Assessing CSA’s Counterfeiting Activities - Pt.2

September 11th, 2013

[NOTE:  As of 17 September, 2013, the CACN website has been deleted and as a result the numerous CACN links contained in this article are currently non-functional.  Update here.]


As RestoreCSA reported, the CSA was recently caught running one of Canada’s most prolific and longstanding counterfeiting operations.  For nearly a decade, from 2002 - 2010, the CSA was selling fake product safety certifications.  The products they illegally certified cannot be used, the purchasers having to absorb financial losses.  The CSA was making money by victimizing Canadians from coast to coast.

We also noted that in 2006, at the height of CSA’s counterfeiting activities, they helped found the Canadian Anti-Counterfeiting Network (“CACN”).  Curiously, the CSA is still a board member of the CACN. 

Why is one of Canada’s most prolific counterfeiters on the board of an anti-counterfeiting entity?  What a good question.  We sent CACN a letter, asking them as follows:


The presence of a counterfeiter on the steering committee of an anti-counterfeiting organization is very damaging.  It has been nearly two years since the CSA counterfeiting story made headlines and yet the CACN does not appear to have taken any action against CSA.  Indeed, the CACN’s website lists the major counterfeiting news stories back to 2010, yet it omits any mention of CSA’s counterfeiting activity.  The impression resulting from your inaction on the CSA file is not beneficial to CACN.

The situation would not be so precarious for CACN had your organization not been so aggressive in its anti-counterfeiting statements.  The CACN has specifically labeled unauthorized certifications as “counterfeit.”  The CACN has made no allowance for managerial ineptitude, instead endorsing zero-tolerance policies for all counterfeiting operations.  The CACN has referred to actions taken by CSA and other counterfeiters as “criminal” in nature.  The CACN has demanded “imprisonment” for the staff of counterfeiting organizations.  Your organization has been decidedly militant in its posture against companies like CSA. 

There appears to be a substantive and material disconnect between the public statements of CACN and the managerial conduct of CACN.  We would like to resolve this disconnect.

It is our view that the presence of CSA on the Steering Committee of CACN or, for that matter, any such position of influence over CACN, is entirely incompatible with the purpose and mandate of CACN.  We would appreciate receiving from the leadership of CACN their written commitment to facilitate a vote at the Steering Committee on the expulsion of CSA from the CACN Steering Committee, and any other formal or informal CACN organs, to be held at the earliest practicable date.


In response, the Chair of CACN, Mr. Wayne Edwards, “acknowledges receipt of your letter” and advised that it would be “inappropriate for CACN, or its members to comment” on the matter. 

Its “inappropriate” to take immediate action against a counterfeiter on their own board?  Really?  This is the same CACN that demanded Parliamentary action against counterfeiters as “a matter of urgency.”  Brian Isaac, former Chair of CACN, told Parliament that “Canada needs to take legislative action that is already way too long overdue,” and further demanded passage of strong anti-counterfeiting legislation “as soon as possible.” 

The CACN seems genuinely interested in quick action against other counterfeiters, provided their own counterfeiter isn’t held accountable.  Or is given immunity from litigation.  And as for what’s “inappropriate,” its hard to imagine a more “inappropriate” action as keeping a counterfeiter on the board of an anti-counterfeiting organization.

Its worth noting that the CACN publicly bragged about “educating Parliamentary members on the perils of counterfeit products.”  The CACN gave testimony to the Standing Committee on Industry, Science and Technology in October of 2012.  Mr. Edwards seemed quite pleased with his performance; “We were successful,” he said, it “was well received.”

But why does Parliament consent to being “educated” on the evils of counterfeiting by a group that won’t even shut down counterfeiters on its own board?  And “shut down” is exactly what they demand of others.  “We urgently need to equip rights holders, law enforcement officials, and prosecutors with robust legal tools to shut down those who enable or facilitate piracy” said the CACN’s Chair of the Board in 2010.  That’s the same year their board member was caught counterfeiting.

So is this ambivalence to counterfeiting activity merely a curious attitude of the Chair of CACN, or is it common throughout CACN’s board?  Well, RestoreCSA sent letters to each of the other CACN board members, advising of the situation and requesting their response in preparation for a vote to remove CSA from the board.  We received no responses.  At all. 

Meanwhile, Canada’s conspicuous counterfeiter happily continues their fight against everybody else.  “CSA group welcomes the Bill,” said RJ Falconi, EVP at CSA, as it “provides much needed new tools for CBSA officers to proactively stop harmful counterfeit goods before they enter Canada.”  And CSA’s own counterfeit safety stickers were applied, by CSA no less, to products that didn’t meet Canadian regulations.  In CSA’s jargon, they were “harmful.”  Falconi continues; “Use of these fake products can put consumers at real risk of injury or death, particularly products that have not been tested to safety standards and bear fake CSA certification marks.” 

Wow!  Did you catch that?  It was CSA that was selling fake CSA certification marks.  And they affixed the fake safety certifications on products for import to Canada.  And the products did not comply with safety regulations, they were “harmful.”  And this CSA executive just warned the public about CSA’s own certifications. 

Ultimately, the CSA’s Falconi wanted “stronger legislation” in order “to help stop the proliferation of dangerous counterfeit goods” like CSA’s.  The CSA applauded the proposed changes to legislation because it would “give customs border officers the legal authority and discretion to search for, examine, and temporarily detain” products that are “suspected” of being CSA certified.

The CSA’s Anthony Toderian helpfully adds that the CSA Group “works closely with law enforcement organizations” in order to “stop the distribution of counterfeit products that may bear a fake CSA Group certification mark.”  Um, right.  But he continues, “A legitimate mark lets consumers know that a product has been tested to the applicable standard for safety and performance.”  But they weren’t “tested” to the standard.  They didn’t comply with safety regulations.  And the stickers weren’t a “legitimate mark.”  In light of CSA’s longstanding counterfeiting operations, Mr. Toderian lacks the credibility from which to make such sweeping reassurances. 

Counterfeiters like CSA “know that in order to fool consumers into thinking products are certified, they must fake not only a brand name but also a certification mark.”  That’s good advice from CSA, a company that knows all about fooling consumers with counterfeit stickers.  In this, RestoreCSA agrees with the CACN in their statement that the “CSA exemplifies the increasing problem with counterfeit and pirated products internationally and in Canada.”

RestoreCSA has been researching the activities of CSA, and in every new revelation, with every discovery of CSA activity or statement or position or testimony under oath, the CSA story gets more sordid, their position more tenuous, their management more culpable.  At RestoreCSA, our intention is to recover the CSA organization to its regulatory purpose and to expunge from its framework the engagements and the persons who have so badly compromised its credibility.

PREVIOUS REPORT

June 12, 2013
August 26, 2013