VietNamNet Bridge – Vietnam has been warned that Chinese counterfeit goods manufacturers are eyeing the country as a potential alternative production site, due to the lower labor costs and more lax examination by importers.

Do Thanh Lam, Deputy Head of the Market Management Agency, an arm of the Ministry of Industry and Trade, said that counterfeit goods available in the domestic market are either made domestically or imported under the mode of CBU (complete built units) or knock-down parts.

“We have found companies which provide counterfeit goods so similar to the authentic goods that only the real manufacturers can discover the frauds after applying specific professional measures,” Lam said.

A report of the Market Management Agency revealed that 10,500 cases of counterfeit goods production and distribution were found in 2010, for which the violators were forced to pay total fines of VND44.4 billion. These figures rose to 14,000 cases and fines of VND62.01 billion in 2013.

Nguyen Thanh Hong, a senior official of the National Office of Intellectual Property (NOIP), commented that as Vietnam is the next-door neighbor of China, a “counterfeit goods power”, it is understandable that more and more counterfeit goods have been penetrating the border gates.

Phan Minh Nhut, a high ranking executive of Nike, noted that counterfeit goods manufacturers tend to relocate their production bases to Vietnam because of the increasingly high labor cost in China.

Besides, China, well known as a counterfeit goods producer and exporter, always sees its export products examined carefully by importers, especially European ones. This has prompted the Chinese manufacturers to make products in Vietnam instead of China to avoid such strict examination.

Hong from NOIP cited statistics from US Customs as establishing that of the total counterfeit goods seized in the US every year, 70 percent are from China and one percent from Vietnam.

Therefore, Hong has urged appropriate agencies to “take actions” to prevent Vietnam from following the Chinese way of making counterfeit goods.

“Vietnam is a member of the World Trade Organization (WTO), and it will soon be a member of the Trans Pacific Partnership. Hence Vietnam will have to obey the rules on intellectual property,” Hong said.

Observers have noted that some “counterfeit goods villages” are already taking shape in Vietnam. These are the suburban areas of Thai Binh, Nam Dinh and Vinh Phuc Provinces, which can provide counterfeit goods in large quantities.

However, Lam noted that the majority of Vietnamese businesses have been uncooperative with state agencies in combating counterfeit goods. Only big enterprises or multi-national groups have signed agreements with the agencies on the joint forces to prevent counterfeit goods.

“In some cases, real manufacturers don’t want to provide information to appropriate agencies because of concerns about the consequent publicity. The fear that an awareness of counterfeit goods would make consumers turn their backs on their products,” Lam said.

According to Hong, only 490 Vietnamese businesses have registered to join the Madrid System, the international system allowing businesses to search and register trademarks in up to 92 countries. This is evidence that intellectual property rights are not a top priority for Vietnamese businesses for now.

VietNamNet/TBKTSG