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Counterfeit products fuel organised crime

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While counterfeit items weaken the EU economy, they strengthen organised crime. Because these products are illegal, they are underpinned by a black market that weaves through different countries and sometimes even different continents. While purchasing a counterfeit might seem innocent enough, supporting these products indirectly supports crime.

Criminal organisations have helped turn counterfeits into a multi-billion euro industry by manufacturing and trading illicit goods on a regional and, increasingly, global scale. This is problematic for a variety of economic reasons, but the effects transcend money: According to Interpol, revenue generated by counterfeiting is often used to fund other illegal activities such as drug trafficking, human trafficking and robbery.

Europol, the European Union’s law enforcement agency, points out that decreased spending power among European consumers has inspired counterfeiters to introduce new product lines, many of which betray the EU’s health and safety regulations. Therefore, in addition to ‘typical’ counterfeited goods like luxury clothing, organised crime groups have also expanded into daily consumer products like food and medicine.

Finally, because criminal organisations have a disregard for laws, the EU misses out on billions of euros in lost tax revenue. Thus, in addition to the thousands of jobs lost to counterfeiting – which itself decreases tax revenue because it puts people out of work – unpaid taxes are yet another effect of counterfeit goods.

How counterfeits affect the EU

In addition to the moral corruptness of counterfeit items, these products have a real effect on the European economy. This data, compiled by the European Commission, shows the variety of sectors and industries affected by counterfeit items.

  • In 2012, EU customs enforcement detained roughly 40 million articles of fake goods at EU borders, with an overall value of nearly €1 billion.
  • Postal and courier packages accounted for around 70% of customs interventions in 2012, with 23 % of postal traffic detentions concerning medicines. The most popular counterfeited medicines are lifestyle medicines such as diet pills or Viagra-type pills.
  • The top three categories for detained articles in 2012 were cigarettes (31 %); ‘other’ goods such as bottles, lamps, glue, batteries and washing powder (12 %); and packaging materials (10 %).
  • Morocco was the main source for detained foodstuffs, and Hong Kong the main source for CD/DVDs and other tobacco products.
  • An EU Member State, Bulgaria, was the main source for detained packaging material, which as a category account for nearly 10 % of all detained items.

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