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Chinese Businessman Fights US Extradition


The owner of a Chinese chemical company accused of product counterfeiting is in a London prison fighting a U.S. extradition request. Yuan Hongwei appeared in court Monday to ask to be freed on bail. If he loses his legal battle, he would be the first Chinese national suspected of an intellectual property offense to be extradited to the United States. More from VOA's Bill Rodgers.

Yuan Hongwei went to court Monday to request bail as he fights a U.S. extradition request. British authorities arrested Yuan at London's Heathrow airport on September 14th and he has been in jail ever since.

Yuan is the owner of the Chinese chemical firm, Hunan Magic Power Industrial Company, based in Liuyang City in China's Hunan province. He is accused of violating U.S. trademark laws by producing and selling various chemical products under the name of a U.S. company.

The American firm, ABRO Industries, says it has lost tens of millions of dollars from the sale of these counterfeit products around the world. ABRO President Peter Baranay denounced the practice as "economic terrorism" in a VOA interview in May. "They don't follow the rule of law, they're operating entirely under the radar, they are violating every conceivable rule and regulation there is in business."

Hunan Magic Power claimed it had a legitimate license to make products under the ABRO label. But Chinese authorities found this to be false. They seized and destroyed fake ABRO products after the American company took legal action in China. In May, Hunan Magic Power representatives told VOA (off camera), the firm had stopped selling ABRO products following pressure from Beijing.

The request for Yuan's extradition is based on an arrest warrant issued by the southern U.S. state of Louisiana, which seized fake ABRO products shipped by Hunan Magic Power.

As the U.S. cracks down on product piracy, this case would be the first instance that a Chinese national is extradited to America to face charges in a U.S. court.

Brad Huther, who handles intellectual property issues at the U.S. Chamber of Commerce, says extraditing Yuan would be significant. "The fact that you can manufacture, export and distribute to countries everywhere, and now face the risk that you won't be treated within your own system of law but rather in more advanced systems that really apply the rule of law, I think could very well have at least a near term, not a chilling, but certainly a dampening effect on counterfeiters' bravado."

Assembly line jobs have been lost to counterfeiting -- in this case American chemical factories that supply ABRO with products for export. And product piracy is a widespread problem, not only in the United States, but around the world. Videos and computer software are typically among the goods copied.

While often viewed as harmless, Huther says product piracy is a pervasive criminal activity. "And that means every consumer everywhere is now at risk of potentially buying everything from fake pharmaceuticals at their local pharmacy to automobile spare parts that are counterfeit, direct knock-offs of brand names but with substandard quality in them."

Yuan's next appearance at court is scheduled for October 16th. Bail has been set at $508,000.

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