Tuesday, February 3, 2009

Does the Sale of Replica Watches Sponsor Terrorism

There is prevailing rumor floating around the Internet about replica watches. Somehow the replica watch industry has been linked with world-wide terrorist organizations. Being involved in the replica watch industry now for over 5 years this would be news to me. To my knowledge there is no more of an identifiable link between replica watches and terrorism than there is between Iraq and weapons of mass destruction. Both ideas are constructed "facts" by a regime hungry for support of their policies.

, or "Fake", watches have been with us since the technological revolution in Asia in the late 1970s. Given access to industrial equipment and seeing the weakness in their governments to enforce trademarks of foreign nations (or their ability to look the other way) many entrepreneurs have sprung up to feed a need. Replica watch makers have produced literally millions of fake Rolexes, Panerais, Omegas, and dozens of other top-named watch brands.

Working on "off-shifts" in factories that would normally produce legitimate goods during the day these replica watch makers produce counterfeit goods of varying quality. Looking to sell cheap $20 souvenirs to curious vacationers? Watches can be produced with low quality (and low price) materials to meet this price point. Selling to the burgeoning "Swiss Replica" market in the United States and Europe? Then the materials and manufacturing methods go up a notch because of the higher margins.

The people are motivated solely by replica watch industry’s lure of easy and fast money. These watches are produced in volume and put into the hands of dealers and distributors around the world. As long as the governments where these factories are located (China, Thailand, Taiwan) are lax in their support of international trade and trademarks fake watches will remain a profitable seller for these manufacturers.

Like any other marketable good these watches will sometimes make it into the hands of people who have no connection to the original maker but may have some other agenda. But the percentage of these people in the replica watch industry is minimal. 90% of the people selling these watches have some direct Asian connection to the manufacturers, and are also approaching the enterprise as a business.

To my knowledge there is no more of an identifiable link between replica watches and terrorism than there is between Iraq and weapons of mass destruction.

Definitely, these watches are illegal goods. The manufacturers have to contend with raids, custom seizures, bribery pressure, and all the things that come with the territory when you try to circumvent the government’s wishes. They deal with this by inflating their prices to cover these "expenses", and pass this overhead onto their dealers and ultimately their customers.

There is no overriding terrorist organization that is linked to the manufacture or distribution of these goods. These men are driven by the fact that there is a thriving market for this product in the United States. It is this willingness for people to pay $900 to $1,500 online for a fake watch that costs $75 to manufacture that continues to drive this industry.

But these manufacturers aren't tied to the replica watch business. The minute it becomes unviable from a financial standpoint (their governments put more pressure on them, or less likely, there’s a decline in interest in replica watches in the Western world) they’ll immediately stop manufacturing fake watches and move onto the next profitable item.

While terrorism can be linked to illegal activity let's not link it where there is no hard proof. Fake watches are a problem of international trade, not international terrorism.

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