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By Jim Montague, executive editor
Some problems aren’t as bad as they appear, and some are worse. Dealing with counterfeit process control devices isn’t one of the easy ones. This is because fake equipment, its makers, and its collaborators constantly shift—disappearing and reappearing to avoid detection.
Even definitions of what constitutes counterfeiting have many shades. For example, faking a manufacturer’s device and name is counterfeiting, but precisely mimicking its product is defined as imitation, which is harder to prosecute. Meanwhile, false process control components are accompanied by counterfeit plates, marks, documentation, certifications and other forms of verification. Some ambitious counterfeiters even use false sales representatives and set up fake corporate entities to further distract and deceive their victims (see Sidebar, Beware of Bogus Agents at the end of this article).
Similarly, besides fabricating fake devices, some counterfeiters take an even easier way out, and simply misidentify old or refurbished components. Likewise, many repair shops fix devices, but some unknowingly or knowingly leave on original plates and/or don’t perform the testing needed to make sure these devices have as-new capabilities and service lives.
Lately these historical difficulties have been compounded by two recent trends. First, Internet-based businesses, such as eBay and others, routinely sell millions of dollars worth of process automation equipment and enable the smallest shop to market and deliver items worldwide. These speedy, global transactions can be helpful, but participants reportedly don’t conduct as much verification and certification as traditional manufacturer-to-distributor channels. Second, besides the liability burden that end users must usually take on for their applications and equipment, increasing federal regulation of process controls used in pharmaceutical and food and beverage applications and more stringent documentation requirements are making it even more important to have genuine, tested and certified process devices in place.
“We haven’t personally identified any counterfeit items, but our customers report seeing many items on eBay for more than 30% off list prices,” says David Stock, a system integrator at Innovative Control Inc. (ICI), Crystal Lake, Ill. “If someone else wants to purchase equipment that way it’s fine with me, but I think buying in an environment without distributors and traceability is a serious risk.”
Stock agrees the Internet has added to this problem, and the usual distribution channels haven’t acknowledged it enough. “I’ve run into being audited by a customer on the software side, and had to verify that all my purchases were certified and legitimate licenses,” says Stock. “I think hardware will follow this model because users and suppliers need to identify the counterfeits.”
The International Chamber of Commerce (ICC) estimates that trademark counterfeiting accounts for about 6% of world trade and is worth an estimated $350 billion annually, according to a white paper, “The Threat of Counterfeit Product Approval Marks Warrants Aggressive Detection and Enforcement Action,” by a recent alliance between U.S. Occupational Safety and Health Administration (OSHA) and the American Council of Independent Laboratories (ACIL). “In its mid-year 2005 report, the U.S. Department of Homeland Security’s Customs and Border Protection division reported that customs seized more than $64 million dollars worth of counterfeit products in 3,693 seizures. Electrical equipment, much of it intended for the U.S. workplace, alone accounted for over $6 million,” stated the OSHA-ACIL alliance’s report. “The International Anti-Counterfeiting Coalition (IACC) reports the majority of counterfeit products come from Asia, primarily China, and that Eastern Europe has also become a significant source. The manufacture and distribution of counterfeit products has been linked to organized crime. Counterfeit approval marks have been found on electrical products built using substandard materials and exhibiting compromised electrical spacing—both of which pose potential shock and fire hazards to U.S. employees.”
Rob Bartlett, director of the British Valve and Actuator Association, says his organization’s technical director reports there was very little counterfeiting of mainstream valves just five or 10 years ago, but now there’s more anecdotal evidence than ever before about fake products and parts, coming mostly from Asia and specifically China. “Everyone has a story. A lot of device manufacturers have seen their own literature cannibalized by XYZ Co. There’s not much evidence, but no western manufacturer has said another western manufacturer is doing it.
“What’s happening is that the global energy industry is booming now after contracting and consolidating, but supplying this booming market is increasing lead times for equipment by weeks and months, and that can make it very tempting to accept devices with documentation that isn’t what it should be. When you’re in a rush, you may not check some certifications as close as possible. So, besides checking that documents aren’t bitmapped images and telephoning to confirm suppliers’ claims and identities, buyers also must be responsible for their devices’ audit trails, and make sure where, when and who makes these products.”
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