Internal Market, Industry, Entrepreneurship and SMEs

Trends in trade in counterfeit and pirated goods: the updated picture

Trends in trade in counterfeit and pirated goods: the updated picture
Published on: 19/03/2019
Author: Organisation for Economic Cooperation and Development (OECD) and the EU Intellectual Property Office (EUIPO)
This study presents an updated quantitative analysis of the value, scope and magnitude of world trade in counterfeit and pirated products for 2016.

In March 2019, the OECD and the EUIPO published the joint study, 'Trends in trade in counterfeit and pirated goods', which

  • presents the overall scale of this trade and discusses which parts of the economy are particularly at risk
  • looks at the main economies of origin of fakes in global trade
  • analyses recent trends in terms of changing modes of shipment and the evolution of trade flows

It uses a tailored, statistical methodology and is based on data for 2016, combining trade data and data from nearly half a million customs seizures by international enforcement agencies, including the World Customs Organization, the European Commission’s Directorate-General for Taxation and Customs Union, and the United States Department of Homeland Security. Structured interviews with trade and customs experts also contributed to the analysis.

Effects and magnitude of the phenomenon

Between 2013-16, the share of trade in counterfeit and pirated goods as a proportion of global trade grew very significantly. Moreover, this growth was reported during a period of relative slowdown in overall world trade. Consequently, the intensity of counterfeiting and piracy is on the rise, with significant potential risk for intellectual property (IP) in the knowledge-based, globalised economy.

Main findings

  • In 2016, the volume of international trade in counterfeited and pirated products could amount to as much as €460 billion (this amount does not include domestically produced and consumed counterfeit and pirated products, and pirated digital products distributed online). This represents up to 3.3% of world trade, compared to 2.5% of world trade in 2013.
  • In 2016, imports of counterfeit and pirated products into the EU amounted to as much as €121 billion. This represents up to 6.8% of EU imports, compared to 5% of EU imports in 2013.
  • Counterfeit and pirated products continue to follow complex trading routes, misusing certain intermediary transit points (many of these transit economies host large free trade zones that are important hubs of international trade).
  • The share of small shipments in total volume of counterfeit trade appears to increase.
  • Fake products are found in a large and growing number of industries, such as common consumer goods (e.g. footwear, cosmetics and toys), business-to-business products (e.g. spare parts or chemicals), IT goods (e.g phones or batteries) and luxury items (e.g. fashion apparel or deluxe watches). Importantly, many fake goods, particularly pharmaceuticals, food and drink, and medical equipment, can pose serious negative health and safety risks.
  • While counterfeit and pirated goods originate from virtually all economies in all continents, China and Hong Kong continue to be by far the biggest origin countries.
  • Companies and businesses most affected by counterfeiting and piracy continue to be primarily based in OECD countries, such as the United States, France, Italy, Switzerland, Germany, Japan, Korea and the United Kingdom.
  • However, a growing number of companies registered in high income non-OECD economies, such as Singapore and Hong Kong, are becoming targets. In addition, a rising number of rights holders threatened by counterfeiting are registered in Brazil, China and other emerging economies. Counterfeiting and piracy thus present a critical risk for all innovative companies that rely on IP to support their business strategies, no matter where they are located.

Implications

This report shows just how significant the IP infringement problem is in economic terms based on solid economic and statistical methodologies and real data. It provides sound empirical evidence of the problem and emphasises the need for rapid, evidence-based European and international policy responses. The Commission intends to fully draw on these results in its upcoming policy initiatives in assessing how the IP enforcement framework in the single market should be modernised.

This study updates the results published in the 2016 OECD-EUIPO report, 'Trade in counterfeit and pirated goods: Mapping the economic impact'.

Study: Trends and trade in counterfeit and pirated goods