ISO 22380:2018

INTERNATIONAL ISO
STANDARD 22380
First edition
2018-08
Security and resilience —
Authenticity, integrity and trust for
products and documents — General
principles for product fraud risk and
countermeasures
Reference number
©
ISO 2018
© ISO 2018
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ii © ISO 2018 – All rights reserved

Contents Page
Foreword .iv
Introduction .v
1 Scope . 1
2 Normative references . 1
3 Terms and definitions . 1
4 General principles for product fraud risk and countermeasures .2
4.1 Evaluation of situational context of product fraud . 2
4.1.1 Considering the product fraud opportunities . 2
4.1.2 Evaluating the product fraud risk . 2
4.2 Classification of intention and motive of product fraud . 3
4.3 Classification of product fraud activities . 4
4.4 Classification of product fraudsters . 5
4.5 Profiling and conducting a risk assessment of product fraud . 6
4.5.1 Profiling product fraud . 6
4.5.2 Risk assessment . . 6
4.6 Selection and implementation of countermeasures . 8
4.6.1 Approaches and strategies . 8
4.6.2 Selecting countermeasures based on ROSI and risk level . 9
4.7 Effectiveness assessment of countermeasures .10
Annex A (informative) Examples of profiling, risk assessment and countermeasures .11
Annex B (informative) Decision making on security countermeasure investments .12
Bibliography .14
Foreword
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iv © ISO 2018 – All rights reserved

Introduction
There is evidence that virtually every type of product fraud has been committed, including counterfeiting
of infant formula, prescription drugs, consumer goods and after-market parts for automobiles, aircraft
and nuclear power plants. A large number of individuals or organized criminal groups are committing
product fraud, with various motivations, such as financial gain, which is threatening global public
health and safety. The public health and safety risks associated with product fraud are diverse and
significant when the products are distributed through legitimate global supply chains. Examples
include lethal amounts of melamine in infant formula, medicines with little or no active ingredients,
aircraft replacement parts that fail and substandard electrical cords that catch fire.
Classical crime prevention strategies begin with an analysis of the situational contexts of a criminal
offence in order to find the structural opportunity of a particular crime. Next, specific types of crime
are classified according to modus operandi (MO) together with types of criminal intention and motive.
Then, the types of criminal offenders and their behaviours are examined to determine how to prevent
or deter the crime.
This document starts with understanding the external and internal situational context of product fraud.
It considers causes of the fraud, such as product marketplaces and product fraud-related opportunities.
It then examines the intentions and motives for product fraud, the types of product fraud, the types of
product fraudsters and strategic countermeasures that can be taken against product fraud.
A better understanding and classification of intentions and motives, product fraud activities and
fraudsters leads to a better selection of countermeasures. Product fraud countermeasures include
profiling product fraud, risk assessment and the selection/implementation of bespoke countermeasures.
Figure 1 illustrates how a strategy for product fraud countermeasures and control as a continual
process starts from an analysis of the situational context of product fraud, moves through several
classifications of product fraud and fraudsters, and results in the selection/implementation of bespoke
countermeasures and their effective assessment.
Figure 1 — The continual process for a product fraud countermeasures and control strategy
INTERNATIONAL STANDARD ISO 22380:2018(E)
Security and resilience — Authenticity, integrity and trust
for products and documents — General principles for
product fraud risk and countermeasures
1 Scope
This document establishes general principles for an organization to identify the risks related to various
types of product fraud and product fraudsters. It provides guidance on how organizations can establish
strategic, business countermeasures to prevent or reduce any harm, tangible or intangible loss and cost
from such fraudulent attacks in a cost-effective manner.
This document is applicable to all organizations regardless of type, size or nature, whether private or
public sector. The guidance can be adapted to the needs, objectives, resources and constraints of the
organization.
This document is intended to promote common understanding in the field of product-related fraud risk
and its countermeasures.
2 Normative references
The following documents, in whole or in part, are normatively referenced in this document and are
indispensable for its application. For dated references, only the edition cited applies. For undated
references, the latest edition of the referenced document (including any amendments) applies.
ISO 22300, Security and resilience — Vocabulary
ISO 31000:2018, Risk management — Guidelines
3 Terms and definitions
For the purposes of this document, the terms and definitions given in ISO 22300 and the following apply.
ISO and IEC maintain terminological databases for use in standardization at the following addresses:
— ISO Online browsing platform: available at https: //www .iso .org/obp
— IEC Electropedia: available at https: //www .electropedia .org/
3.1
product fraud
wrongful or criminal deception that utilizes material goods for financial or personal gain
Note 1 to entry: Fraud means wrongful or criminal deception intended to result in financial or personal gain that
creates social or economic harm.
Note 2 to entry: Products include electronic media carried on material goods.
Note 3 to entry: Fraud related to digitally transmitted electronic media shall be considered separately.
4 General principles for product fraud risk and countermeasures
4.1 Evaluation of situational context of product fraud
4.1.1 Considering the product fraud opportunities
The organization should base its fraud control strategies on a proper understanding of the intentions,
motives, nature and types of the fraud and the fraudster.
The organization should consider all of the three elements (fraudster, victim/target and poor
guardianship) essential in crime occurrence for its basis of applied crime prevention.
Crime occurs when a motivated fraudster and suitable target come together in a time and a place,
without a capable guardian present.
Product fraudsters commit fraud crime when they perceive that a specific fraud target is vulnerable,
there are sufficient rewards from fraud attacks, and there is no or weak guardianship and
countermeasures for deterring, delaying, hindering or stopping their attacks. The vulnerability is
referred to as “fraud opportunity”. This is based on the “rational choice” theory in criminology, which
states that people commit crime when they perceive the risk of offending to be low and the rewards to
be high, as illustrated in Figure 2.
Figure 2 — The crime triangle for product fraud opportunity
The organization should distinguish between product fraud and financial fraud insofar that product
fraud is always related to products whereas financial fraud is broader and is not necessarily related to
products.
The main elements of financial fraud are pressure, opportunity and rationalization. The fraudsters in
financial fraud are usually employees, whereas the fraudsters in product fraud are varied, as suggested
in Table 4.
4.1.2 Evaluating the product fraud risk
The organization should evaluate the situational context of product fraud. It should understand the
factors that significantly influence the product fraud risk and the effectiveness of countermeasures.
Evaluating the external situational context of product fraud risk includes the following:
— the social and cultural, political, legal, regulatory, financial, technological and economic context;
— the natural and competitive environment, whether international, national, regional or local
marketplaces and the supply chain;
— key drivers and trends that have an impact on the particular products and brand-owners;
— relationships with, and perceptions and values of, external stakeholders.
2 © ISO 2018 – All rights reserved

Evaluating the internal situational context of product fraud risk includes the following:
— governance, organizational structure, roles and accountabilities;
— policies, objectives and the strategies that are in place to achieve them;
— capabilities, which are understood in terms of resources and knowledge (e.g. capital, time, people,
processes, systems and technologies);
— information systems, information flows and decision-making processes (both formal and informal);
— relationships with, and perceptions and values of, internal stakeholders;
— the organization’s culture;
— standards, guidelines and models adopted by the stakeholders.
4.2 Classification of intention and motive of product fraud
The organization should classify the intentions for product fraud, see Table 1:
— deceptive products are products that are placed into supply chains with the intent to deceive the
consumer into believing that the product is genuine in every way;
— non-deceptive products are products that do not try to deceive the consumer into believing the
products are genuine by their positioning in the market, whether through the type of retail outlet in
which they are sold (flea markets, etc.), their price (exponentially low) or quality (poor).
Even if the distributors and sellers of non-deceptive products do not try to deceive the consumer
into believing the products are genuine, they are still product fraudsters because they have deceived
intellectual property rights (IPR) holders.
Table 1 — Taxonomy of product by intention
Intention of deception Description
Products that are placed into supply chains with the intent to deceive the
Deceptive product
consumer into believing that the product is genuine.
Products that do not try to deceive the consumer into believing the products are
Non-deceptive product
genuine.
The organization should also classify the motives for product fraud, see Table 2:
— recreational product fraud means fraudulent acts committed for entertainment, amusement, fun or
just thrill;
— occasional product fraud means rather passive fraudulent acts that occur infrequently or
opportunistically;
— occupational product fraud means insiders’ fraudulent acts at their place of employment, either as
an individual or with the organization’s knowledge;
— professional product fraud means fraudulent acts that fully finance the fraudster’s lifestyle as their
full-time, or almost full-time, job;
— activism product fraud means fraudulent acts committed by domestic or international terrorists
who are making an ideological or political statement or intend to economically harm an entity.
[ ]
Table 2 — Types of motives for product fraud 13
Motives Description
Recreational product fraud Fraudulent acts for entertainment or amusement.
Occasional product fraud Fraudulent acts committed infrequently or opportunistically.
Fraudulent acts at a place of employment, either by an individual or with the
Occupational product fraud
organization’s knowledge.
Professional product fraud Fraudulent acts that fully finance a fraudster’s lifestyle as their job.
Individuals or groups who commit fraudulent acts to make an ideological or
Activism product fraud
political statement or to harm an entity.
4.3 Classification of product fraud activities
The organization should classify the types of product fraud and their potential consequences,
see Table 3.
The types of product fraud listed in Table 3 stretch the traditional definitions of IPR violations or even
of property theft.
In each case, some component or statement is fraudulent. For example, a stolen product is fraudulent
when re-introduced into the supply chain unless the seller admits it is stolen; if they admit it is stolen, it
is still a crime.
Each case represents a public health and safety risk for the consumer and a benefit for the fraudster.
For example, stolen goods that generate revenue for the fraudster may have spoiled due to mishandling,
which is a health hazard for the consumer.
Counterfeiters also use stolen goods to fool suspicious customers by first providing them with a
genuine, but stolen, product before then replenishing orders with fraudulent products.
[ ]
Table 3 — Types of product fraud 14
Potential
Type Description Examples
consequences
Counterfeit pressure gauge case
To simulate, reproduce or
[4]
in Germany .
modify a product or its pack- Human or environmental
Counterfeiting
aging without authorization harm (safety risks).
UK insurer links rising electri-
(see ISO 12931).
[5]
cal fault fires to counterfeits .
Application and implementa-
TM
IPR tion of technical capabilities Workmate cases of
Economic harm to IPR holders.
infringement covered by intellectual unauthorized use of patent.
property rights.
Adulteration of infant formula
Low quality or unsafe
Adulterant- A component of the finished by melamine in China. Estimat-
products leading to human
substance product is fraudulent. ed 300,000 victims including
or environmental harm.
[6]
the death of 6 infants .
Dangerous, misleading con-
A legitimate product but
Acetaminophen re-marking old sumer information leading
Tampering packaging or security ele-
[7]
chips as new chips . to human or environmental
ments are altered.
harm.
Misleading consumers and
Complete or partial unde-
regulators with possibly
clared replacement of authen- Substitution of horsemeat for
Substitution unsafe components or ingre-
[8]
tic components or ingredients beef in the UK .
dients leading to human or
with a substitute.
environmental harm.
4 © ISO 2018 – All rights reserved

Table 3 (continued)
Potential
Type Description Examples
consequences
Illegitimate product designed “Knock-offs” of popular prod- Inferior quality leading to
Simulation to look like but not exactly ucts not produced with the same human or environmental
[9]
copy the legitimate product. product safety assurances . harm.
Shipment of discounted retrovi-
Shortages or delays of relief
ral medicines to central African
product to needy populations.
Sale or distribution of countries re-sold to northern
Diversion products outside of intended European countries at normal
Difficulties in recall of
markets. prices. Relief product redirect-
products leading to human
ed to markets where aid is not
or environmental harm.
[10]
required .
[11]
A legitimate product stolen Stolen products mixed with Economic loss; loss of control
Distribution of
and passed off as legitimately legitimate products in an online in distribution channel; tax
stolen goods
procured. shopping cart. evasion.
Contracted textile/garment
A legitimate product made
companies producing more
in excess of contractu
...