Every year counterfeit products worth about R362-billion are sold in South Africa – a substantial number of which are counterfeit automotive parts, says specialist intellectual property law firm Spoor & Fisher.
“This is a serious problem – the local economy loses a significant amount of money because counterfeiting drives down sales of locally manufactured parts,” says Spoor & Fisher partner Paul Ramara.
He explains that counterfeit parts are not declared at the correct value and, as such, are not subject to correct taxing structures. “This, in turn, allows for counterfeit parts to be sold at significantly cheaper prices than original- equipment-manufacturer- (OEM-) approved parts.”
Ramara states that the issue of counterfeit automotive parts should be handled differently to other counterfeit products, such as clothes. He highlights that automotive parts, such as brakes, are an unmistakable safety feature in people’s lives and that the failure of these parts to perform to standard could result in serious injuries or even death.
“Counterfeit parts do not conform to any industry standards and can be made from virtually any material. This is particularly worrying, considering the high number of accidents on South African roads, especially over the festive season. Everyone talks about drivers having to obey the law, but not much focus is placed on the use of low-quality counterfeit parts, which could be directly linked to road accidents,” he asserts.
Ramara suggests a multipronged approach involving the South African Revenue Service’s (Sars’s) customs division, the Department of Trade and Industry (DTI) and automotive industry stakeholders.
“The first line of defence needs to be Sars customs. However, Sars cannot deal with the problem alone because of the massive volumes of counterfeit products entering the country. Therefore, the DTI should assist customs, as the department plays an important role in the regulation of the automotive industry,” he posits.
Ramara points out, however, that counterfeit parts often look like the genuine item and it is unlikely that a customs official will be able to distinguish counterfeit products from OEM parts. “The automotive industry will, therefore, need to get involved to educate officials on how to identify counterfeit parts,” he concludes.