Industry Research: Counterfeiting and Serious Crime

This blog post was written by Hadrien Valembois, INTA Policy Officer, Europe 

To mark World Anticounterfeiting Day, the European Observatory on Infringements of Intellectual Property Rights (the Observatory) released two reports on June 10 that underscore the negative global impact of counterfeiting both in economic terms and in its link to other serious crimes.

They are:

• The 2020 update of its Status Report on IPR Infringement: Why IP Rights are important, IPR infringement, and the fight against counterfeiting and piracy.
• The joint report with Europol, IP Crime and Its Link to Other Serious Crimes: Focus on Poly-Criminality​.

1. Counterfeiting: An economic, health, and safety plague for EU citizens

The first report focuses on the negative economic impact counterfeiting has for the EU economy at large (GDP, jobs, tax revenues, etc.). This report is an aggregate of several previous reports and studies carried out by the European Union Intellectual Property Office (EUIPO) over the last year.

The report makes the economic case that counterfeiting is a plague for the EU economy. For example, up to 3.3 percent of world trade and 6.8 percent of EU imports, valued respectively at EU 121 billion globally per year, and EU 15 billion for the EU countries, are fake goods.

As noted by the Observatory’s Director, Paul Meier, “The average cost to build a full-fledged hospital for 500 persons is around EU 450 million. So the EU 15 billion    would correspond to nearly 33 hospitals that could be built in the European Union.”

This report also stresses that counterfeiting has a dangerous impact on EU citizens’ health and safety. Putting forward the findings of its recent joint study on counterfeit medicines (March 2020), the Observatory shows that medicines that treat serious diseases are being counterfeited.

This was further evidenced during the current COVID-19 crisis with several reports highlighting the rise of fake and unsafe COVID-19-related medical products in the EU territory and globally. The prevalence has been deemed so serious that the European Anti-Fraud Office (OLAF) launched an investigation to fight fakes.

INTA actions:

• Last year, INTA produced a “Brands Manifesto’” that highlights safety concerns relating to counterfeit products, along with the many benefits brands have on creating EU jobs, supporting EU SMEs, contributing to consumer trust, and fighting climate change.
• INTA dedicated an anticounterfeiting policy dialogue in Brussels last December to health and safety concerns, with representatives of the EU Commission; the European Observatory on IPR Infringement; and the toy, car and consumer goods industries.
• INTA is working directly with law enforcement, including Europol and OLAF, to share information about emerging criminal activities or changes in modi operandi in counterfeiting related to the COVID-19 crisis.
• In light of the COVID-19 crisis, INTA also recorded a short video raising awareness of the health and safety dangers of counterfeiting.
• INTA is holding several webinars worldwide on the rise of counterfeiting in relation to the the COVID-19 crisis.
• Finally, INTA’s suggested proposals to include counterfeits as unsafe products are included in several amendments to the ongoing parliamentary report on “Addressing Product Safety.” We are working to keep these included in the final report.

2. Counterfeiting: A serious crime often linked to other serious crimes

Through case examples, the second report emphasizes that IP crime is a serious one, tied to criminal organizations or networks, and is most often linked to other serious crimes such as drug trafficking, child labor, manslaughter, bribery and corruption, or money laundering. 

The report concludes that “IP crime is often seen as ‘victimless’ crime, causing relatively ‘little’ harm. However, in many cases IP crime can cause damage to the health and well-being of consumers, the environment and society.”

INTA actions:

INTA supports appropriate authorities tackling IP crime as they do other serious crimes, and having the dedicated resources to do so. INTA has been reaching out to EU Member-States for them to include IP crime, notably counterfeiting, when they submit criminal priorities for the European multidisciplinary platform against criminal threats for the EU Policy Cycle 2022–2025.