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Authentix National Fuel Integrity Programs: Enabling Governments to Optimize Tax Revenue, Reduce Carbon Emissions, Improve Fuel Quality, and Fund Public Infrastructure

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Author: Andree Bourgeois

  1. Why do National Governments Rely on Authentix to Implement and Operate National Fuel Integrity Programs?

In the last 25 years, dozens of national governments have selected Authentix to provide the technology and support services to start and operate national fuel integrity programs (NFIPs) with the aim of reducing illicit trade, smuggling, and adulteration of the country’s fuel supplies. Primarily, governments are quick to produce high returns on investments in and enforcement of these programs as illicit trade is reduced, and criminals are no longer able to profit through fraud and tax avoidance. Authentix also appreciates that markets are never static and new threats will always appear. Therefore, we design all our programs around continual improvement to constantly address the changing scope in illicit activity. Additionally, Authentix is committed to capacity building and knowledge transfer striving to empower and train the local workforce in utilizing the best-in-class technology.

Prior to implementing a NFIP, many countries had experienced between 30%-40% total fuels sales coming from illicit activity including several methods of illegal trading such as:

  • Smuggling non-taxed, low-taxed, or subsidized fuels from neighboring countries and selling these as fully taxed fuels.
  • Adulteration (commingling) with off-road, tax exempt, or subsidized fuels and selling as fully taxed fuels.
  • Adulteration/dilution of high-quality refined fuel with substandard or inferior quality products such as kerosene or waste oil and selling to the unsuspecting consumer as high quality, fully taxed fuel.
  • “Round Tripping” where untaxed products destined for export or transit through the country never leave the national borders and are dumped into the legitimate supply chain.

2. The Adverse Effects from Illicit Trade of Fuel Products

In addition to the obvious loss of excise tax revenue to the country from criminals who profit from these fraudulent activities, there are many detrimental outcomes when allowing this nefarious activity to go unchecked including:

  • Lower revenue collection by the government and less public funds for roads, schools, healthcare, and other important infrastructure needs of the citizenry.
  • Possible need for the government to increase marginal or other taxation rates on the citizens to make up the funding shortfalls caused by these fraudulent schemes.
  • Environmental damage and increased air pollution caused by low quality and sometimes dangerous adulterants present in the country’s fuel supply chain.
  • Lower fuel efficiency by vehicles where fuel or oil adulterants can reduce the fuel quality and engine performance standards.
  • Increased costs to consumers and industry via damage to motor vehicles and other motorized equipment caused from use of low-quality oil and fuel adulterants not specified for use by these vehicle manufacturers.
  • Reduction of legitimate and compliant retailers who cannot compete against illicit operators’ reduced cost basis.

3. The Quick Payback to Implementing Authentix NFIPs

In the dozens of NFIPs implemented by Authentix on behalf of governments around the world, the positive impact has been rapid, consistent, and substantial in counteracting these adverse effects and ongoing damages of illicit fuel trading. It is common to see significant reductions in illegitimate fuel in the supply chain within only a few weeks of the program’s inception. In fact, well within the first year of program inception to see previous fuel supply compromise rates easily cut in half and even greater reductions through the remainder of the first year. As the program gains velocity and following successful enforcement activity, it is common to see illicit activity drop below a 5% rate.

In case studies completed on various programs, it was common for the illicit trading of fuels to go from over a 30% compromise rate to less than 5% in a matter of months from enforcement starting. Through continued program operation and ongoing enforcement, countries have been able to sustain these single digit compromise rates perpetually. Given the increased collection of legitimate taxes, the program metrics means the client could easily pay for the initial NFIP investment within a few months. Continued enforcement through suitable legislation then allows these gains to be protected through the life of the program.

For most countries, excise tax collections from fuel sales can be a major component of the government’s budgeted revenue often exceeding over USD250 million in smaller countries and billions of dollars in larger countries. With such large numbers at stake, cutting fuel fraud even a few percentage points can result in a massive return on investment for the government, often more than 20 times the annual cost of the NFIP.  In many instances, Authentix clients have seen fuels excise tax revenues increasing by USD50 million to hundreds of millions per year. In a single client circumstance that was one of the first to institute an Authentix NFIP over 20 years ago, the total recovery of additional funds is estimated to be more than USD2 billion in the last 23 years.

4. The Environmental Benefits of Authentix NFIPs

While most governments are starting to consider implementing NFIPs due to the positive experiences of other countries who have already deployed a program, there are many more returns on investment to be realized beyond the large tax revenue increases. Reducing the amount of low-quality and harmful adulterants in the fuel supply has an immediate and extremely positive impact on air pollution and can allow a country to meet its commitments and be compliant with international air quality standards established through international and cooperative treaties. These treaties, such as the Stockholm Convention enacted in May of 2001, brought most countries together in a global, written pact agreeing to ban harmful Persistent Organic Pollutants (POPS) from being used. Many fuel adulterants being added to dilute legitimate high-quality fuels contain POPs, or precursors to POPs and are harmful to air quality and toxic to humans. By eliminating these adulterants from the fuel supply the government is also reducing air pollution.

With an Authentix NFIP, the chemical and covert markers to track and identify the fuel to confirm compliance do not affect the quality of the marked fuel and are environmentally safe. In fact, the proprietary and patented covert markers used by Authentix in these programs are made from Carbon, Hydrogen, Oxygen, and Nitrogen (CHONs) which are already compositional elements of high-quality diesel and petrol fuels today. Further, these covert markers are added to the fuel supply at extremely low concentrations, often at a low parts per billion (ppb) level. To fully understand and visualize something at, say a concentration of 10 parts per billion, imagine starting a trip to fly from Eastern Asia to the tip of South America, which is approximately 14,000 miles. As you begin the journey, you take a half step to pick up your bag. You have now traveled 10 parts per billion of the planned trip, just a distance of 8 inches out of the total 14,000-mile journey.

5. Authentix NFIPs Save Consumers and Vehicle Manufacturers Money

Authentix fuel markers cause no harm to combustible engines and are also approved for use in the fuels for many of the world’s largest branded fuel companies. Unfortunately, this is not the case for harmful adulterants and other oil waste products added to fuels through illicit trading. In today’s modern vehicles, carburetors, fuel injectors, real time oxygen sensors, catalytic convertors, exhaust filters and other expensive, computer controlled electronic components are all precisely engineered to work with specific fuels having minimum quality thresholds for composition including those able to utilize fuels containing percentages of ethanol. However, as non-fuel hydrocarbons and other substandard chemicals are intentionally added to dilute quality fuels for profit seeking, vehicle fuel systems and other components can be severely damaged even resulting in catastrophic engine failure. These costs are extremely high for both consumers and vehicle manufacturer warranty claims in countries experiencing prominent levels of fuel adulteration.

While many consumers try to purchase fuel from reputable retailers it is next to impossible to know if the quality of any fuel being dispensed to a vehicle meets the minimum government and vehicle manufacturers requirements. And it is not just the retailers who are suspect in these cases as even the most high-quality and well-intentioned branded fuel retailers can fall prey to the illicit wholesale transporters and distributors involved in fuel adulteration and supplying these retail stations. Regardless, implementing an Authentix NFIP is the first important step to improving overall fuel quality by eliminating these harmful adulterants and reducing repair and warranty costs to the consumer.

6. The End Result to Enacting a NFIP? It is the Citizens Who are the Ultimate Winners

While increased tax revenue and high return on program investment is an immediate and clear benefit from an Authentix National Fuel Integrity Program, it is the common citizen and consumer that ends up benefiting the most. With the increased excise tax revenues for the government, there is less reliance on taxation of consumer income or use tax that often becomes necessary to replace the lost revenue from illicit fuel trading. Also, as fuel quality in the country improves from less mixing of low-quality adulterants into the fuel supply, fuel efficiency improves, and costly repairs and unforeseen maintenance issues diminish. Citizens have improved air quality and governments have more resources to build improved highways, airports, and other infrastructure projects necessary to improve the quality of life for all its constituents.

7. Selecting the Right Solution Provider for NFIPs Makes all the Difference. With the Most Fuel Authentication Projects in the World, Authentix is the Market Leader and The Authority in Fuel Authentication

Authentix is the market leader in Fuel Integrity Programs with over 25 years of experience and more active National Fuel Integrity Programs deployed than any other company. Providing our clients with the most sophisticated marking technology, cloud-based software suites, mobile applications, supply chain management tools, documentation, and more is our only focus. Our driving purpose is to create a world of confident commerce and ensure the safety and integrity of products purchased by consumers and companies every day. For more information, please visit our website at www.authentix.com or contact us at info@authentix.com.

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Social Selling Has Empowered Counterfeiters: How Can You Fight Back & Protect Your Brand?

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Author: Andree Bourgeois

By Bharat Kapoor, Vice President of Online Brand Protection, Authentix

With online sales continuing to surge, companies are focusing on digital marketing and advertising products through various social media channels.

Not only has there been a rapid shift towards sales through online channels as a result of Covid-19, with corporations such as L’Oréal for example reporting a 62% increase in online sales across divisions and regions, the marketing of products through influencers has also experienced a dramatic uptick with the influencer marketing industry estimated to be worth US$9.7bn in 2020.

However, according to a report published by Instagram, 20% of the posts associated with top brands on social media featured counterfeit or illicit content.

The way customers interact with brands has been changing over time with two factors driving that change. One is technology where you have omnichannel sales and you’re getting messaging from social media feeds, e-commerce, marketplaces, influencers and so on. Customers buying products online also have access to delivery infrastructures that haven’t before existed in the way they do today. For example, if you buy something on Amazon in Southeast Asia, Asia or the US, it can come to you within hours. And what counterfeiters really take advantage of is exactly that: they find places where it’s easy for them to promote and sell anonymously and use this delivery infrastructure that’s been created by other legitimate businesses who have invested billions and billions of dollars in e-commerce.

The second thing that is helping smooth the path for piracy are payment systems that make it possible to move funds cross-border seamlessly, which are often associated with e-commerce and the rise of China’s cross-border ‘daigou’ trade. Via this method, counterfeiters will attempt to use the pricing gap between retail prices and grey market products to sell counterfeits.

Today, with the various means of transacting, getting money from someplace in Europe into China is also instant. This type of financial structure unfortunately is geared up to benefit fraudsters.

What we’ve seen is cross-border e-commerce channels becoming extremely popular because they offer crazy discounts. These deals are backed by sellers in a foreign country that will be responsible for delivering the product once a transaction is completed. For example, we found and investigated sellers in Singapore that have no inventory and they simply place a back-to-back order when they receive an order. This makes it more complicated for the police to take criminal actions against such sellers.

For the cosmetics industry for example from a brand perspective, it’s not only about counterfeiting, which may be 30-40% of the issue. But you will also find infringers using other brand assets – films, photos, design patents, a wide spectrum of IP – to sell a particular product that could be a counterfeit, or even a lookalike product.”

Finding Out Who’s Selling Fakes

SIPI has a unique strategy for discovering the online vendors who are responsible for dealing in counterfeit products and those dealing in legitimate goods via its proprietary online monitoring and enforcement solutions. The aim is not only to protect clients’ brand image and copyright, but also their customers and reputation.

SIPI uses machine learning-based algorithms to scale up analysis and identify hidden trends in data gathered both online and offline to identify high-value targets.

The process begins with data gathering, in which SIPI scrapes data for clients’ brands from around 500 different e-commerce marketplaces and social media platforms. This data is fed into its online platform for risk screening and risk-scored by SIPI’s proprietary algorithms, under which over 30 parameters (including price, images, keywords, customer reviews and seller activity) are taken into account.

In terms of the algorithms, you must approach your research and your study of a potential infringinglisting by looking at the listing in the wider context. It is sometimes quite difficult to identify a counterfeit product just by looking at the listing, because legitimate brand owners may also sell their products at discounted prices. They have other channels and many other ways of selling. So, you can’t just say that the price of a product being 30% or 40% below average is, alone, an indication of it being counterfeit.

You must be more diligent in terms of your assessment of a seller. And that’s what SIPI has trained our algorithms to do – to know what else to look at online. For example, you can look at customer comments, store rating, how old the stores are and the types of products that you see the store selling, such as luxury goods alongside very generic products, which may be viewed as being suspicious.

To identify offline targets, high-risk sellers are further investigated to create seller and product clusters, the name for groups of sellers concentrated in a region or dealing in a single product. A complete digital profile is created for high-value targets after which these leads are shared with an offline investigator for further investigation and action. The remaining infringing listings are reported to the respective marketplaces and social media platforms for takedowns.

SIPI currently protects over 200 brands and maintains a 94% success rate across platforms. While it strives to have a 100% success rate, certain major marketplaces in China and Asia make it extremely difficult to file complaints against each and every counterfeit instance.

And it is not simply a case of either how sophisticated or poorly-made the fake products are as to whether these are blatantly obvious versions. There are multiple avenues for illicit commercial activity.

SIPI has noticed a sharp increase in the number of sellers claiming to manufacture products and supply packaging materials that support the counterfeiting trade. There are also cases of verifiable and legitimate products being sold illegally.

Looking Forward

Given the wider e-commerce environment playing so well into counterfeit sellers’ hands, we believe the combination of Authentix and SIPI’s expertise comes at a beneficial time for brand clients. The acquisition of SIPI by Authentix increases the scope of its offerings to brand protection clients by integrating digital security technologies and online anticounterfeiting and content rights services for an end-to-end, comprehensive brand protection solution.

SIPI provides clients with solutions to digitize their supply chains and uses investigation techniques to determine instances of counterfeiting and diversion while attempting to keep the internet free of fakes by building effective online enforcement programs.

For a limited time, SIPI is offering a free online brand risk analysis to qualified brands. More information can be found here.

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The Sum of Its Parts: Well-Curated Authentication Technologies in the Fight against Illicit Trade

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Author: Andree Bourgeois

By the Authentix Brand Protection Team

Whether you’re a brand owner protecting a commercial product or a government authority issuing critical, high-security documents, you’re continually faced with the ongoing challenges of combating illicit trade and counterfeiters.

To counter these constant attacks on legitimate industry players, high security authentication solutions are needed to safeguard the integrity of global commerce and can include both physical and digital security solutions. Security can be added to documents, products, and product packaging or labels. In addition to adding these security features, the more advanced and effective authentication programs should also include track and trace capabilities that allow the tracking of protected products throughout the supply chain.

With a comprehensive and well-curated authentication program, brand owners and governments can take a more proactive approach to protecting consumers from potential health and safety issues and themselves from the financial impacts of counterfeiting and diversion.

Product Marking: The Foundation

Physical marking solutions can range from simple yet effective to highly sophisticated and extremely secure. A typical marking ‘toolkit’ consists of four basic elements, each of which performs a different function, ranging from detection, prevention, deterrence and engagement.

  • Tamper Evident – cannot be opened and reapplied without visible damage, therefore deterring and preventing nefarious actors from interfering with the product
  • Overt – visible to the eye and hard to copy, which deters from and ultimately prevents attempts to mimic the feature due to the high barrier to entry both from a cost and from a technical point of view
  • Semi-overt – visible to the eye upon performing a simple action, which means the brand owner can choose when to change a feature from covert to overt by timing the invitation to the public to engage in the authentication of the product
  • Covert/forensic – invisible to the eye, detectable using a hand-held device (covert) or laboratory equipment (forensic); being invisible, covert and forensic features do not prevent counterfeiting, but they facilitate unequivocal and quick in-field verification of authenticity and detection of counterfeits.

A combination of these features presents the most water-tight strategy against a number of illicit trade activities including counterfeiting, diversion, and infringement. To ensure successful implementation with minimal impact to current processes already in place, the most effective approach is to integrate the application of security features into existing processes within your manufacturing and vendor base, whether it is printing, labels, tamper evident seals or specialized overt and covert inks, using existing materials and packaging designs.

Going Digital: Connecting your Asset to the Cloud

Product marking is the foundation that supports digital security technologies, given that the physical form of digital identifiers can be validated when combined with robust printed security features.

Products become digital touchpoints by adding unique, item-level digital identifiers to the product or its packaging. Unique identifiers can be delivered in various formats such as overt or covert Datamatrix codes, QR codes, human readable alphanumeric codes, or embedded NFC chips, added to any part of the product or packaging or other carrier vehicle. These digital identifiers can also be embedded into an existing code format or added as a covert ‘twin’ of a visible code in cases where codes are at risk of being removed in an unauthorized attempt to destroy the traceability of the product.

In general, there are three main users of this technology:

  • Supply Chain Participants – manufactures, distributors, 3rd party logistics
  • Inspectors – a brand’s internal team, local law offices, law enforcement and customs agents
  • Consumers/e\End-Users – for authentication verification and engagement

What’s Next: Using your Connected Asset to your Advantage

Connected products are typically used in three different ways and for different objectives. These include journey tracking, authentication and consumer engagement as shown in this graphic.

 

Driven by a rules engine that is calibrated by the brand owner or government, each of these paths direct critical data back to them in the form of actionable insights and analytics that are leveraged for strategic decisions across multiple agency focus areas or corporate functions, such as legal, operations, supply chain, marketing and others.

Examples of data that can be gleaned include locations of suspicious activity, excessive scan volume, geo- fence violations, multiple scans/single ID alerts, top scanned codes, and more.

The Role of Data: Collect, Analyze, Act, Share

There are many areas in which data can prove exceptionally meaningful. These include:

  • Secure mark: validates if the product is genuine or fake
  • Distribution: routes, port of entry, freight forwarders, dates, etc.
  • Illicit activity: captures and ear-marks products/codes that are suspected as counterfeit or diverted
  • Source: increasingly important raw materials and components
  • Product: records product make or model, part number, batch and quality control data
  • Production: captures manufacturer, date and time of production
  • Location: identifies where was the product made, shipped, sold, or scanned
  • Consumer: opt-in driven consumer intelligence, contact data, location of scan, device, engagement

This data can easily be shared across internal teams, with law enforcement and customs, and used for benchmarking and best practices in discussion with other brands.

Examples of client dashboard in the Authentix DigiTrax™ platform

 

In summary, both physical and digital technologies play an important role in the fight against illicit trade. Creating digitally connected products turns them into valuable tools for inspection, reporting and communication. When leveraged to its full functionality, the combination of physical and digital technology is a game-changer for our industry.

To learn more about Authentix brand protection solutions, visit authentix.com.

Authentix® UK Ranks #6 on York’s Top 100 Business List

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Author: Andree Bourgeois

ADDISON, Texas, 8 April 2022 — Authentix, the authority in authentication and information services, has been ranked sixth in York’s Top 100 Businesses in an annual report published by The Press in conjunction with its partners, York St John University and City of York Council.

Moving up in three years from 50th to now 6th in York’s Top 100 Business List, the York-based Authentix team is proud to be a part of this list of significant businesses that have remained committed to investing in the local York economy. According to York St John Business School, a custom algorithm takes into account performance indicators such as turnover, profit, size and growth to determine the businesses that are key contributors to York’s professional landscape.

“We are honored to be a thriving part of the York business community. Being recognized in the York Top 100 Business List is a testament to our continued rapid growth and moreover to the Authentix team and all of our employees worldwide who are focused on our clients and helping to create a world of confident commerce,” said Kent Mansfield, Chief Sales and Marketing Officer. “Being named in the top 10 of these 100 excellent companies for two consecutive years, is an honor and our team is motivated to continue our company’s strategic focus to expand our reach as a global organization while still being grounded to the local communities we serve.”

The top 100 businesses were featured in a special supplement publication that was distributed along with the April 5th issue of The Press. The top businesses who were honored gathered at the university to launch the issue, network, and toast to the diverse range of businesses in York.

About Authentix:

As the authority in authentication solutions, Authentix thrives in supply chain complexity. Authentix provides advanced authentication solutions for governments, central banks, and commercial brand owners, ensuring local economies grow, banknote security remains intact, and branded products have robust market opportunities. The Authentix partnership approach and proven sector expertise inspires proactive innovation, helping customers mitigate risks, promote revenue growth, and gain competitive advantage.

Headquartered in Addison, Texas USA, Authentix, Inc. has offices in the North America, Europe, Middle East, Asia, and Africa serving clients worldwide. For more information, visit https://www.authentix.com. Authentix® is a registered trademark of Authentix, Inc.

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Using Data Collected in Brand Protection Programs

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Author: Andree Bourgeois

Protecting consumers and safeguarding your company’s brand identity and reputation is becoming increasingly challenging in today’s environment with the continued growth of counterfeit and diverted products entering the market. At the same time, consumers are taking a more proactive role in choosing to buy brands they know and trust, while expecting increased transparency in brand promise.

As supply chains become increasingly complex, brand owners are facing intense pressure to respond to traceability and transparency challenges by utilizing digital systems for collecting valuable data and analyzing and acting upon the visible trends to help consumers authenticate products at points of sale, or alternatively connect and engage with the brand owner directly via the web or app. A digital solution helps with monitoring product movement in the supply chain, as well as direct consumer feedback, to confirm legitimate or potential suspect product in the marketplace.

67% of consumers say brand trust has a great deal of influence over their buying decisions.

In todays connected marketplace, most companies already collect and use various forms of data analytics to drive ongoing business decisions and strategic initiatives. In fact, business action and decision making has become reliant on the use of data analytics to manage many day-to-day operations. Despite this growing reliance on data, most organizations have yet to apply the practice successfully when it comes to brand security. This can partly be attributed to the lack of reliable data available since the early adoption of digital track and trace capabilities for risk-based products is only beginning. The key to effectively using data in brand protection programs is to understand what data is available now, what data is needed that is not available, how to efficiently collect and analyze the data and lastly, what action can be taken based on this analysis to effectively reduce counterfeiting and diversion while simultaneously engaging directly with the consumer.

Data Identification

An enormous amount of meaningful data can be gleaned in digital tracking for brand protection programs including information about a product’s provenance, its journey through the supply chain, the location/date/time of associated transactions including consumer scan events, validation of authentication or suspected illicit activity, and even direct consumer marketing and engagement.

However, how to apply the data once collected can be different for each company. At Authentix, we collect supply chain and consumer interaction data from multiple sources and aggregate it into our secure cloud-based platform on behalf of our brand owner clients. From there we are able to configure rules and analyze data trends to provide our clients with complete visibility into the suspect events or grouped metadata revealing weak links or threats in supply chain operations that often point to product compromise.

Data Collection

The following are key areas for collecting data using digital track and trace technology.

  • Data Carrier Technology – includes multiple formats of barcodes, NFC and RFID technologies for supply chain tracking, purchase and post purchase consumer engagement, inventory movement, and theft prevention. These technologies vary greatly in terms of volume capacity, costs, application requirements and security levels, so it is important to evaluate the best types of code formats and integration to existing manufacturing and packaging processes that best meet the minimum needs that would produce a valuable return.
  • Track & Trace – can be accomplished during sourcing, manufacturing, distribution, and pre- and post-sale stages. During the printing, manufacturing or packaging process for example, the scope of implementation choices widen and we can provide multiple routes to enable tracking of product origin information, manufacturing location(s), production lines designation and more. Additionally, as the product nears closer to the point of sale, we’ll begin seeing authentication activity and the collection of meaningful data such as distributor and consumer interaction and engagement, and sustainability and circularity.
  • Authentication – in most digital track and trace systems, analysis of authenticity is often achieved via a smartphone. This can be by company inspectors using a proprietary mobile application all the way to the consumer who can interact with the product without having to download a mobile app. Using the Authentix DigiTrax™ track and trace solution as an example of direct consumer engagement, the smartphone user simply scans a proprietary and encrypted QR code which directs them to a custom URL experience that can include, among other things, the unique information associated with the individual product scanned. These consumer product scan events including geo location, date, time, product and product provenance information are submitted to the secure cloud-based DigiTrax platform where the information can be used to understand purchasing trends, market directly to the user, or allow the user to authenticate the product using proprietary codes or PINs. If designed for the purpose, the results of the authentication can be sent back to the user in real time. This technology also enables inspectors in the field and other key stakeholders to identify the authenticity of a product instantly using a more sophisticated mobile application. In addition, consumers may also use the DigiTrax platform to verify authenticity of other products or for the purpose of continuing engagement with brand owner purely for marketing purposes.
  • Online Surveillance and Enforcement – are methods, systems, and services used to identify, investigate and takedown unauthorized e-commerce websites that deal in illicit trade of counterfeit, diverted, or stolen products. This is accomplished through automated online tools and services such as marketplace monitoring, WeChat micro tasking, and machine learning which can identify risk levels, hot zones and image matching to police and eliminate unauthorized sales of product and illegal use of trademarks on the internet.
Putting Data to Use

Reliable and timely data feedback enables brand owners to quickly answer complex supply chain events, pinpoint trouble spots, and take corrective and even preventative action to reduce the instances and threats of unauthorized product entering the marketplace. Data can be used to assess multiple business-centric operations to increase sales and market share, acquire and build trust with new customers, and reinforce brand assurance, to name a few. In addition, as consumers become more reliant on smartphones for collecting and communicating information, brand owners can capture consumer data to tailor experiences and increase engagement and loyalty.

Using Data to Drive Success

Authentix customers are using valuable brand protection data and analytics in multiple ways with great success. In one customer success story, an international wine exporter faced counterfeiting and diversion issues in China, resulting in loss of consumer trust and risk to its strong market share and long term brand loyalty it had spent years building. Authentix helped the client implement a multi-layered digital authentication solution with covert and overt on-product features that flags, collects and analyzes all inspector and consumer scanning activity including the capability of retail product authentication by the consumer. The result? Over 150 counterfeit retail locations were identified and remediated. Also, through direct consumer engagement, loyal brand purchasers became more confident in product authenticity and the client was able to maintain premium pricing for their superior and quality products.

In another example, an international brand customer incurred online marketplace counterfeiting in Asia, putting consumer health, safety and loyalty at risk as well as decreasing revenues. Authentix helped the client implement a multi-phased online brand protection monitoring solution and services to identify and investigate the online sale of spurious product and locate complicit bottling and closure manufacturers involved in the illicit trading. Website takedowns were initiated, resulting a 90% reduction in fake products in Indonesia, 1,500 online listing takedowns in Malaysia, and 13 raids and enforcement actions conducted in China.

Start Big or Small. Just Start.

It’s important to point out that you do not have to implement a full scale approach to digital authentication initially and it’s easy to begin collecting and leveraging data – even if it’s just one product or product line for a particular geography. Alternatively, digital automation for brand protection programs can be implemented in a sweeping fashion as an end-to-end solution from the start with a full technology suite. Most clients choose to implement in logical steps based on risk assessment, ease of implementation, and to the most critical geographic areas. The key is to get a secure digital mark on your product and start the data collection process. Ultimately, it is how much data, the association of the data elements for analysis, and the conclusions and action you take that determines how much your brand protection program can be enhanced by bringing in digital track and trace automation. The key is to start, analyze, adjust, expand and continue until the data flow and insights provided are resulting in the development and refinement of actions and policies to take command of the risks faced each day.

Learn more about Authentix brand protection solutions, HERE.

Authentix Expands into Online Brand Protection Services

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Author: Andree Bourgeois

From Identification, Surveillance, Investigations, and Website Takedowns: Authentix now Provides Full Service Online Brand Surveillance and Enforcement

To expand its capabilities in digital brand protection for brand owners, Authentix has recently acquired Strategic IP Information Pte Ltd (SIPI), a leading online brand and content rights protection service.

For over ten years, SIPI has offered state-of-the-art services for brands to track unauthorized channels for counterfeit products through its proprietary online tools and array of customized services including physical enforcement, investigations, sample purchases, and taking down pirated listings. Using a team of dedicated analysts and sophisticated platform technology, we can promptly detect infringement and counterfeiting activity for rapid action and consolidated, insightful reporting for the 200 brand customers now serviced.

In the last two decades, counterfeiting has quickly grown from city sidewalks to the internet marketplaces. While e-commerce has opened new doors for traditional and start-up brands, it has also provided illicit traders lucrative access to a global customer base.  Online counterfeit goods now total an estimated $590 billion globally and according to a recent study by the European Union Intellectual Property Office, 1 in 10 online buyers has been deceived into buying a counterfeit product.

Tokyo Olympics – Example of Recent Target

As online marketplaces continue to be exploited by illicit traders there is a growing amount of peddling with convincing bootleg and falsified versions of branded products. This illegal activity increases during major global events such as the recent Summer Olympics in Tokyo for example. While there was ample licensed merchandise sold through the official online store of the Olympics, there was also falsified and unlicensed merchandise selling through illegitimate, third-party websites.

As Authentix/SIPI closely followed the action in the Olympic games, they also investigated licensed branded merchandise sold online, where it was discovered that marketplaces, social media and multiple 3rd party websites were offering unlicensed and infringing products. Using t-shirt sales as an example, the product offered on certain websites we investigated all displayed the Olympic branding TOKYO 2021. However, despite being held belatedly this year because of the COVID pandemic, the Tokyo Olympics retained TOKYO 2020, precisely because merchandise with the 2020 branding had been manufactured prior to the delay. Therefore, any merchandise bearing 2021 in the labels was quickly identified through automated means and was presumed to be suspect. To date merchandise bearing Tokyo 2021 is readily available on major marketplaces such as Aliexpress, Wish, Dhgate, ebay and Amazon. Discrepancies in branding and use of marks such as the TOKYO 2020 logo were also found to be compromised during our investigation.

There are many technological advancements such as product clustering, geo location mapping and machine learning based algorithms that can be used to find products compromised in the various marketplaces, discover major networks of illicit traders, and find many other forms of IP infringement. Once infringements such as the examples used above for the Tokyo Olympics are identified, viable and rapid action including shutdowns can be taken against the perpetrators, holding them accountable for their actions and helping to further prevent unauthorized products from being placed on the market.

To learn how Authentix Online Brand Protection Services can quickly work for your company’s on-line monitoring and enforcement needs, visit our website.

Meeting The Biofuel Compliance Challenge

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Author: Andree Bourgeois

By: Jeff Conroy, Chief Technology Officer, Authentix

Authentix is pleased to be included in the June/July edition of Tank Storage Magazine, a leading industry publication delivering the latest news and developments to the bulk liquid storage and terminal sector.

In our feature article, Jeff Conroy, PhD, Chief Technology Officer for Authentix, discusses the challenges and possible solutions for the quality assurance and source integrity of renewable biofuels which are increasingly relied upon to meet mandates greenhouse gas (GHG) reductions.

However, the production of biofuels from non-sustainable sources or energy intensive processes can lead to reduced environmental benefits or even an overall increase in emissions, so the pedigree of otherwise chemically identical biofuels becomes very important.

READ THE FULL ARTICLE HERE

Implementing an Effective Brand Protection Program

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Author: Andree Bourgeois

From Risk Identification to Full Implementation

Part 4 of The ABC’s of Brand Protection series by Authentix focusing on the global scope of the counterfeiting epidemic and how to act against it to protect your brand, your customers and your revenue.

In articles 1, 2 and 3 of this series, we’ve discussed the vast scope of the global counterfeiting problem, the tactics used by counterfeiters, and security features used on many products today to detect and mitigate these compromises. You are aware that this is a massive problem but how do you determine if your products are at risk? Understanding and assessing these risks is the first vital step to start mapping out your company’s action plan, resulting in an effective brand protection program.

Five Steps to Determine if Your Products are at Risk
  1. Identify the risk areas

First, develop a risk inventory for your product line. The level of risk might differ depending upon supply chain complexity, geography, price point, margins, and anticipated demand. Consider these questions to identify vulnerabilities:

  • Is my product line high volume with a low variable cost to produce?
  • Are these products sold at higher price points and gross margins?
  • Does my product line have an existing or potentially large market share?
  • Does my product line and/or packaging currently have covert or overt security features that are economic deterrents to prevent counterfeiting?
  • Do we sell through a complex supply chain and lose visibility to the point of sale?
  • Are any of these products sold online or manufactured in countries without stringent counterfeit enforcement laws?
  1. Assess risk

Determine the likelihood, impact, and overall threat of each risk factor. How susceptible is each product in your portfolio for attempted compromise? Use this information to create a portfolio of the higher risk products which includes:

  • Aggregated risks – score each product with weighted indicators to prioritize by risk potential
  • Map of the supply chain environment – what are the highest points of exposure and where do we have access?
  • Potential short- and long-term damage – Consider:
    • How could adverse events of illicit supply affect consumer trust in your brand?
    • What about liability from health issues caused by compromised product?
    • How much market share and revenue dilution could be happening?
  1. Develop a risk management strategy

Examine the results of your risk assessment to create an integrated strategy for each high-risk product that includes potential solutions to address all the foreseen threats:

  • Adopt a defined set of policies and procedures where your stakeholders are aligned
  • Look at available solutions to address specific product risks by threat area; for example – consumer safety vs. losses from diversion activity
  • Address what actionable steps can be taken at the physical points in the supply chain where threats are the greatest
  • Play out each risk scenario and escalation possibilities for contingent action upon the event including communication strategies
  • Prepare a budget to implement solutions based on your assessment
  1. Create an action plan

Responses to the most pressing threats can now be put into action by organizing management, information, and technology solution partner(s). Your action plan should include the following three categories:

  • Detection and Deterrence – solutions that provide detection of a non-authorized product in the supply chain, proactive awareness campaigns, investigatory procedures upon detection, vendor agreements that include security policies for handling or manufacturing higher risk products, and unannounced audits of downstream distribution partners.
  • Enforcement – the pre-determined action you plan to take upon the detection of an adverse event. This might depend on the event’s geography, supply chain level, and the resources you have allocated for enforcement.
  • Prosecution – plan the specific steps that will be taken to support investigative and forensic efforts upon the discovery and confirmation of responsible parties. In some countries, enforcing your supply agreements against offending distribution partners might be a better course of action than criminal prosecution.
  1. Monitor risk and continually re-evaluate your strategy

The last step in your strategy is a closed loop. Constant review of your data analytics offers an opportunity to better understand changing risks, increased or decreased vulnerabilities, and allows you to refine your actionable policy proactively. Today, data visualization coupled with a strong physical security element is even more critical in the fight against illicit product placement activity.  Analyze and act on these insights revealed in the reporting information– from new counterfeit hot spots to changing risk as time evolves.

The fact is no one solution or security measure will be the panacea to address all instances of product compromise across the global marketplace. However, as a brand owner you can assess these risks and select the right security solution partner(s) to help minimize the damage and keep you in charge rather than being in a reactionary stance. Also, it is important to select solution partners with lengthy experience in multiple industries who can offer a full suite of technology and service solutions that can both be rapidly implemented and scale to your business needs.

For more brand protection basics – why it is necessary, how it works, who is vulnerable, how to implement an effective program, what to look for in a technology partner, and which emerging technologies will make a difference in the future – download the eBook, The ABC’s of Brand Protection.

Download the eBook

READ PART 1     |      READ PART 2    |    READ PART 3

Stealthy Security: Anti-Counterfeiting Tactics

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Author: Andree Bourgeois

Part 3 of the ABC’s of Brand Protection series by Authentix focusing on the global scope of the counterfeiting epidemic and how to take action against it to protect your brand, your customers and your revenue.

We must face the facts. Counterfeiters make it their mission to knock off high-value products and they can be very good at it. With the right tools and illegal intent, a counterfeiter can create a product and packaging close enough to the original to easily fool consumers. And as technology becomes more accessible, it only gets easier for them to duplicate the basic one-dimensional protection measures a brand might implement. To fight back, you’ll need an arsenal of security features that can be woven seamlessly into the product and packaging design making it far less vulnerable to bad actors.

Each security feature serves a unique purpose. Overt or visible features allow the end consumer to verify authenticity of their purchased product. There are also covert or invisible markings enable trained inspectors to quickly authenticate genuine products in the supply chain, identify the source of diversion or determine other illicit activities.  When combined with careful design and production quality controls, these features raise the bar of complexity for counterfeiters and make the product a less attractive target.

Let’s break down six basic categories of anti-counterfeiting features. You might have implemented one as a security tactic, but still battling diversion in the marketplace. Rather than one and done, think of these tactics as a multidimensional security wall that helps identify authentic products from fakes.

  • Overt Security Features – These visible features can easily be detected and are often beautifully incorporated into the design of the product or packaging.
  • Covert or Semi-Covert Security Features – Covert and semi-covert features are invisible to the naked eye or disguised but can be found and measured with specialized handheld devices using proprietary optics and detection algorithms for rapid, secure field authentication.
  • Forensic Security Features – Forensic analysis involves laboratory testing of products via an embedded (non-native) component or molecule added to a substrate or solution to determine authenticity.
  • Serialization or Track and Trace Features – The application of individual unique codes at the point of manufacture (giving each product an identifiable attribute) and defined scanning locations where retrieval and association of the unit can be linked to the scanning transaction.
  • Digital solutions – The application of a unique code, number or symbol that results in a digital ID recorded in a database. Product attributes such as manufacturing date and time, expiration dates, lot numbers, pictures, and a host of other origin information can be added to the database record and associated with the product.
  • RFID – Radio Frequency Identification (RFID) is a small antenna and receiver system where a unique product-level ID is hidden or embedded in a small chip or printed label. The ability of these “electronic labels” to communicate with a centralized database system performs like other track and trace systems.

One Tactic Is Not Enough

An effective multilayered approach using overt, covert, and forensic security features is the most effective long-term solution to detect and deter counterfeiting. When incorporated into labels, closure seals, storage cartons, and packaging, each type of feature serves a unique purpose — from color-shifting ink that allow end-users to quickly identify a branded product as genuine to covert markings that enable an inspector to identify many factors involved with the source of authenticity.

For a deeper dive into the details of each type of security feature and other brand protection basics – why it is necessary, how it works, who is vulnerable, how to implement an effective program, what to look for in a technology partner, and which emerging technologies will make a difference in the future – download the eBook, The ABC’s of Brand Protection.

Download the eBook

READ PART 1     |      READ PART 2

The Case for Implementing National Fuel Integrity Programs

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Author: Andree Bourgeois

Reducing Illicit Fuel Fraud and Recovering Revenue for National Governments around the World

By Andrée Bourgeois, Senior Marketing Manager, Authentix

The impact on national governments from adulterated, diluted, and illegally trafficked fuel within a country’s borders results in lost tax revenue, poor quality product, environmental issues, and ultimately reduced community services and benefits for citizens. After 25 years of working with dozens of government ministries and leaders to implement fuel integrity programs across the globe, Authentix has helped many countries expand revenue collections by reducing or eliminating the proliferation of tax avoidance and illegal profiting through illicit fuel sales. Many countries that implement an Authentix fuel integrity program quickly see reductions of this illegal activity by more than 30 percent annually with corresponding increases in taxation revenue.

Our experience and years of data has proven that implementing fuel integrity programs has substantial benefits to many national governments and its citizens alike, providing very high returns on investments made. Many governments have published data showing the positive impact of securing and monitoring their fuel supply including Ghana, Serbia, Zambia, South Africa, and most recently, Kenya published an article further confirming the effectiveness of its fuel integrity program. As stated in the publication businessdailyafrica.com, Kenya’s Energy and Petroleum Regulatory Authority (EPRA), which is mandated under Section 92 of the 2019 Petroleum Act, is charged with monitoring petroleum products offered for sale in the local market and has continued to enhance its fuel integrity program with tremendous outcomes. As a result, Kenya continues to reduce fuel adulteration and is well on the way to achieving near 100 percent reduction of fuel fraud.

READ THE FULL ARTICLE HERE.

To mitigate adulteration challenges, many governments such as Kenya have taken action to implement national fuel integrity programs curbing fuel fraud, recovering missing tax collections, and restoring confidence in the national fuel supply. These programs are continuing to grow in number and scope as technology advancements result in more sophisticated enforcement techniques as well as building a history of data retention, correlation, and actionable insights over time. As programs remain implemented, product and supply chain data are collected over multiple points in the supply chain — providing organizations complete visibility of trends, reconciliation issues, and machine learning capabilities to help prevent, correct, enforce, and ensure ultimate compliance.

Most fuel integrity programs in place today involve chemically marking fuel at refineries and/or terminal distribution points to ensure that all fuel in the downstream supply chain can be authenticated all the way to retail points of sale. The fuel is typically marked by dosing with an inert, organic chemical marker at levels so low (parts per billion), the presence of the marker cannot be detected without proprietary and highly sophisticated devices. As fuel is sampled and tested in supply vehicles, retail stations, and even consumer vehicles, it is possible to determine if the fuel has been diluted with substandard or non-taxed products such as waste oil, off-road tax-free fuel, or via other illicit means. The detection technique enables accurate quantification using portable analyzers in the field or more enhanced, forensically defendable methods in a laboratory.

Authentix is the market leader throughout the world delivering these solutions and has become a trusted and effective partner for national governments to validate fuel quality and supply authenticity, and provide the tools to enforce and prosecute those whom are trafficking illicit fuel products. Authentix continues to build its large library of unique covert markers, resulting in the highest level of authentication security and effectiveness available today. Authentix has spent decades building its suite of custom markers which take many different forms and vary in application and use based upon the country’s unique set of requirements.

The return on investment of successfully deployed fuel integrity programs by Authentix is substantial, helping governments recover millions in lost tax revenue each year, while positively impacting the society through expanded services and infrastructure and resulting in a cleaner environment for all.

Learn more about Authentix National Fuel Integrity Programs.

Andrée Bourgeois is Senior Marketing Manager for Authentix. As the authority in authentication solutions, Authentix thrives in supply chain complexity. We provide advanced authentication solutions for governments, central banks and commercial companies, ensuring local economies grow, banknote security remains intact, and commercial products have robust market opportunities. Our partnership approach and proven sector expertise inspires proactive innovation, helping customers mitigate risks to promote revenue growth and gain competitive advantage.

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