Commercial Counterfeiting in Yemen [Archives:2000/43/Business & Economy]

Yasser M. Ahmed
Yemen Times
The commercial competition has been tough because of the adoption of free market economy and the progressing commercial globalization in many countries all over the world. This competition works in favor of the industrial countries.
Wherever markets are open and amounts of products are huge, commercial counterfeiting becomes common in those markets especially when the control system is ineffective.
As a third world country, Yemen tried in the nineties to have a different economic policy and be open to the rest of the world by encouraging foreign investors to invest in Yemen and letting private sector have a bigger role in the countrys economy.
This has been enhanced by the governments administrative, financial and economic reform program since the beginning of 1995. The main features of this enhancement were the lifting of restrictions imposed on foreign trade, canceling all administrative formalities and the change towards free market economy. In the meantime the control system is still ineffective, the mechanism and tools of which are still unable to catch up with the changes. All that led to the increasing of the commercial counterfeiting phenomenon.
In the conference held in Sanaa from the 16th -19th of Sept. 2000, many papers about commercial counterfeiting were discussed and all stressed on the bad effects it could have on the countrys economy.
One of the papers summarized the different factors that led to counterfeiting in food and medical supplies. Those factors are:
Long coast line and land border. The long coast line of more than 2000 km and the long land border of about 150 km shows the ease of smuggling goods into the country.
Consumers unawareness of the bad effects those smuggled goods could have on the consumers health and other bad effects on national economy.
The declination of the individual income in Yemen. Researches have shown that more than 31.5% of the population live in poverty. So counterfeiting revenues become an encouraging factor to improve their living conditions to a great extent.
The paper presented by the customs office revealed some external factors like the huge amounts of expired products present in the neighboring countries which need to be disposed.
Some factories in India, Pakistan and south east Asia producing low quality imitated products need to be disposed and the Yemeni market looks like the place for those goods The paper revealed the total number of smuggling cases from 1st Feb. 1999 to 31st Jun. 2000 to be 72.
The paper presented by the Yemen Drug Company stated that the needs for medicine in Yemen can be identified through:
1) Locally produced medicines that can cover some of the markets needs. There are three local factories producing medicines to cover part of the local market needs. The Yemen Drug Company itself covers about 30% of the markets needs by producing 66 different types of medicines.
2) Medicines being imported from Arabic and other foreign companies. The local medicine market deals with about 293 such companies, see the table below

CompaniesGross sent to
the Yemeni
market in
Dollars
Egyptian companies15,287,298
Swiss companies9,096,848
British companies 8,740,518
3) Smuggled medicines cover about 25% of the local market needs.
The paper presented by the ministry of health revealed the true dimensions of the problem and showed the ways of medicines counterfeiting by refilling medicine bottles with expired medicines.
With this chaos in the local market, newly founded departments cannot be blamed for not being able to keep the situation under control like similar departments in other countries. For example , the Yemeni organization for standardization , metrology and quality control had suffered difficulties since it was established until the end of 1999.
The paper presented by Dr. Abdul. Momen Shujaa Al-Deen, teacher in penal legislation in the university of Sanaa, referred to the excellence of legislation in Yemen, the implementation of which needs an efficient executive power. He also mentioned the penalty in the case of counterfeiting which is not more than a year in prison or an amount of fine to be paid.
The paper also stated the governmental offices responsible for dealing with the cases of counterfeiting, and those are:
The Yemen Organization for Standardization , Metrology and quality control.
The ministry of trade and supply .
The office of preventing counterfeiting.
The ministry of structure , housing and urban planning.

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