The total value of internationally traded counterfeits worldwide amounts to more than 450 billion euros each year, according to a new study by OECD and EUIPO. This means that trade in counterfeits now accounts for ca. 3.3 percent of world trade – and continues to grow.

Current estimates put the total value of internationally traded counterfeits at more than 450 billion euros per year – representing a large increase of around 10 percent from 2016. This is a finding of a new study by the OECD (Organisation for Economic Cooperation and Development) and EUIPO (European Union Intellectual Property Office) on the global impact of counterfeiting and piracy. The report calls the results “alarming” and states that “the intensity of counterfeiting and piracy is increasing.”

According to the report, the illicit trade in counterfeit and piracy accounts for about 3.3 percent of total world trade. In their previous report from 2016, OECD and EUIPO had put the figure at around 2.5 percent. In the EU alone, counterfeits worth around 118 billion euros are imported each year, the report says. This amounts to 6.8 percent of all imports – the last estimate was at 5 percent.

The countries currently most affected by IP infringements are the USA, followed by France, Italy, Switzerland, and Germany, as the study shows. However, businesses from emerging markets such as China and Brazil are also increasingly becoming targets. While the vast majority of fakes still originate from China and Hong Kong, OECD and EUIPO also highlight the United Arab Emirates, Turkey, Singapore, and Thailand as frequent countries of origin for counterfeits.

As was the case in 2016, shoes, clothing, and leather goods are among the products most frequently counterfeited, according to OECD and EUIPO data. Electric devices, watches, medical equipment, cosmetics, and toys are also heavily affected.

Increasingly often, counterfeit and illegally manufactured goods are being traded in small shipments via postal and express courier services: In more than two thirds (69 percent) of customs seizures from 2014 to 2016, the illicit goods were found in small parcels. This presents customs authorities with significant challenges and is becoming a growing problem for IP enforcement, according to the report.

Internationally inconsistent penalties for trafficking fakes also facilitate counterfeit trade. In addition, free trade zones apparently expedite the issue: According to the OECD and EUIPO analysis, reduced taxes as well as less stringent regulations and controls contribute to an increase in exports of fakes. The OECD says it is currently collaborating with member countries to develop formal guidelines to help stem the problem.

The OECD and EUIPO report Trends in Trade in Counterfeit and Pirated Goods uses data from nearly half a million customs seizures worldwide. Domestically produced and consumed fake goods or pirated products being distributed via the Internet are not included in the analysis.

Sources: OECD, EUIPO