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C O N F I D E N T I A L CASABLANCA 000057 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR NEA/MAG AND NEA/PI 
 
E.O. 12958: DECL: 02/26/2017 
TAGS: ECON EFIN KDEM MO
SUBJECT: GENUINE EFFORTS TO CURB COUNTERFEIT IN MOROCCO? 
 
REF: 06 CASABLANCA 883 
 
Classified By: Principal Officer Doug Greene for reasons 1.4 (B) AND 
(D) 
 
¶1. (C) SUMMARY: Difficulties encountered over the past year by the 
Consumer and Brand Protection Group (CBPG), a working group formed by 
several multi-national consumer goods companies to address the 
prevalence of counterfeit merchandise in Morocco, highlights the 
challenge of practically implementing Morocco's IPR commitments. 
After less than a year in existence, the group has decided it must 
become an official, government-backed entity in order to make 
headway.  The group has identified a number of Moroccan laws that 
need to be amended, and believes that customs must assume a more 
proactive role in seizing fake goods.  While Morocco has a decent 
track record on IPR and anti-counterfeit measures, the CBPG's 
experience suggests that continued efforts are warranted.  END 
SUMMARY. 
 
------------------------------ 
BRAND PROTECTION GROUP FIZZLES 
------------------------------ 
 
¶2. (U) Multinational consumer goods companies active in Morocco 
estimate that they lose about USD 200 million per year as a result of 
counterfeiting.  The problem led the companies, which include Proctor 
and Gamble, Bic and Nike, to come together in mid-2006 to form the 
Consumer and Brand Protection Group (CBPG).  Initial strategies 
considered by the group include having an auditor do an economic 
impact study to estimate losses; launching awareness campaigns to 
help people differentiate between fake and real goods; and educating 
consumers about the health risks associated with certain counterfeit 
products. 
 
¶3.  (SBU) Since the group identified these priorities last year, 
however, little has been accomplished.  Without formal, legal status, 
the group has been unable to win other converts to its cause, or to 
convince larger business organizations, such as The General 
Confederation of Enterprises of Morocco (CGEM), to lend their support 
to the anti-counterfeit push.  In addition, hopes that the government 
would move to create a promised national anti-counterfeit task force 
have not been realized. 
 
¶4. (SBU) The group hopes that by achieving legal status, it can 
attract companies that until now have declined to join a purely 
private sector initiative.  At present, the few companies involved do 
not have sufficient resources to bankroll a coordinated 
anti-counterfeit effort, nor do they feel they should without 
government buy-in. 
 
------------------------------------------- 
LINK COUNTERFEIT TO TERRORISM TO ENGAGE GOM 
------------------------------------------- 
 
¶5. (C) The CBPG had originally hoped that arguments highlighting lost 
jobs and tax revenue (estimated to be as much as USD 100 million) 
would convince the government to step up anti-counterfeiting efforts. 
 Ismail Chajai of P and G now believes that the best way to get the 
GOM to take action is to emphasize the links between organized crime, 
terrorism and counterfeit.  If statistics on the economy and lost 
jobs do not motivate the GOM, Chajai believes safety and security 
will.  Information uncovered by P and G investigators has already led 
him to suspect a possible connection between terrorism networks and 
the savvy and well-financed counterfeiters of P and G's Always brand 
maxi-pads. 
 
------------------------------------- 
TRADEMARK, CUSTOMS LAWS NEED TWEAKING 
------------------------------------- 
 
¶6. (SBU) Not only does Chajai consider government involvement key to 
anti-counterfeit efforts, but he also feels that existing laws need 
to be tweaked.  Despite amendments to make Morocco's Industrial 
Property Law comply with the Intellectual Property Provisions of the 
U.S.-Morocco Free Trade Agreement (FTA), companies see practical 
difficulties in effectively implementing the provisions.  Under the 
new law (31-05), implemented last year, a company has two months to 
register opposition to a trademark application.  This puts the burden 
squarely on the private sector and legitimate trademark holders to 
protect their brands proactively.  Furthermore, Chajai says it 
typically takes six months of haggling after a complaint is filed 
before OMPIC issues a recommendation.  Going to a commercial court 
for a decision can take up to eighteen months.  Such long lag times 
enable counterfeiters to continue producing and distributing fake 
goods to the detriment of the legitimate producer. 
 
¶7. (SBU) Chajai also takes issue with the fact that counterfeiting is 
not a customs offense punishable by fines.  As with trademarks, the 
onus is on private companies to alert customs to the possibility of 
an incoming counterfeit shipment.  Customs then requires the alerting 
company to accept liability for any seized goods and associated 
indemnities.  Such a system essentially makes companies pay to track 
and intercept fake goods, a pursuit that many may not be able to 
afford.  Indeed, Chajai contends that most companies are aware that 
counterfeiting is a problem, but either do not know what to do about 
it or are not willing to put up the money to fight it. 
 
¶8. (SBU) The current system for initiating seizures is problematic 
for other reasons as well, in Chagai's view.  Companies must alert 
customs of an incoming counterfeit shipment in enough time to have 
them act.  This can be challenging if they themselves are given 
little notice.  Recently, customs failed to seize part of a shipment 
of All Well's, a counterfeit version of P and G's Always brand, 
claiming they did not receive P and G's request in time.  In 
addition, it is important, if at all possible, for customs to 
intercept all parts of counterfeit shipments, since the profit margin 
on fake goods is often so high that counterfeiters stand to make a 
lot of money even if not all their shipments get through.  (To cite 
an example, a seven-pack of All Well's costs two cents to produce and 
sells for eighty cents, while genuine Always costs thirty-five cents 
to produce and sells for a dollar twenty per package).  As Chajai 
sees it, if customs officials were taught to detect fake products and 
could impose steep fines on counterfeiters, they would have greater 
incentive to stop illegal shipments on their own. 
 
¶9. (C) COMMENT: While progress has been made in curbing 
counterfeiting and protecting Intellectual Property Rights (IPR) in 
Morocco, with improved Customs enforcement and trademark 
registration, CBPC's experience shows that work remains to be done to 
ensure that Morocco's legislation is effectively implemented.  ConGen 
and Embassy are working jointly to support the group and to ensure 
its concerns are considered and addressed by relevant Ministries. 
END COMMENT. 
 
GREENE