronics supply chain can be severely damaged by the activities of counterfeiters, whose products often instigate legal disputes between component distributor and manufacturer to recover loss of revenue, profit, jobs and damage to reputation. In order to offer meaningful discouragement, the UKEA is therefore calling on the government to ensure the financial penalties for convicted counterfeiters reflect the significant profit to be made.

Henry Parker, electronics manager from UKEA member association Intellect believes that counterfeiting has had a serious effect on UK electronics manufacturing. “We urgently need to give our manufacturers more protection against the threat. We fully accept that industry has a self-policing role to play, and that combating counterfeiting is very difficult. However, the government must also do all it can to help us,” he said.

In Are your parts the real deal?, Tom Perrett, Marketing Manager for Soldertec, asked if the industry’s demand for a shortening time to market had created the ideal environment for frausters to flourish. However, Adam Fletcher, chairman of UKEA member association AFDEC adds: “Driving producers of counterfeit components out of the supply network will probably take at least five years and is reliant on our industry collaborating well, regulating itself better, and gaining international government support.”

The UKEA paper containing detailed recommendations has recently been sent to HM Revenue and Customs and The UK Intellectual Property office. The alliance will be following this with a series of meetings and by contacting parliamentarians to discuss the issue.

Image courtesy of Soldertec.

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