The latest Intellectual Property Crime Threat Assessment produced jointly by Europol and the European Union Intellectual Property Office (EUIPO) reveals that the distribution of counterfeit goods has greatly increased during the COVID-19 pandemic. The health crisis has presented new opportunities for the counterfeit trade, and criminals have adjusted their business models to meet their new global demand.
- Criminal networks have quickly adapted to the new opportunities and demand for products generated by the pandemic.
- Counterfeit cosmetics, food, pharmaceuticals, pesticides and toys pose a serious threat to consumer health.
- Counterfeiting now relies heavily on the digital domain to source components and distribute the goods (tangible and non-tangible) to consumers through online platforms, social networks and instant messaging services.
- The majority of counterfeit goods distributed in the European Union are produced outside the EU.
The report, based on EU-wide data and operational information from Europol, confirms that counterfeiting and piracy continue to pose a serious threat to health, security and also to the European economy. Imports of counterfeit goods amounted to €119 billion in 2019, accounting for 5.8% of all goods entering the European Union, according to the latest data from the OECD.
The assessment highlights that, although the majority of counterfeits in the EU market are produced outside the territory, mainly in China and other parts of Asia, manufacturing within the EU is a growing trend.
The increasing import of counterfeit packaging materials and semifinished products into the EU clearly indicates the presence of illegal manufacturing facilities in the EU. European-based criminal networks involved in intellectual property crime distribute imported counterfeits and, in some cases, operate in modern production facilities that assemble semifinished products.
The report provides data to understand the scope of this criminal phenomenon and calls for concerted action in response as we move into the post-COVID phase.
Prominent counterfeit items include mobile phones, and their accessories and components. They are sold in large quantities during events such as Black Friday or Cyber Monday. Furthermore, counterfeiters have recently been exploiting global supply shortages of semiconductor chips.
When it comes to perfumes and cosmetics, illicit production concerns everyday goods such as shampoo, toothpaste or detergent. The trade in illicit pesticides continues to be a low-risk, high-profit activity, due to high demand and low penalties for offenders.
The Covid-19 pandemic also led to an increased supply of illicit digital content, which is often linked to other cybercriminal activities. Piracy is now primarily a digital crime, and websites that illegally distribute audiovisual content are hosted on servers in Europe, Asia and the Middle East.