 Welcome to the introduction to the Interpol Organized Crime Funding and Intellectual Property Crime Module. As we have seen in earlier modules, almost every commodity is subject to counterfeiting. The prime motive is to make money for the illegal producers and distributors. Often their profit margins are far higher than those of genuine producers, as they have to bear few of the associated costs of running a lawful enterprise. The following example from the UK is illustrative of the profits organized crime can make. While no proven figures are available, the December 2006 Gower's Review of Intellectual Property estimated that criminal gain from IP crime in the UK was worth 1.3 billion pounds. Organized crime was responsible for 900 million pounds of this figure. Many but not all counterfeit products are made in one country and shipped clandestinely to others. It was inevitable that well-established crime syndicates accustomed to trafficking in high-risk products would use that same expertise for contraband IP goods. Not only were these products often beneath the profile of those conducting risk analysis, but if they were checked and confiscated, there was unlikely to be a high-profile investigation or prosecution. Usually the goods were simply confiscated and destroyed. The organized syndicates quickly realized that the risks associated with IP infringements were far lower. That reason, coupled with a demand for counterfeit products, which was borne in part from advertising, sponsorship and promotions by many multinational companies, led to an almost perfect product. It was one that was cheap to produce, did not lead to severe criminal penalties and could easily be sold in a large number of countries. The rise in profits has in turn led to an expansion of activities and investment into fields such as the Internet, which were previously relatively crime-free. This has led to the recruitment in some circles of highly skilled computer specialists, hackers and program writers, who develop such things as phishing programs, as well as what can only be called criminal websites, offering all manner of products from music and films to fake pharmaceutical and lifestyle drugs. Another type of website affects all the copyright industries to a very large extent. These are some of the so-called bit-torrent sites, themselves a development of earlier illegal download sites, but using specialist software to enable rapid downloads of large files. At first glance, these bit-torrent sites, and there are many, appeared not to have been developed by organized crime syndicates. But closer examination reveals that they often do fall within the definition and the characteristics previously outlined. These sites, normally offering free access to books, films, games, music and software, sell themselves to potential consumers by offering, they claim, the altruistic exchange of media by like-minded individuals. That most of this product is protected by copyright is ignored. The sites often hosted in jurisdictions where strong IP laws do not exist are almost always financed and run by a group of individuals who, although invariably denying it, have as their core motive the making of money. They are able to finance these sites by selling advertising space based on the number of visitors to the site. Recent investigations have shown that millions of dollars can be made in this way. The profits from counterfeiting and other forms of criminality pose a threat to OCGs, and they're obliged to launder the proceeds. This can take many forms, but often it is used to finance other criminality. In London, a group of Russian criminals known to be involved in counterfeiting music in films use the proceeds of piracy to finance a credit card cloning scheme. As we have seen earlier, it is difficult to assess the true extent of global counterfeiting, but some products are fairly easy to value by conducting market surveys. As an example, if we examine the price of a pair of fake trainers in a typical European market, we can reliably estimate that the profit margin is around 14 euros. Shoes are generally shipped in containers, which can hold around 5,000 pairs. Thus, it is estimated that the profit for each container is around 70,000 euros. In Section 2, you learned about the interconnectivity of organized crime and how it creates an underground economy. Click on the circles below for additional information. Interconnectivity. Organized criminality is global in scope and aspiration. In some countries, it is able to operate with seeming impunity, while in others it operates in a more covert fashion. That different syndicates cooperate to their mutual economic advantage is beyond dispute. Often they will operate through a network of companies and intermediaries who are able to provide seemingly genuine invoices, receipts, shipping documents and other necessary paperwork for masking purposes. Underground economy. Almost every commodity is subject to counterfeiting. The prime motive being to make money for the illegal producers and distributors. Often their profit margins are far higher than those of genuine producers, as they have to bear few of the associated costs of running a lawful enterprise. Knowledge check, Section 2. Instructions. 1. Select the best response for each question and click submit. 2. Click next question to go to the next question. 3. At the conclusion of the knowledge check, if you do not pass, you can click review to view the correct answers and retry quiz. If you pass, click finish to continue with the module. Click the next button to begin the knowledge check. Thank you and well done. You have just completed the organized crime funding and intellectual property crime module.