Counterfeit goods persist despite govt curbs, renewed US complaints

The Star

27-04-2025

JAKARTA: Rampant intellectual property (IP) infringements continue to persist, particularly in the trade of counterfeit products, despite repeated attempts to curb the practice through government measures as well as pressure from foreign countries, especially the United States.
That is the reality on the ground, at least according to some merchants at Mangga Dua Morning Market in Ancol, North Jakarta, which has long attracted shoppers and bargain hunters in search of affordable luxury apparel and accessories such as handbags, wallets, toys and leather goods, never mind that many are knockoffs.
At one stall with two employees, the shelves were stacked with knockoff luxury goods, from counterfeit Coach bags to Louis Vuitton wallets. Counterfeit goods of high-end brands cost more than Rp 1 million (US$59.26) on average, with the cheapest item priced at Rp 350,000, the employees said on Tuesday as they engaged in haggling with shoppers looking for better deals.
Aristo, who has been selling wares at the market for over a decade, offers knockoffs of mid-range labels in his compact retail space, which is filled with a variety of counterfeit bags and backpacks for around Rp 150,000 a pop.
He told The Jakarta Post on Tuesday that the market's merchants were divided into tiers: so-called premium sellers offered genuine luxury brands with price tags reaching several million rupiah, while low- to mid-level sellers offered knockoffs for an upper price range of Rp 500,000.
Government raids were a regular occurrence at the market, Aristo said, especially those targeting 'premium sellers'. 'But as you can see, they are still here,' he said, pointing to a row of busy stalls nearby.
According to Aristo, many Mangga Dua merchants source their goods from other wholesale markets in Jakarta. 'We sell whatever is right in front of us,' he said, suggesting that some merchants might not be aware that they were trading in counterfeit imports.
Mangga Dua market has once again been brought into spotlight as a copyright piracy and trademark counterfeiting hub, this time in the 2025 National Trade Estimate Report on Foreign Trade Barriers from the Office of the US Trade Representative (USTR), along with a general mention of 'multiple online Indonesian marketplaces'.
The report was published on March 31, just a few days before President Donald Trump unveiled his sweeping tariff policy for hundreds of nations on April 2, though he backtracked exactly a week later with a 90-day pause, reportedly to open space for negotiations with affected countries.
In the linked 2024 Review of Notorious Markets for Counterfeiting and Piracy (Notorious Markets List), the USTR states: 'There has been little or no enforcement actions against counterfeit sellers.' It also referenced stakeholders' reports that 'warning letters issued to sellers have been largely ineffective' and their 'concerns about the lack of criminal prosecutions'.
Trade Minister Budi Santoso said on April 20 that his office would continue to monitor and crack down 'strictly' on the domestic circulation of counterfeit goods. Moga Simatupang, the ministry's director general of consumer protection and trade order, told the Post on Monday (April 21) that the distribution of counterfeit goods might fall under offences that cannot be prosecuted without a complaint from the victim, as stipulated in Law No. 20/2016 on trademarks.
He added that the IP Task Force, which comprises several ministries and state institutions, had conducted regular surveillance of various products that infringed intellectual property rights. 'Regarding the rampant [trade in] counterfeit goods at Mangga Dua, the government will immediately take follow-up action,' Moga said.
Industry Ministry spokesperson Febri Hendri Antoni Arif emphasised that regulating imports was crucial in preventing the entry of counterfeit products, pointing to Industry Ministry Regulation No. 5/2024 that requires importers to have a trademark certificate before getting the green light from the Trade Ministry.
The regulation was 'aimed at filtering and preventing counterfeit goods from being imported into the domestic market in Indonesia', Febri said in a statement on Tuesday. However, this regulation was short-lived and subsequently replaced by Trade Ministerial Regulation No. 8/2024, which eased imports and removed the requirement for trademark certification.
According to Febri, the ministry had deemed as ineffectual efforts to trace and crack down on counterfeit goods in local markets amid a surge in import volumes, noting that it would be difficult for brand principals and trademark owners to file formal complaints since most were based overseas.
Andry Satrio, an economist at the Institute for Development of Economics and Finance (INDEF), told the Post on Monday that curbing counterfeit goods was a delicate and challenging issue.
For example, he said, if the government considered tightening import regulations, the US might view it as a form of trade barrier. This move could also restrict the flow of raw and auxiliary materials, which had led to protests last year from businesses with local operations and the government's eventual policy reversal.
Andry also underlined that the trade in counterfeit goods involved illegal cross-border activities, so the government should strengthen the enforcement of IP rights through partnerships with other countries, such as Asean states.
Bhima Yudhistira, executive director of the Centre of Economic and Law Studies (CELIOS), said on Monday that the counterfeit goods trade had become widespread in part due to lack of oversight in halting imports through unauthorised channels.
The absence of sanctions for both producers and retailers of counterfeit goods was another contributing factor. 'Though the government has confiscated some illegal goods, it was not significant,' he said, adding that retail sales of illegal goods accounted for ten per cent of GDP. - The Jakarta Post/ANN