China source of 80 pct of suspected fakes seized in US

BEIJING, June 15 (Reuters) China is the source of about 80 per cent of shipments of suspected fake goods seized by US Customs last year, a US Customs official said today.

The extent of pirated goods made in China, from drugs and designer bags to golf clubs and DVDs, has become a major source of friction between Beijing and Washington, prompting the United States to lodge two intellectual property rights (IPR) cases against China at the World Trade Organisation this year.

W Ralph Basham, Commissioner for US Customs and Border Protection, said he hoped a new agreement with China to provide information on seizures would help curb rampant violations.

''We've got to start dealing with the source of the problem.

We can't expect to rely on interdiction to be our tool in order to stop these IPR violations,'' Basham told reporters.

''So we've got to go with a strategy that is dealing with where the source is and who is manufacturing -- who's importing it, who's exporting it, and then start to come down on these companies, and start to make these penalties significant,'' he said.

In 2006 alone, the United States seized more than 14,700 shipments that violated intellectual property laws, about 80 percent of which originated in China, Basham said.

The agreement signed last month between Basham and Mu Xinsheng, China's Minister of Customs, requires each side to provide information to the other about the identity of the suspected shipper or exporter.

Once the entity is identified, China would then be commited to investigating.

''They will then provide us back information as to what enforcement actions they have either taken or anticipate taking,'' Basham said.

The aim was to formalise a process through which each responds to the other with actual results of investigations, rather than simply sharing information, he said.

''Many times when we've provided information, we didn't get results,'' Basham said. ''What happened to it?'' REUTERS NY DS1136