Enforcement bodies hamstrung by fuzzy laws and thin resources
A market watchdog official seizes fake HP ink cartridges in Ho Chi Minh City. A recent report says Vietnamese officials are incapable of staunching the rapid growth of the counterfeit trade.
Customs officials and anti-counterfeit units are understaffed and lack regulatory backbone, according to a report issued by the Central Counterfeit Production and Distribution Fighting Board last week.
The board was joined by the ministries of Industry and Trade, Finance, and Science and Technology, all of whom claimed that despite their efforts, Vietnamese officials are incapable of staunching the rapid growth of the counterfeit trade.
The report's authors described Vietnam's regulatory force as small and strained "“ about 5,000 market monitoring officials have been scattered across 63 provinces and cities to fight an untold force of fake goods producers.
They also claimed that legislators have, so far, failed to establish specific penalties for intellectual property violations. Instead, a vague net of rules has been cast wide over a range of unrelated industries.
The Ministry of Industry and Trade has announced that it is preparing a proposal that will establish specific penalties for fake goods and is in the process of submitting the recommendations for approval. The proposal will carry a maximum financial penalty of VND50 million (US$2,566) per violation.
In the meantime, the authors said, Vietnamese enforcement agents face a growing opponent.
More people in local and neighboring markets are joining the trade that traffics fake goods in and out of Vietnam through the country's porous, rugged border.
Tran Viet Hung, head of the National Office of Intellectual Property of Vietnam, said 60 percent of fake and counterfeit products were imported into the country through these weak spots.
Hung said his team was responsible for keeping an eye on a large range of products like cosmetics, medicines, clothes, bags and documents for tax purposes.
He said the majority of the products originated in China, which the European Union recently dubbed the world's "factory" for fast and easy knockoffs.
Hung claimed that the bootleggers are plaguing domestic and international manufacturers alike.
The report said that 100,000 cases of fake goods or intellectual property violations had been discovered in the last ten years. The report excluded an estimated 200 cases handled by investigators working for the nation's customs officials.
Nguyen Phi Hung, deputy head of the Smuggling Investigations Department under the General Department of Vietnam Customs, said the figure did not begin to describe the reality of the situation.
The customs official further claimed that his department is only empowered to investigate or refuse clearance for shipments of products that businesses suspect of violating intellectual properties.
In this way, he alleged, the customs enforcers were somewhat hamstrung by regulations.
According to Hung, customs officials are not allowed to undertake any long-term seizures or initiate investigations unless they receive requests to do so from businesses or individuals.
He says the rule creates a "loophole" for imported fake goods and that the law has turned Vietnam into a "transit" hub for fake goods destined for other markets.