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Customs training in Miami: the battle to prevent...

Customs training in Miami: the battle to prevent infringements of Swiss made in America

Monday, 15 September 2014
By Michel Arnoux
Michel Arnoux

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5 min read

The American customs administration and the FH are collaborating closely to curb unlawful use of the Swiss made label.

For some time, all eyes in the watch industry have been turned to the East, to China. So is it business as usual in the West? This view tends to overlook the fact that in an average year, the American market is a highly profitable customer for the Swiss watch industry. As the second largest export market for Swiss watches after Hong Kong, the United States merits particular attention. The FH knows better than most that consumer confidence is paramount. That is why it is making sustained efforts to protect the renown of the Swiss made label on watches in the New World.

In this context, it should be borne in mind that legal provisions specifying the origin of a watch are less strict in the United States than in Switzerland. To impose at least partial application of the Swiss criteria, the FH has recourse to the certification mark. What is this? It is a mark that holders themselves do not use, but make available to others provided the rules governing it are observed. As a corollary to this right of use, holders may enforce their certification mark in the event of an infringement.

Obtaining a certification mark is no easy matter.

Obtaining a certification mark is no easy matter. The procedure is long and costly; it is however a trouble worth taking. Today, the FH has at its disposal a high-performance tool which effectively protects Swiss and Swiss made indications in the United States. Any entity which uses these indications on watches destined for the American market must respect rules governing use of the certification marks in question, which refer expressly to provisions outlined in Swiss legislation. Infringements will be pursued in the courts on the basis of trademark law.

Registration of the marks Swiss and Swiss made with the American customs administration has had two very beneficial effects: firstly, a considerable increase in our scope of action, hitherto very limited in the USA; secondly, the revelation of significant trafficking in watches which fraudulently use the name Swiss, generating lucrative profits for unscrupulous importers and unchecked thus far due to the lack of a legal basis on which to build a prosecution. Used carefully and intelligently, our certification marks have allowed American customs to flush out a number of large-scale rackets in terms of the volume of imports. Polluting the American market with poor quality watches made entirely or partially in Asia, these importers inflict considerable damage on Swiss watch manufacturers which can ruin efforts made by the latter to ensure reliability, quality and consumer loyalty. Since in the final analysis, this is precisely the case: a deceived or a disappointed buyer is a lost customer. This gives an idea of the importance of intervention by the customs authorities, whose contribution is indispensable in safeguarding healthy competition and a clean market.

Any infringements will be prosecuted.

Given the sums at stake, fraudulent importers show colossal nerve and absolute bad faith in their dealings with the customs administration, resorting to a wide range of methods to evade the vigilance of officers and lead them astray. They make the most of the fact that customs officers have little or no inside knowledge of the watch industry. It is precisely on this point that the FH can provide concrete and effective support to the American authorities.

To this end, on 14 August this year, the head of the FH Anti-Counterfeiting Department visited the offices of the customs authorities in Miami to conduct a day of intensive training organised for Import Specialists of the U.S. Customs And Border Protection agency. Around ten officers listened attentively to technical explanations and took an active part in practical exercises designed especially for their benefit. The officers were able at their leisure to examine in detail several watches intended for the American market which carried fraudulent markings and technical indications, or indications of origin, in violation of Swiss law. Since one or more such anomalies may be present on a single watch, each case requires in-depth consideration. Experience shows that fraudulent importers know the ins and outs of the law, exploiting the smallest loopholes and using and abusing all kinds of cryptic inscriptions. One edifying example: a watch selling for more than $2,000 which shamelessly bears the indication “individually handcrafted in Switzerland”, whereas in truth it was made entirely in China.

Thanks to the excellent collaboration initiated with the American customs administration, as well as to valuable personal contacts made during this stay in Florida, and not least to our certification marks which are now fully enforceable, we can be reassured and confident: any infringements will be prosecuted. A word to the wise is enough!

It is the sheer density of small watchmaker’s shops that catches the eye.
Downtown Miami: warning - black market

The municipality of Miami had 300 inhabitants in 1896 when it was founded. Today the city is at the centre of a huge conurbation of nearly six million people. A major port, the city has very close links with Latin America, a special relationship maintained by an important Spanish-speaking diaspora (mainly from Cuba and Argentina). In the centre of town, where the visitor will hear Spanish being spoken before English, it is not rare to encounter a taxi driver who speaks French: Haitian nationals are also very numerous.

This multiethnic character is reflected in all commercial activities, with each community establishing its own import-distribution network for various consumer goods. Watches are no exception to the rule. So far, so good, except that some ill-intentioned people benefit from the opacity of this plethora of networks to conduct all kinds of clearly illegal activities. And in this context, it has to be admitted that watches are a choice product. Roaming the streets of downtown Miami, it is the sheer density of small watchmaker’s shops that catches the eye. Of course, none of these points of sale is an approved reseller, nor do any lay claim to such status. The profusion of luxury watches of all makes comes as something of a surprise.

A visit to a downtown shopping mall provided confirmation of the unusual size of the black market which Miami appears to have made its speciality. On two floors, around twenty boutiques offer entire lines of luxury watches which can be purchased new or second-hand. The watches all have quirky histories. For example, a brand new prestige timepiece in white gold (the factory protections have not been removed) with a warranty card mentioning a sale in February 2014… in Argentina?!? How can a watch sold in the approved network in Argentina be offered for sale six months later, as new, in a jeweller’s shop in Miami? Possible explanations are provided by customs investigators: money laundering, tax fraud, and the recycling of stolen watches. In short, nothing but the cleanest bill of health. In such an unsavoury environment counterfeiting can only become more widespread, more is the pity.

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