The major Italian eyewear companies and those belonging to some other industrial sectors are up in arms against recent legislation, voted by the Italian Parliament at the end of July, that makes it mandatory for Italian brand owners to place a label with the country of origin on any of their products that are manufactured abroad and imported into the Italian territory from Aug. 15. According to the new legislation, which has created a lot of confusion, the importation of products without an origin label or with a false «Made in Italy» label will be considered counterfeited items, representing a criminal offense? punishable under Italian law with six months to four years of imprisonment and a fine of between €2,500 and €35,000.

The Italian government has yet to clarify the issue, which seems to run counter to the free circulation of merchandise inside the European Union. Pending such a clarification, some major Italian eyewear companies have been importing products made in the Far East through other more liberal European countries.

Italian authorities had already revised the country's anti-counterfeiting legislation at the end of 2003 through a provision that made it an offense to import, export or otherwise place in circulation products bearing a false «Made in Italy» label, or private labels that may mislead the consumer as to the true origin of the product. But until now there was no obligation to indicate the product's actual origin. With the new Article 17 embedded in a complex piece of legislation voted by Parliament last July 23, it becomes a criminal offense to use «an Italian brand name on products or goods produced outside Italy ? which do not bear the precise and clear indication of their origin or place of manufacture or production.» The amendment also increases the related penalties - from a maximum of one-year in prison and a €20,000 fine, to the new maximums of four years and €35,000.

The laws introduced in recent years aimed to slow down the invasion of counterfeit products such as handbags and eyewear manufactured overseas and imported into Italy. Most of these imports come from the Far East, but industry officials note that some are produced in clandestine workshops and factories operating in Italy that allegedly practice various forms of forced labor ? including child labor - and are often under the thumb of the Chinese mafia. This black market is not just an Italian problem; it exists in most European countries.

There have been numerous discoveries by the Italian police of huge quantities of counterfeit products, the most notorious case occurring just a few weeks ago when almost 600,000 pairs of counterfeit eyewear were seized by the Milan finance police in the Milan and Varese areas during a raid called «Overlook.» Two Chinese citizens were arrested and released on bail, charged with counterfeiting and receiving and selling counterfeit products. Some 588,997 pairs of eyewear were seized, valued at €4-6 million, including some most prestigious brands of sunglasses and prescription and children's glasses. All the confiscated goods were totally devoid of any safety features and about to be released onto the Italian market at an average price of €7 a pair. The most frequently counterfeited brands are Armani, Chanel, Dolce & Gabbana, Burberry, Gucci and Dior. Around 60,000 of the confiscated products were prescription glasses, also devoid of any guarantee of safety for the user.

The newest anti-countefeiting law was introduced somewhat surreptitiously by the an extreme right-wing party, Lega Nord, which has a number of ministers in Italy's current center-right government, and has created many other problems. The new law was meant to protect small craftsmen in all sector, including eyewear, who manufacture products in their local workshops and facilities, often on a contract basis. These small businesses in Northern Italy, and the small shop owners, are an important component of the Lega's electorate.

Among the opponents of the new law are the major eyewear producers who get their lower-end eyewear models made mainly in the Far East. They state that they don't put a «Made in Italy» label on products manufactured in China, but they wish to be treated on a par with their European competitors. As the law concerns counterfeiting by Italian brands, but not by those of other European countries, it implies that a German company could quite legitimately sell in Europe - Italy included - Mercedes eyewear produced totally in China, with no obligation to label the product «Made in China.» A Honda automobile may be imported into Italy with a «Made in Italy» label, but a Fiat Panda made in Poland will no longer have this prerogative.

Italian industrialists are consequently demanding that the law be extended to cover all European countries, and not just Italy. The Italian government has requested passage of a directive by the European Union that would require labels of origin on many times of products imported from non-EU countries, but it has been unable to get sufficient support for it from the other members states.

Vittorio Tabacchi, who not only owns Safilo but is also chairman of Anfao, the organization that represents Italy's eyewear industry, has sounded the alarm, claiming that the whole Italian eyewear industry - and thousands of jobs - are at risk. He is asking the Italian government to scrap the new law, or at least freeze it pending a verdict by the EU.

Because of the new law, Italian firms are starting to import their goods through customs offices located in other countries such as Spain or the Netherlands, where there is no mandatory labelling of origin. Others are claiming that their goods were in transit on Aug. 15 and therefore not subject to the new law.

Trapped by the intransigence of the Lega's attitude, the Italian government is desperately seeking a solution: From one week to the next, new solutions have been announced and then put off until the following week. One option is to make labels of origin optional again like before for products made in Italy, which also applied to items that are simply assembled in the country from components made abroad. In the current state of affairs, an Italian firm whose goods are held up at customs for want of a label of origin would be in a position to take the Italian government to the European Court of Justice with charges of unfair treatment and violation of free trade between European firms.