The infringement of intellectual property rights is a widespread phenomenon in the EU. Cheap counterfeit copies of popular goods remain highly popular with consumers. Criminals are able to produce counterfeit goods in large quantities at minimal costs and use online platforms to easily and effectively market their products internationally. Counterfeiting and piracy are terms used to describe a range of illicit activities related to Intellectual Property Rights (IPR) infringement. Most counterfeit goods infringe a trademark, which means that a good is produced without the authorisation of its rights holder. OCGs are increasingly involved in the violation of IPR.
OCGs produce a wide range of counterfeit goods and manufacture sub-standard goods distributed on EU markets including food and beverages, pesticides and pharmaceutical products. Counterfeit and sub-standard goods pose significant risks to the health and safety of consumers.
China remains the source country of most of the counterfeit goods trafficked to the EU. The trade in goods between the EU and China has expanded significantly in recent years. China is the biggest source of imports to the EU by far.
POLY-CRIMINAL OCG INVOLVED IN THE TRADE IN COUNTERFEIT GOODS AND DRUG TRAFFICKING
In 2015 and 2016, Europol supported an operation targeting an Italian OCG selling counterfeit champagne in various Member States. Investigations in Italy and Germany revealed that some of the suspects were also involved in the trafficking of cocaine. During house searches in Germany, investigators seized more than 12,000 bottles of fake champagne. The investigation also uncovered links to VAT and excise fraud.
In 2015, more than 80,000 seizures were registered by customs authorities in the EU. These shipments contained more than 40 million articles worth an estimated EUR 642 million. Cigarettes remain the most frequently seized counterfeit product accounting for 27% of all seizures, followed by other goods such as batteries or air fresheners at 10% as well as toys at 9%. Regular household items such as body care articles, medicines, electrical household goods represent 25.8% of the total number of seized counterfeit products.
Online marketplaces are the key distribution channel for counterfeit goods. The sales volume of counterfeit goods online has increased significantly over recent years. Counterfeiters use social media platforms to advertise their products and steer potential consumers to online sales platforms. The sale of counterfeit goods online is closely related to the increasing use of parcel and postal services to distribute counterfeit products, which is difficult to detect among an increasing flow of licit goods sold online and sent via postal freight.
While the counterfeiting of pharmaceuticals previously primarily affected lifestyle medicines, counterfeiters increasingly target almost all types of medicinal products including cancer medication and various types of medical devices.
Counterfeit goods not only cause losses in unpaid duties and taxes, but also reduce the sales volume, profits and investments of legitimate businesses. This removes incentives for investment in research, development and innovation.
Thousands of online shops are used to sell counterfeit goods. In 2016, Operation In Our Sites (IOS) resulted in the seizure of 4,780 domain names and associated online shops selling counterfeit merchandise.
The distribution of counterfeit pharmaceutical products online is particularly dangerous. In 2016, Operation Pangea IX specifically targeted online vendors of counterfeit medicines. The operation resulted in the seizure of potentially dangerous medicines worth more than EUR 50 million.