Tuesday, July 3, 2012

Fakes, Frauds and Counterfeits

China is still the number one country for counterfeit and pirated goods. Most everyone is familiar with counterfeit goods. These are knock offs meant to look like the real thing but for a fraction of the price. Some of the most well known and popular counterfeit goods include footwear, handbags, apparel, watches and jewelry. Counterfeiting is 7% of the global trade and has a street value of $260 million as of 2009.  No wonder counterfeiters are expanding into rare coins.

The Profession Coin Grading Service or PCGS is warning of Chinese made counterfeit rare coins. Apparently these counterfeits have increased in quantity and quality. It is getting hard to tell the real graded coin from the fake graded coin. This is particularly troubling since a graded coin is usually a mark of value. While counterfeit coins coming out of China are not new, what is new is the counterfeiting of the grading service holder.

Counterfeiting is a serious problem and US Customs is facing real barriers to stopping the flow of counterfeit goods from China. The Chinese government has encouraged this entire industry by allowing factories to operate out in the open. The government is not stepping in to stop these activities and by ignoring counterfeiting it is the same as endorsing it. Plus, once a counterfeit enters the country it is much more difficult to track, arrest and prosecute individuals instrumental in manufacturing counterfeit goods.

A delegation of professional numismatists and Rep. Lamar Smith (R-Texas), chairman of the House Committee on Judiciary is introducing legislation (H.R. 5977) to strengthen the Hobby Protection Act of 1973. By adding clear language that specially targets those who ‘provide substantial assistance or support to any manufacturer, importer, or seller of counterfeit items’ Congress is hoping to stem the flow of counterfeit goods into the US or at least make it easier to prosecute those who engage in counterfeiting. Let’s hope that it works.

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