Counterfeit Goods Linked to Al Qaeda

From knockoffs of designer Kate Spade handbags to pirated DVDs, Al Qaeda and other terrorist groups increasingly are turning to counterfeit goods to fund their operations, lawmakers were told Wednesday.

The global trade in counterfeit goods is estimated at $400 billion to $450 billion a year, said Ronald K. Noble, secretary general of Interpol, the organization that coordinates information among law enforcement agencies in 181 countries.

Noble did not have any figures on what percentage of funds may be going directly into the hands of terrorists, but he told the House Committee on International Relations that police agencies are “seeing the connection between terrorist financing and intellectual property crime.”

He pointed to counterfeit cigarette trafficking by paramilitary groups in Northern Ireland and profits from counterfeit CDs and other goods being funneled to Hezbollah in the Mideast.

Noble said some supporters of Al Qaeda have been found with huge amounts of counterfeit items.

“If you find one Al Qaeda operative with it, it’s like finding one roach in your house or one rat in your house,” he said. “It should be enough to draw your attention to it.”

Larry Johnson, a consultant on counterfeiting and money laundering, testified that sources of state-sponsored terrorism are disappearing, leading terrorist groups to pursue other avenues.

Committee Chairman Henry J. Hyde (R-Ill.) said that “should make you think twice before buying that knockoff purse or a fake CD.”

When asked how Americans might tell the difference between counterfeits and the real thing, Asa Hutchinson -- Homeland Security undersecretary for border and transportation security -- said price is a good indication.

“If you’ve got a CD on the street corner selling for a dollar, that ought to raise some suspicions that maybe this is not on the up and up,” Hutchinson said.

Nearly half of the fake handbags, video games and other goods seized in 2002 came from China, and more than one-fourth came from Taiwan, he said.

Some of the fakes were showcased at the hearing, including Levi’s jeans, batteries, extension cords and Christmas lights.

Noble testified that, in general, law enforcement around the world has not made counterfeiting and piracy a high-priority crime. He said the focus is often on seizing the goods, and not on investigating who might be receiving the profits.