Considered “the heart of Latin America”, Bolivia is a country that shares its borders with several countries, most of which are also affected by informal markets and smuggling of fake goods.
More than 80% of the stores in the country are informal and contribute to annual loses to the economy of 2 billion dollars a year.
José Romero Frías, Senior Legal Advisor for the Bolivian National Chamber of Commerce, delves into this particular problem in an interview with Brands+.
What is Bolivia’s current situation regarding intellectual property infringement, informal markets and smuggling?
Bolivia is a country that has a singular characteristic: it’s a country that has a very high rate of informal trade, more than 80%, and that makes it very difficult to control the concept of intellectual property, brands, industrial models, etc. In this informality there is a lot of contraband, which is valued at more than 2 billion dollars a year in all sectors of the informal market, so this makes monitoring and persecution very difficult.
On the other hand, the regulations that we have are not specialized and we have to rely on decisions made by the Andean community, for example, for industrial property issues, which also happens to be something that lowers the level of control possibilities while we try to create better conditions for entrepreneurs.
The intellectual property has, at least from our point of view as the National Chamber of Commerce, a very favorable condition for entrepreneurship and therefore the better the conditions, the better the quality of the products we are going to have. And that affects citizens. Citizens used to better quality products will also have a positive vision of intellectual property, but unfortunately informality makes all that fade away along with the opportunity to create awareness about the importance of intellectual property and improve the conditions of everyone.
People also have this view that no one is getting hurt when you produce fakes of goods. We know that this can happen in clothing, but when we start talking about medicine or products that can harm a person, that changes their point of view, so we have to focus on those.
We also know that people who work in smuggling and counterfeiting are clusters, they are people who are criminally related to each other, and as the public and private sector are divided, that greatly damages the work done to fight against those clusters.
We have not been able to work effectively together in the past five years; we know that Customs is making an enormous effort to work on anti-piracy behavior, against counterfeiting and smuggling, but it also lacks technical elements, so Senapi is not working in a coordinated manner with Customs and that is a big issue. We are trying to get Customs, Senapi, judges and the prosecution to begin to interact with each other, but we do not have a State coordinator to help us manage this, most of the work is coming from the private sector.
What are the products that are being faked the most and then sold in these illegal markets?
Counterfeits of books, music and software in Bolivia is what is being affected by million dollar loses, but what’s worries us the most in Bolivia is the public health issue, meaning medication. Medicine is sold in retail spaces that are not designed to sell medication, not in pharmacies, but in the streets.
One thing that worries us a lot as the National Chamber of Commerce, and as an example, in La Paz we have gathered information on the number of informal workers in the city center: 60,000 people work informally selling things. We have discovered that there were five families who smuggled and distributed everything from CDs, movies, medicine, cigarettes, candy, etc. We have made a formal complaint to the mayor’s office and the municipality is working on registering all informal merchants. We are now up to 20,000, so we still have 40,000 who are selling without a certificate or operating license from the municipality and that is a big problem.
The same happens in Cochabamba and Santa Cruz, which are central and important cities in terms of commerce and merchandise. Most of the contraband goes to these cities, and also to Beni, which borders Brazil. Most smugglers go through Bolivia to get to Brazil and its much largest markets, so we have a lot of problems. Bolivia is a country that borders many countries, so the issue is a shared one.
In this regard, what Latin American countries are doing things right?
As a Chamber, we think that countries such as Uruguay or Colombia are countries that can give us very positive messages about how they are handling the issue of intellectual property, intellectual property legislation and the vision of this institutional work in order to improve the conditions for entrepreneurs. Peru is starting to work on the issue and Paraguay is also working hard.
However, the Andean Community of Nations is also an example in which we can accommodate ourselves, because Bolivia has the particularity of being a hinge between gigantic markets: the Andean Community and Mercosur. Then we can speak with property about both because we see them and participate with them, but we are not being relevant. So for the National Chamber of Commerce and for institutions, the challenge is to start looking at things together, work together, to try and patent a struggle we had achieved until 2008.