New York to crack down on buyers of fake luxury goods

The sale of faked luxury consumer brands at apparently throwaway prices is not unique to India – the city of New York today decreed new rules to control the sale of items falsely branded as 'Prada', 'Louis Vuitton', and so on.

Experienced shoppers can buy handbags going for $2,000 on Fifth Avenue for perhaps $20 in Chinatown.

Until now, the law enforcement focus has been on catching the sellers. But if a proposed bill passes the NY City council, customers caught buying counterfeits could be punished with a fine of up to $1,000, or up to a year in prison.

The legislation, if passed, would be the first in the United States to criminalise the purchase of counterfeits.

Council member Margaret Chin, who introduced the bill, said at a public hearing Thursday that counterfeits deprive the city of at least $1 billion in tax revenue a year, which could be used to support community improvements.

Furthermore, Chin claimed the counterfeit goods trade has been linked to child labour and the funding of organised crime and terror groups.

"For tourists it's fun, it's a bit of adventure. But we have to let people know that if you engage in this activity you are committing a crime," Chin said.

Reports from the ground say that names like "Rolex!," "Chanel!" are whispered to passers-by.

Potential buyers are then walked to a designated spot, where they're quietly shown photos of the desired goods. Choices are then signalled to another person who disappears to an undisclosed location - a vendor's back room, a nearby apartment or even the back of a van.

The item arrives within minutes, and cash exchanges hands.

The counterfeit vendors are also a hassle for those who live in the area, says John Hagen, a resident there for the last 30 years. He says the counterfeit vendors have ruined his block.

"I walk out of my house every day into it," he says. "I'm sick of what this has done to our neighbourhood."

Some at Thursday's hearing were concerned about how the new law would be enforced and whether it would hurt both businesses and buyers.

Among them was Kathleen McGhee, director of the Mayor's Office of Special Enforcement and the official in charge of the sting operations that have closed down 40 illegal stores in Chinatown since 2006.

She testified against the bill, saying that showing a customer had knowledge that the goods were counterfeit will be difficult to prove in court.