China, Russia Tops in Piracy, Counterfeiting, Companies Say

International corporate giants on Monday accused China and Russia of being the worst countries for business piracy and counterfeiting "by a large margin."

Some two-thirds of all counterfeit goods seized in the European Union originate in China, a report by the Business Action to Stop Counterfeiting and Piracy said.

The group, whose members include multinationals such as General Electric (GE), Vivendi Universal (VIV), EMI Group (EMI) and Microsoft (MSFT), cited lax government enforcement as the primary cause of intellectual property theft.

"A lot more work needs to be done on enforcement," said Guy Sebban, head of the International Chamber of Commerce, the umbrella organisation for national chambers.

Counterfeiting and piracy exact costs, including lost profit, exceeding $100 billion a year and can endanger health and safety with goods such as medicines, according to the U.N.'s World Intellectual Property Organisation (WIPO).

The report was issued ahead of a two-day U.N. conference in Geneva this week where corporate and law enforcement officials will stress problems with faked "everyday items" such as food, toys, cosmetics, drugs and batteries — as well as music, movies and branded luxury goods.

It cited emerging economies India, Brazil, Indonesia, Vietnam and Pakistan as "bottom-performing countries" while the United States, Britain, Germany and France were lauded as most stringent, followed by Japan, Canada and Switzerland.

The United States has warned China that it could take action at the World Trade Organisation (WTO), which Beijing joined in 2001, if it does not take firmer action to protect intellectual property rights.

The issue is also one of the stumbling blocks to Russia's joining the 150-state world trade referee.

Sebban said companies are trying to "stay a step ahead of the pirates" and added stricter controls in lagging countries were needed to stop dangerous or ineffective products from reaching world markets.

"We need to educate policy-makers that greater investment in (intellectual property) enforcement will translate into more jobs and tax revenues, and also help them in the fight against organised crime," he said.