Reference ID: 08ZAGREB812    

Created: 2008-12-01 14:27   

Released: 2011-08-30 01:44    

Classification: UNCLASSIFIED//FOR OFFICIAL USE ONLY    

Origin: Embassy Zagreb

                  


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SENSITIVE

SIPDIS

 

DEPARTMENT FOR EEB/TPP/IPE

 

E.O. 12958: N/A

TAGS: ECON ETRD PGOV SOCI HR

SUBJECT: NIKE REPRESENTATIVE DESCRIBES COUNTERFEIT GOODS

SMUGGLING IN CROATIA

 

¶1.  Summary.  Nike's brand protection manager for Croatia met

with Econ and FCS officers at the American Chamber of

Commerce in Zagreb in late November to discuss patterns of

counterfeit goods smuggling and quality of enforcement as it

faces growing demand for smuggled counterfeit apparel

throughout the region.  He said that Croatia's geographic

position is extremely advantageous to goods smugglers, but

the response and capacity of law enforcement is uneven at

best.  As a result of this meeting, AmCham and embassy

representatives decided to form an IPR working group among

AmCham's member companies to share information on counterfeit

goods production/smuggling, and to look for opportunities to

raise awareness of the issue with Croatian government and law

enforcement circles.  End summary.

 

¶2.  With the assistance of the Nike representative, customs

officials at the port of Rijeka recently seized 20 shipping

containers filled with thousands of pairs of counterfeit Nike

shoes destined for markets throughout Europe.  The shoes are

now awaiting destruction at a warehouse, but the seizure

highlights a growing trade through Croatia in counterfeit

apparel, according to Nike.  While Nike has not identified

Croatia as a major producer of fake goods, its geographic

position makes it a desirable entry point for goods headed to

customers both close by, such as the large counterfeit goods

markets in Brcko, Bosnia-Herzegovina and in New Belgrade,

Serbia, as well as to markets as far away as the UK.  Most of

the counterfeit goods originate in China.

 

¶3.  Nike has established relationships with police and

customs officials throughout Croatia, who alert Nike when

they intercept a suspicious shipment.  The Nike rep then

goes, sometimes in the middle of the night, to inspect the

merchandise and tell Croatian officials whether the goods are

fake.  He admitted that this identification is not always

easy and sometimes requires him to send a sample for closer

examination by Nike headquarters.  Once identified as fakes,

the shoes are held in a warehouse while he arranges for their

destruction.  But the smugglers adapt quickly to avoid his

interference.  There have been recent cases of shipments of

"blank" shoes, with a courier bringing in suitcases full of

the famous Nike "swoosh" later on.

 

¶4.  Often the Nike representative secures the cooperation of

the trucking or shipping company involved to help identify

future shipments as a means of reassuring authorities of the

shipper's innocence in the crime.  He also works closely with

Nike's competitors Adidas, Puma, and others, recognizing the

mutual goal of stopping the counterfeit goods trade.

 

¶5.  Unfortunately, Nike often comes up against regulatory and

resource deficiencies on the Croatian side that hinder IPR

enforcement.  Our contact admitted that his seizures are only

quasi-legal since the designs being counterfeited are only

rarely covered by Croatian patent law.  This is because of

the lengthy procedure to register individual designs with

Croatian authorities (often taking over a year).  He

explained it is impossible for an international apparel

manufacturer, issuing hundreds of new products over four

seasons, to comply with the letter of Croatian law on

registration of designs.

 

¶6.  Law enforcement resources and political will are also

severely lacking.  The recent successes at the port of Rijeka

have been due solely to the energy and dedication of three

Croatian customs inspectors who have been willing to make the

effort to identify the shipments and work with the apparel

company representatives to stem the tide of counterfeit

goods.  At other points of entry, especially along the long

land borders with Serbia and Bosnia Herzegovina, cooperation

is mixed at best.  Even in Zagreb, the will among law

enforcement to fight trafficking in counterfeit goods is

sometimes weak.  Our Nike contact told us he reported to the

police weeks ago the name and address of an individual

offering counterfeit goods for sale over the internet, but

the police have yet to act.

 

¶7.  COMMENT:  In discussions on international trade, Croatia

is often quick to mention that the port of Rijeka is three

days closer to Asia and the Middle East than the port of

Rotterdam.  This advantage has clearly been noticed by

counterfeit goods manufacturers as well.  Croatia also

struggles with a legal and law enforcement capacity that is

often lacking or out-matched.  This is especially true along

the Bosnian border, where understaffed Croatian units face

smugglers with years of experience in trafficking of goods;

 

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experience in many cases honed during the Yugoslav wars, when

smuggling was a matter of life or death.  These factors

combine to suggest the transport of counterfeit goods through

Croatia will be tough to combat.  END COMMENT

BRADTKE