Investigation: The Dangers of Using Counterfeit Products in Oman

11 Nov 2018
POSTED BY Y Magazine

From dodgy designer gear to fake watches, the demand for phony merchandise shows no sign of slowing down. But what happens when the customer buys counterfeit goods touted as genuine? Team Y reports on this growing problem that not only rips off consumers and companies alike but also threatens people’s livelihoods and lives.



As the saying goes; if you’ve got it, flaunt it.

But how far would you go to show off both your affluence and great taste?

As it turns out, some of us are happy to wing it with cheap, ‘knock-off’ products of revered brand names.

Walking into a party, strutting like a top model down a catwalk, is our first interviewee of the night.

Swathed in a chic designer dress and flaunting the latest ‘must-have’ watch, handbag and heels, she knows she’s the centre of attraction – and she’s loving it. 

While those around her are well aware of her high-flying “influencer” status and her rich lifestyle, they don’t know the only think faker that the followers she’s bought on social media is her entire outfit.

Photo for illustrative purposes only.

In truth, what should have cost her upwards of RO6,000 only cost her a paltry RO150, and the boutique stores she claims to visit are not ones that you’d normally see. Instead, the one she frequents is in a dingy corner of Ruwi High Street – a locale that has developed into a one-stop shop for fake goods in the capital.

While we can’t reveal the social media star’s name, we’re taken on an exclusive tour of the largest wardrobe we’ve ever seen – where she shows us the shops she visits to buy goods.

The possibilities are endless – everything from ‘Armani’ suits to ‘Patek Philippe’ watches can be bought for a nominal charge. “Here,” as one shopkeeper says, “Everyone’s a winner.”

Our friend nods along.

But she appears to be unaware that what she’s purchasing from these shops is a part of a worldwide scam and by knowingly buying their goods she’s becoming an abettor to fraud.

This becomes more serious, however, when we learn that what’s being sold in these shops is now trickling onto the premises of more reputable retailers, who sell these goods openly as originals… for a higher price.

And this is becoming a matter of concern for the country’s consumers.

While strictly governed items such as designer watches and electronics are difficult to replicate,  in a recent ‘sting’ , Y found that several retailers have been getting away with selling fake products – some of which include designer handbags, clothes, cosmetics, food items, and even car parts – all disguised as originals.


What is a ‘counterfeit’ product?


For the most part, the consumer won’t realise the difference between the products, but in the case of car parts, cosmetics, and food items, our source at the Public Authority for Consumer Protection (PACP) says that buying a fake product could mean the difference between life and death.

The official tells us: “Times are changing – the difference between a real and a fake is minimal. So, it’s very important for us to define what an original manufacturer’s product is and what a fake is.

As defined by media firm Springer Science+Business Media, fake products – also widely known as counterfeit consumer goods – are goods, often of inferior quality, made or sold under another’s brand name without the brand owner’s authorisation. Sellers of such goods may infringe on either the trademark, patent or copyright of the brand owner by passing off its goods as made by the brand owner.

But there’s more to it than just that, says our source. “There’s a difference in the process of manufacturing of the counterfeit products – and that can determine how legal proceedings will take place.

“In a regular store that’s being upfront with their items, they may say that the goods are of first- or second-grade. This essentially dictates the price of the item, but for us who govern the ‘Intellectual Property Rights’, this can mean very different things.”

As per the World Intellectual Property Organisation (WIPO) – a United Nations affiliated governing body that aims to protect the rights of trade – Intellectual property rights are defined as the law that allows creators, or owners, of patents, trademarks or copyrighted works to benefit from their own work or investment in a creation and safeguard it from unlawful infringers.

“So, what that means is the producer and seller of the first-grade copy of a product – one that would almost entirely resemble the product inside and out – will be eligible for prosecution.

“The case with second-grade products and other lower classes is that they may not make use of the logo of the brand or may not possess the key characteristics of the product they’re trying to imitate. This can get a bit sketchy, as it then becomes a bit harder to prosecute.

“But, the underlying fact is that fake and counterfeit products are illegal in this country – and we’re doing everything we can to control the inflow of such items.”


Where do counterfeit goods primarily come from?


During our meeting, he also reveals that most counterfeit goods are shipped in from countries such as China, Thailand, India, the Philippines, Sri Lanka, and Bangladesh, and enter through the Sohar and Salalah ports.

Sameer Shah, an intellectual property attorney working with a leading law firm in Oman, is leading the fight against counterfeit products here with more than 150 successful cases under his belt.

In an exclusive interview with Y, he says: “Fake or counterfeit goods are the bane of any business or patented product. The issue with it is that it spreads like wildfire – and it will only continue to increase worldwide as time goes on.

“The reason for that is demand. Just like how the demand and supply chain works, it has the same mechanics for the counterfeit market, too. Thankfully, however, Oman is one of the few countries that has recognised the Intellectual Property rights and has enforced it (in 2001).

“But 17 years on, we still see that such goods are openly entering and being sold within the country. And even though there are strict actions taken against violators by the PACP, there seems to be very little that is being done to prevent it from happening.”

He’s right – Oman’s problem with counterfeit products hasn’t just increased; it has surged past international standards. The number revealed by the PACP show that confiscated goods alone saw a staggering 2,000 per cent increase – from 34,461 in 2012 to 814,276 in 2013.

“The PACP hasn’t drawn up the latest stats since then, but you know that the numbers are only increasing as the population and the demand increases. It’s a proven fact all over the world,” the lawyer says.


The implications of this phenomenon


Yet again, his statement stands true, as we learn from the WIPO report that the counterfeiting industry has grown more than 10,000 per cent over the past two decades alone – a monumental growth that has led to the loss of nearly 2.5 million jobs worldwide in 2014 as per data collected by the International Standard Organisation (ISO).

More worryingly, the ‘Global Brand Counterfeiting Report 2018’ sheds light on the fact that counterfeiting now stands as a 1.2 trillion-dollar industry – which is greater than the market value of tech conglomerate, Apple (the only trillion-dollar company).

Our constant efforts to consult leading international retail chains to talk about this topic is met with silence and skepticism, with one fashion brand even touting our efforts as ‘valiant but one set up for failure to address the issue’.

The lawyer Sameer Shah weighs in: “The e-commerce industry is the greatest supporter of this industry. The inception of websites and applications also resulted in a boom in counterfeiting as the world suddenly became a smaller place.

“So, anyone who wants to purchase a product will order it online or send a message and have it delivered at their doorstep in a few days – that’s the power of technology.

“In Oman, we witness imports ranging from high-end cosmetics, electronics, and so on being shipped. And it is international companies (names of companies withheld) that connect the manufacturer, the supplier, and the buyer together.

“The problem then is the verification of the authenticity. We have a lot of consumers sending back their items or reporting to the PACP about how they were scammed with a fake product for the price of a real item.

“These, as you would know, are great concern. Imagine waiting eagerly for an iPhone and then receiving a fake device that looked like one and ran Android. I deal with a lot of those clients.”

Say hello to the HiPhone – the fake iPhone

Sameer reveals how in 2016 he had helped an Asian national retrieve his RO240 that he had paid for a China-made imitation smartphone to the Korean-made Samsung Galaxy S7 Edge.


The dangers of buying fake goods, food, and equipment


But the PACP reports that it’s not just these items that are being counterfeited and affecting the lives of the buyers. Fakes of electronic items such as switches and fuses can result in house fires. In 2015 alone, 70 per cent of all home fires were pegged to electrical faults – and these can result in loss of life.

Justin Fernandez, an electrical engineer with a government firm, says that the consumer must be careful when they buy electrical items. He says: “Always insist on going with your building contractor and engineer when buying the equipment for your house or office.

“There are plenty of retailers that are out there pushing fake and sub-standard products as original – and that’s a recipe for disaster.

He then advises: “Before you purchase the equipment, you can always cross-check the model number of the device (which will be printed on the back of the cover or inside the module itself) with what’s printed on the box. Also, you must always look for a hologram of authenticity to verify the product.

“Even so, these holograms itself can be fabricated. So, really, you’re at the mercy of the supplier. Never hesitate to go with a reputable seller. They may charge more but their products will be of excellent quality,” he adds.

But our source from the PACP tells us that one of the greatest reasons for the success of counterfeit products in Oman is the obliviousness of the customer to the basic rules to take care when purchasing products.

“When you’re buying a product here, not many people look at the labels or the covering; they simply just look at the brand and buy it.

“This is dangerous practice, and especially when you’re buying food products.

He then points out an example from 2014 when his team cracked down on spice imports from India by reputable brands, which were adulterated with edible, coloured powder.

Also read: How to spot counterfeit products when shopping online or in Oman

“We had received tips from international agencies – mostly from Asia – that several packets of chilli powder were laced with coloured powder, and the expensive packets of saffron had been replaced with parts of dried beetroot.

“While the raids we conducted were taken very seriously, we came across several packets of fake chilli powder being sold in local Asian shops but we couldn’t prove the dried beetroot theory.

Then in 2017, rumours of plastic rice manufactured in China were circulated over social media. However, the PACP debunked the case and assured customers of the quality of the products sold in the retail outlets.

“Residents of Oman needn’t worry about fake rice,” laughs the PACP official. “We’re constantly monitoring imports and will crack down on any offenders. But, one item that you must be wary of is honey. There are lots of manufacturers that blend honey with sugar or rice syrup to gain the flavour and texture.”

“Always rely on reputable brands,” he adds, before stating that as per the current law, manufacturers and sellers could face jail terms of up to two years and fines as high as RO2,000 if found promoting the practice of counterfeiting.

“The punishment and the fines vary depending on the product that the person is selling. For instance, items such as smartphones, watches, clothes, etc. that do not fall under the category of unfit items for personal use won’t receive the strictest penalty, but the seller could still face suspension of their business licence and also face a penalty of up to RO1,000.

“But items that can cause personal harm – like cosmetic products, food items, electrical equipment, and automotive parts – will be taken up immediately and the seller will certainly face jail time,” he says, citing the Article 2 of the Consumer Protection Law, which prohibits producing, manufacturing, offering or distributing counterfeit goods or practising or attempting to practise deception, publicity or fraud to market such goods by means of advertisements, publications, posters, flyers or any other means.


The world of fake car parts


Our investigation takes us to Mabelah, the automotive hub of the country. There, we visit and interview numerous garages to check for counterfeit tyres, car batteries, and other items such as brake pads and discs that can cause accidents if they malfunction.

To our surprise, several shops offer us fake brake pads for less than half the price of an original. For instance, the cost of a single brake pad on a Nissan Maxima is RO34, but a shop in Mabelah offers us the “same quality” product for RO12.

We refuse the product when the mechanic cannot offer us one with a certificate or sign of authenticity.

Ryan George, a regional claims analyst and an engineer with a leading automotive brand operating from the UAE, talks about the implications of fake products on cars. He says: “In September, this year, we came across an incident of a man whose SUV smashed into the concrete divider on the Sultan Qaboos Highway.

“The freak accident took the car, but more importantly, his life. But, when I had investigated the incident for insurance purposes, we learnt that the driver – to save a few riyals – had installed counterfeit brake pads.

“For that very reason, he lost his life. Can you imagine the turmoil he left his family in?” he asks.

“Cars are heavy machinery that must be cared for in the most professional manner. Otherwise, they can malfunction. Only an engineer who knows the workings of a car will ever know the pain that has gone into the research and development of a car part.

“Even something as simple as a wiper blade has a lot that has gone into it to become aerodynamically efficient and durable. So, think twice before you begin opting for cheap parts.”

During our discourse with the PACP official, we ask him: “Why are such rogue garages still not being cracked down on – and how can one report such activities to the authorities.”

Taken aback by our allegation, he asserts: “It’s the joint duty of the residents of the country and the government bodies to work together to fight this problem. There’s no point pushing fingers at the PACP alone.

“We are doing everything we can to make life for the consumer easy – and it’s now up to you to support us. One of the main reasons why such garages go unnoticed is because the people are duped by the garages; they think they’re buying the real product.

“So, there’s nothing for them to suspect. However, once you have your suspicions, you must reach out to us. And it couldn’t be any easier than it already is,” he declares, before opening up a website on his laptop.

“To begin the process, you need to first log on to pacp.gov.om and click on the ‘Complaint and Suggestion’ tab. There, you’re required to feed in your basic information, details of the supplier, and the aspects of your complaint.

Alternatively, you can also contact the PACP through the consumer lines – 8007-9009 or 8007-7997.

“Once that has been done, we’ll conduct a case study to see whether the complaint stands or not. For this, you’ll need to wait until one of the team members reaches out to you. But never lose hope – the customer will be given justice.”

The website even features a ‘Complaint of the Week’ segment to motivate consumers to share their experiences with the
government body.

That said, the PACP, ROP, and other anti-counterfeit agencies conduct frequent raids to crack down on illegal imports of counterfeit products into Oman.

In one of its most prolific raids in late 2016, the PACP found fake medical equipment, medicines, watches, fabrics, and other electronic items that amounted up to a colossal RO2million – and since then raids have been frequent.


How do fake goods enter the Omani market?


In a brief interview with the Royal Oman Police (ROP), we learn that aside from being smuggled into Oman through the legal cargo services (in small numbers), fake goods can also be brought in over the borders and by sea, illegally.

The ROP official says: “The ROP customs cracks down on any illegal activity that takes place in the borders of the ports. But, what one must bear in mind is that sometimes these items are mixed in with original items and smuggled in.

“Then there’s entry by sea. Sometimes, these transactions take place over sea and the item is then taken in by local boats here in the country. And because the coastline of Oman spans over several thousands of kilometres, it’s not always easy to catch the culprits.

He reveals: “Also, there are middlemen that act from within Oman to procure the product. This is who we’re trying to nab right now – if these people are afraid of being caught, then there would be lesser people operating to bring these items in. That’s the challenge now.”

But this is not an opinion shared by all.

Salwa al Rawahi, an HR executive working with lawyer Sameer, has a relaxed view about fake goods.

She says: “I don’t see anything wrong with people opting for such goods. Each to their own – and if somebody wants to wear a fancy Armani suit or a Rolex watch, they should be able to do so without spending as much, too.

“This whole idea of brands having a monopoly over the market is a capitalist idea that favours the rich and it shouldn’t exist in today’s world. We’re living at a time when we’re slowly scrubbing away such attitudes, so yes, I wouldn’t mind buying one of these items,” she adds, before insisting that she has never purchased a counterfeit product herself.


In conversation with a fake goods seller


Ali*, a shop owner for counterfeit handbags and watches stands by his trade. He says (translated from Hindi): “For the people that pass by us looking at us in anger, all I have to say is that this job is putting food into the mouths of several people.

“Yes, what we’re doing isn’t morally right and we regret it. But, we were pushed into this life to make a living; not so that we can challenge the big companies in Europe and USA.”

Even as we speak to Ali, he manages to sell two watches for RO40, each, to a customer who haggled to bring the price down from the original cost of RO65.

“This is how good our product is – people don’t mind spending RO40 for a fake watch. Our products are almost as good-looking as the real deal. It’s something that manages to create loyal customers.

“And only if you’re a loyal customer will I openly sell these items to you. Otherwise, it’s hidden away in our compartment.”

When we tell Sameer about this encounter, he looks at us and shakes his head. He then answers: “This is what infuriates me; justifying counterfeiting and selling fake goods in public.

“You see, I’m aware of how great the products are. But no matter how expensive the product looks or how effective it is in the market, priority must be given to the players who have taken decades to set themselves up.

“Fake clothes, watches, handbags, and even smartphones have become so close to the original that you can’t tell them apart unless you’re an expert. So, if that’s the case, why don’t they create their own design and make their own product under their brand name,” he asks.

“The counterfeiting industry has become so large in fact that it has killed the creativity in the markets – and it has completely ruined industries. Now, it’s just a matter of who makes the best fakes.

“Intellectual property rights are gained by the marks of the blood, sweat, and tears of an individual or the staff of a company. By forging that, you’re robbing them off their years of hard work.

“If you’re alright sleeping with that load on your shoulders, then carry on doing it. But, the solitude of jail will soon clamp you down. Be prepared.”


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