Nairobi, Kenya. September 15. The East African Business Council (EABC) in collaboration with Kenya Association of Manufacturers (KAM) and the Ministry of Trade, Industry, and Cooperatives today kick-started the Second Regional Anti-Illicit Trade Conference in Nairobi. The main focus of the conference was to seek practical solutions on the ever growing issue of counterfeits, piracy and other forms of intellectual property infringement, smuggling, substandard goods, transit fraud and dumping and trade in prohibited goods and products.
Key to these discussions was the current status of the existing regional and national regulatory frameworks for combating various forms of illicit trade and strategies on how to strengthen them. The talks also centered on how the region can achieve effective enforcement, including the need to set-up inter-agency cooperations at national and regional level; the long-existing contributors to illicit trade, information exchange and consumer education.
The two-day conference aims to come up with proposed policy reforms and key recommendations for prioritized, expedited and coordinated implementation of the strategies discussed.
Speaking during the conference the Principal Secretary, State Department for Trade in the Ministry of Industry, Trade and Cooperatives, Dr. Chris Kiptoo said, “The efforts to combat illicit trade are already underway championed by both private sector and government agencies. Indeed such a persistent vice cannot be combated if we all decide to go at it alone, more collaborative strategies need to be devised and as government we are assuring the existing agencies and business community that we shall look into enhancing the capacity for those charged with this difficult task.”
The Organisation for Economic Co-operation and Development (OECD) estimates that EAC governments lose over $500 million in tax revenue annually due to the influx of counterfeit and pirated products. Much as the figure does not encompass several other forms of illicit trade, the total tax revenue losses from illicit trade exceed the amount.
Uganda is said to lose $1.4 billion, equivalent to almost 5.5 per cent of its gross domestic product (GDP). Tanzania is, in turn, estimated to lose about $1.5 billion in revenue to counterfeits; while in Kenya, KAM estimates a loss of over $42 million annually to illicit trade and approximately $80 million loss in Government revenue.
“Although progress has been made in several areas since; a lot more still ought to be done to win the fight against illicit trade. Evaluation of illicit trade and its effects is challenging, because it operates outside the law, making it hard have accurate data on its scale. What is certain, however, is that illicit trade is driven by the economic opportunity it offers vendors to make money illegitimately in an environment wherein opportunity for economic benefit is perceived to outweigh the actual risks involved.” Ms Lillian Awinja, EABC Chief Executive Officer, said.
Echoing these sentiments, KAM Chairlady Ms. Flora Mutahi said, “Illicit trade is still a huge problem in our country. We are talking of illegal practices that endanger the lives of our citizens due to lack of quality and have a negative effect on our economy since revenue owed to the government is denied. KAM’s 2012 study on the vice of counterfeiting in Kenya, estimated that Kenyan manufacturers have been losing at least 40% of their market share to counterfeiters. It is a huge burden to genuine manufacturers who have to allocate resources to monitoring these activities while their resources would be more profitable if channeled towards expansion and diversification of businesses.”
International participants such as World Customs Union (WCO), International Chamber of Commerce (ICC’s) and Business Action to Stop Counterfeiting and Piracy (BASCAP) were also present at the conference.
The EABC and KAM will take forward the recommendations by drawing up an implementation plan that indicates clear responsibilities and a monitoring and evaluation plan.
The first conference was held in 2010 organized by the EABC in partnership with the EAC and the Government of Kenya.
Notes to editors
In October 2010, the EABC, in partnership with the EAC Secretariat and the government of Kenya held the first regional Anti-Illicit Trade Conference. Amongst the key recommendations from the conference were the following:
§ There was a need to expedite harmonisation of the legal regimes related to intellectual property rights (IPR) and the legislation regimes, including patents, copyrights, trademarks and industrial designs;
§ At national and regional level, enforcement mechanisms should put in place and where existing, their enforcement capacity should be enhanced. This should also include the establishment of a regional enforcement committee;
§ Punitive laws should be put in place to deter the practice of trading in counterfeit products and other forms of illicit trade, including repossessing property / revenue gained from such practices;
§ A database of IP rights across the region should be published to ease trading across the region; and,
§ The business community should have a code of conduct at the regional level that promotes ethical behaviour and punishes / deters illicit trade.
Since then, there have been several notable areas of progress in the fight against illicit trade. Key among these include the adoption of EAC Anti-Counterfeit Bill, 2013, by the Council of Ministers; the full operationalisation of the Anti-Counterfeit Agency in Kenya; enactment of the Consumer Protection Act in Kenya in 2012 (though this has not been passed into law to date); formulation of the Anti-Counterfeiting Goods Bill of 2015 in Uganda which has undergone parliamentary discussion and the formulation of the Competition and Consumer Protection Bill in Rwanda.
Other areas of progress include the launch of the EABC Regional Code of Conduct, which was endorsed by the EAC Heads of States and key businesses in March 2016.
For more information contact:
PR & Corporate Communication Manager,
East African Business Council EABC)
+255 784 32 99 31
PR, Communications and Marketing Manager
Kenya Association of Manufacturers (KAM)