Counterfeits cause billions in annual losses worldwide

© Johanna Mühlbauer / Fotolia.
The international trade with illegal imitations causes financial damages of up to 340 billion euro each year, according to a new study. This represents some 2.5 % of all world trade. In 2008, this figure stood at an estimated 1.9 %.

The US, Italy, France, Switzerland, Japan, and Germany count among the most heavily affected countries. Within the EU, counterfeit and illegally manufactured products together constitute some 5% of all imports, equivalent to an annual value of 85 billion euro. This was explained in a joint report issued by the OECD (Organisation for Economic Co-operation and Development) and the EUIPO* (European Union Intellectual Property Office) on the global economic consequences of product and brand piracy.

It’s notable that China now belongs to the countries most affected by piracy, although some 84% of all counterfeits confiscated worldwide originate in the People’s Republic and its special administrative region, Hong Kong.

According to the study, the most commonly counterfeited items are shoes and clothing, leather products, and electronic devices. Watch and jewelry manufacturers are also heavily affected, as are producers of medical products and toys.

More than 60% of the counterfeited products are currently sent by mail, according to the EUIPO and the OECD, while air and sea shipments only make up some 20% and 9% of total imports respectively. The report claims that these numbers reflect the increasing importance of internet sales, which cause an increase in the number of small shipments. Packages with fewer than ten products now account for some 43% of all confiscated shipments.

The EUIPO the OECD also emphasise in the report that the trend towards globalisation often makes it possible for counterfeiters to avoid prosecution. “There isn’t an international legal or enforcement framework with which to confront the problem,” explained Candice Li, Vice President of the International Anti-Counterfeiting Coalition (IACC). Even if counterfeiters are held to account, the punishments are often too mild. „Nobody is sitting in jail for taking fake shampoo or bouillon cubes across international borders,“ criticised Hans Schwab, founder of the website Illicit Trade Monitor.

António Campinos, Executive Director of the EUIPO, accordingly emphasised the significance of the new report on the consequences of piracy: „Governments across the world need reliable, evidence-based data to allow them to assess the danger that counterfeiting and piracy pose at national, EU and international level. This report will help them in that task.“

The report from the EUIPO and the OECD evaluates the economic consequences of the international trade with counterfeits on the basis of data from nearly a half-million customs confiscations between 2011 and 2013.

*Formerly OHIM (Office for Harmonization in the Internal Market).

Sources: EUIPO, OECD, The Economist

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