NYC Debates Proposed Law to Fine For Counterfeit Purchases

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Sheet showing styles of counterfeit handbags available from a vendor in Chinatown.

Sheet showing styles of counterfeit handbags available from a vendor in Chinatown.

New York—At a public hearing today, members of the New York City Council debated a proposed bill that if passed would fine consumers up to $1,000 (or up to a year in prison) for buying counterfeit goods, such as handbags and watches.

Proposed by Council member Margaret Chin, the bill would make New York the only jurisdiction in the country that actually penalized those who knowingly buy fake merchandise.

Chin, whose district includes Chinatown, one of the biggest sources of counterfeits, claims that New York City loses at least $1 billion in tax revenue each year due to the purchase of counterfeits.

While there have been crackdowns on selling counterfeits, the sales continue, only more clandestine. Customers are taken to a designated spot where they are shown photos of the counterfeits available. Choices are then signaled to a cohort who disappears into a backroom, apartment, back of van etc. returning a few minutes later with the counterfeit item.

‘This Law Will Cut Down on Demand’

Chin complains that these consumers don’t patronize small business in the neighborhood. “This is not helping us, it’s just giving us a very, very bad image,” Chin said. “Hopefully, this law will cut down on demand.”

Arguing in Chin’s favor was Valerie Salembier, who heads the nonprofit Authentics Foundation which educates consumers about the counterfeit industry.

Salembier notes that in France, tourists are warned about fakes since counterfeit buyers “risks fines of up to 300,000 euros and up to three years in prison for the mere possession of a counterfeit item. It’s why they don’t have a big problem with counterfeits in France.”

Not everyone is in favor of Chin’s law. “In New York City, there is no real fine or law against buying a counterfeit good and this is a serious problem,” said Peter Vallone Jr., chair of the Public Safety Committee. “A year in jail is a little tough even for me, which is rare…I would absolutely consider making it a violation.”

Kathleen McGee, director of the Mayor’s Office of Special Enforcement, said she feared the law would deter shoppers from legitimate merchandise and suggested a public education program emphasizing the illegality of the sale and how money from counterfeits winds up helping terrorist networks or organized crime.

Chin hope to have the Council vote on the measure in the next few months.