New York moves to make buying of counterfeit products a crime

City proposes US$1,000 fine and up to a year in jail for customers who buy counterfeit products, but the bill runs into strong opposition

PUBLISHED : Saturday, 15 June, 2013, 12:00am
UPDATED : Saturday, 15 June, 2013, 2:47am


Bargain hunters from around the world flock to New York's Chinatown for bags, jewellery and other accessories bursting onto pavements from storefronts along Canal Street.

Among the goods are luxury items labelled Prada or Louis Vuitton or some other luxury brand - counterfeits sold for a pittance. In some cases, handbags going for US$2,000 on Fifth Avenue can be had downtown for, say, US$20.

They are seductive fakes.

Until now, the law enforcement focus has been on catching the sellers. But if a proposed bill passes the city council, customers caught buying counterfeits could be punished with a fine of up to US$1,000, or up to a year in prison. The New York City legislation, if passed, would be the first in the United States to make the purchase of counterfeits a criminal offence.

Council member Margaret Chin, who introduced the bill, said at a public hearing on Thursday that counterfeits deprived the city of at least US$1 billion in tax revenue a year that could support community improvements. Further, she said, the counterfeit trade has been linked to child labour and the funding of organised crime and terror groups.

"For tourists, it's fun, it's a bit of adventure," Chin said. "We have to let people know that if you engage in this activity you are committing a crime."

On the street, day after day, sellers press their hard-sell routines.

"Rolex, Chanel," a man on a street corner whispers to someone passing. "Get this before the police do," he adds with a grin.

Buyers are walked to a designated spot where they are quietly shown photos of the desired goods. Choices are then signalled to another person who disappears to an undisclosed location - a vendor's back room, a nearby flat, the back of a van.

The item arrives within minutes and cash exchanges hands.

The counterfeit vendors were also a hassle for those who lived in the area, said John Hagen, a resident there for the past 30 years. The counterfeit vendors had ruined his block. "I walk out of my house every day into it," he said. "I'm sick of what this has done to our neighbourhood."

Some at Thursday's hearing were concerned about how the new law would be enforced and whether it would hurt both businesses and buyers.

Among them was Kathleen McGhee, director of the Mayor's Office of Special Enforcement and the official in charge of the sting operations that have closed down 40 illegal stores in Chinatown since 2006. She testified against the bill, saying it would be difficult to prove in court that a customer had knowledge that the goods were counterfeit.

Council member Peter Vallone Jnr said he would not support the bill in its present form. "A year in jail seems a little tough" for buying fake goods, Vallone said.

A 30-year-old shopper in the area, Ashley Hunter of South Carolina, said: "How would I know I'm not supposed to buy something, that there's a fine?"

Melissa Kirkpatrick, of Utah, was not too concerned about the legality of the items selling on Canal Street, where she was with her family. She was looking for a Rolex for a friend at home. "If I can buy it for US$50, I will, real or fake," she said.

Chin said city officials would launch a visible campaign informing the public and tourism companies, distributing flyers and posting signs.

For years in Chinatown, logo-bearing items were openly displayed, spread across pavements in burlap scooped up by vendors spirited away if police appeared.

Only the most daring do that now, since city raids resulted in the elimination of whole blocks of shops and the demolition of a building used as a warehouse.

Some shops now use stealth tactics to keep sales rolling.

Asked if he carried "designer bags", one merchant pointed to a knock-off on a shelf, explaining that he "can make it into a designer bag if you wish".

He stepped behind a curtain, emerging with a metal plate bearing the name "Prada". He said he would attach the label to whichever bag a customer chose.