Fake goods and financial crime & terrorism. Are you participating?

Bizarrely, in many countries, it is not illegal to make and/or sell and/or buy counterfeit goods. for example:-

• United States: Trafficking in counterfeit goods, including production, transport, and sale, is illegal. However, purchasing counterfeit goods for personal use is not illegal.
• However, owning counterfeit goods, including clothing, in Italy, is illegal. Italian law is quite strict on this matter. According to Articles 473 and 474 of the Italian Criminal Code, not only is the sale and distribution of counterfeit goods illegal, but even possessing counterfeit items can lead to fines and other penalties. Italy has been known to fine tourists who purchase counterfeit goods, such as fake handbags. The authorities take counterfeiting seriously due to its impact on the economy and the involvement of organised crime in producing and distributing these goods.

With this in mind, many consumers are looking for great deals as they prepare for year-end festivities—BUT DO THEY EVER ASK AT WHAT COST?

A new report from Europol and the European Union Intellectual Property Office (EUIPO) warns that scammers and organised crime networks use legal entities and loopholes to avoid detection by authorities and profit from consumers’ appetite for low prices with fake products.

The report, 'Uncovering the Ecosystem of Intellectual Property Crime: A Focus on Enablers’,

• https://www.europol.europa.eu/cms/sites/default/files/documents/Uncovering_the_ecosystem_of_IP_Crime.pdf

The report illuminates the sophisticated methods that scammers and organised crime groups employ to commit intellectual property (IP) crime and exploit consumer behaviours.

It underlines the extensive impact of IP crime on broader society, driven by counterfeit goods and pirated content.

According to the report, approximately 86 million fake items were seized in the EU in 2022 alone, with an estimated total value exceeding EUR 2 billion.

The study emphasises that while consumers are drawn to low-priced goods, their decisions inadvertently support a range of other serious crimes, including cybercrime, money laundering and even environmental crime.

João Negrão, Executive Director of the EUIPO, stresses the importance of consumer awareness:

• "When consumers opt for counterfeit products or are misled into buying fakes, they receive substandard goods and contribute to a shadow economy that undermines legitimate businesses and fuels other criminal activities.
• It's essential to understand the actual cost of counterfeit goods – a cost that extends beyond the price tag and impacts our society's well-being."

Consumers’ health and safety are jeopardised as sub-standard or falsified pharmaceuticals emerge from hazardous clandestine laboratories, exposing workers and the public to harmful substances.

Moreover, the digital domain has become a battleground, with cybercriminals crafting sophisticated fake web shops that sell counterfeit goods and harvest consumers' sensitive payment information, further entangling IP crime with cybercrime.

Catherine De Bolle, Executive Director of Europol, adds:

• "Organised crime groups continuously innovate to exploit consumer demand for counterfeit and pirated goods.
• They are not only selling fake products but are also stealing personal data and exposing consumers to dangerous products.
• It's a double-edged sword where consumers are victims and, unknowingly, enablers of these criminal networks."

Overall, the report highlights the increasing sophistication of IP criminals. Organised crime networks stretch beyond borders, importing, exporting, and producing counterfeit goods, primarily made in China, including Hong Kong and Türkiye.

According to the report, the actors in these operations are not amateurs. They avail themselves of legal structures at all stages of IP crime and select jurisdictions where it’s difficult for EU law enforcement to shut them down or where penalties are low. In many cases, fake goods are produced outside the EU and finalised with tags, fake logos, and packaging at European sites.

SOURCE

• https://www.europol.europa.eu/media-press/newsroom/news/dark-side-of-fake-goods
• https://www.europol.europa.eu/publications-events/publications/uncovering-ecosystem-of-intellectual-property-crime
• https://www.europol.europa.eu/cms/sites/default/files/documents/Uncovering_the_ecosystem_of_IP_Crime.pdf