Statistics just published by the European Commission show a significant increase in the amount of counterfeit and pirated articles seized at the EU’s external borders in 2006. Customs officials seized more than 250 million of such articles in 2006 compared with 75 million in 2005 and 100 million in 2004. Medicines, cigarettes and other goods that can seriously damage the health of consumers continue to be faked in large quantities. Changes in the routes used by criminals to trade in fake goods, the use of the internet and the transport of small quantities by air or postal traffic make customs job even more challenging. However, customs’ reply has never been as high as in 2006 with more than 36.000 seizures, an increase of around 40% compared with 2005.
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How do counterfeit seizures in 2006 compare with previous years?
The statistics for 2006 show that the number of cases treated by customs involving goods infringing intellectual property rights, as well as the number of articles seized have never been so high. In 2006, customs intercepted more than 250 million counterfeit and pirated articles. This represents an overall 330% increase in 2006 in the number of counterfeit and pirated goods seized by Customs at the external borders of the EU.
The 2006 statistics show an increase in almost all sectors of goods. Particularly worrying is the increase in medicines and products for personal care, as these products could potentially harm the health and safety of consumers.
The more traditional sectors of counterfeit goods, namely clothing and luxury goods have shown again another big increase this year.
The figures have shown a decrease in the quantities of goods seized by customs, in only two areas, namely the food sector and the computer equipment sector.
Why has there been such increase in seizures in 2006?
There are several possible reasons. The increased seizures indicate better working methods used by customs based on risk management. During the course of 2006, the RIF management system, enabling the electronic exchange of risk information was further developed, leading to better coordination between Member states.
The increase in cases treated show that customs made more selections in 2006 and included some extremely large seizures, which certainly had an effect on this years’ high increase.
The increase may also reflect the growth in trade of such goods, though it is probably a combination of these factors.
The figures nevertheless underline the need to maintain customs work on Intellectual Property Right (IPR) enforcement a priority.
Which are the most counterfeited articles?
More than 60 per cent of the articles seized in 2006 were cigarettes.
Although cigarettes represent such a large proportion of all seizures, seizures of other products also increased dramatically since the previous year. The amount of goods seized in 2006, other than cigarettes, was more than double the equivalent amount in 2005. This is also a reflection of the trend towards diversification in the products that are subject to counterfeiting and piracy.
What is the most counterfeited medicine?
Without a doubt, medicines such as Viagra, Cialis and Levitra are the most popular counterfeited medicines. However, other serious medicines such as anti-cholesterol, anti-osteoporosis or medicines to control hypertension are also found as counterfeit medicines.
In 2006, where did the counterfeit goods come from?
In terms of overall quantities seized, China remains the main source for counterfeit goods, with over 80 % of all articles seized coming from there.
In the medicines sector, India is the number one source, followed by the United Arab Emirates and China. Together these 3 sources are responsible for more than 80 % of all counterfeit medicines. In other cases, other countries predominate; in the food sector Turkey remains the main source and in the electrical equipment sector Malaysia has become the main source.
However, new countries of origin have figured in the statistics (such as Algeria, Egypt, Turkey and the United Arab Emirates). It is possible that these countries are identified as the source country due to a significant numbers of transhipment operations being carried out there, rather than the actual manufacturing of the fake goods themselves.
Which means of transport are most used to import fake goods into the EU?
The breakdown by means of transport shows that air and postal traffic accounted for almost 80 % of the total of all cases treated by Customs. Due to the nature of the different types of transport, seizures involving sea traffic invariably lead to bigger quantities.
Does the Commission have an estimation of the amount of money the counterfeiting market represents?
No, the Commission does not have reliable figures on this. However, the Commission has some figures on the losses counterfeiting represents for national budgets in terms of excise and customs duties.
It is conservatively estimated that the cigarettes seized (150 million packets of cigarettes) during the course of 2006, represent potential losses in customs duties and taxes for the European Community and Member States’ budgets of more than 460 million euros.
What about EU anti counterfeiting actions, such as Operation DAN?
The Commission organises some anti-counterfeiting actions in cooperation with the Member States.
Operation DAN, for instance, was carried out in September 2006. A total of 92 containers were seized, containing a wide range of products including fake toys, sunglasses, shoes and imitation car parts. This joint operation took place over three weeks in the autumn of 2006 and involved ports in 13 EU Member States. It was co-ordinated by the European Commission and controls were focused on counterfeit goods from China.
Is the seizure of counterfeit products only a matter for customs authorities?
Customs have a prime role in stopping the international movement of fake goods; in fact the majority of all seizures made globally are done by Customs as first line of defence when protecting our borders.
Customs are also the only enforcement agency assigned with a specific mission under the World Trade Organisation’s Trade Related Intellectual Property Rights (TRIPS) Agreement.
However, it is clear that co-operation with other actors needs to be enhanced if the counterfeit problem is to be kept under control, such as cooperation with other law enforcement authorities and with business.
In most Member States, law enforcement authorities other than Customs are assigned to control and seize counterfeit goods within their territories, for example at open markets or where production of such goods is discovered on their territory.
The problem of counterfeit within the internal market is covered by the so-called Enforcement Directive, which was adopted in 2004. Its implementation should be supported by the recent Commission proposal introducing penal sanctions for a more efficient enforcement of intellectual property rights within the internal market.
How effective is the cooperation with the USA?
The Commission is building up a close cooperative relationship with the US. The conclusions of the recent EU-US Summit on 30 April included a re-affirmation of the joint commitment to fight IPR infringement and those conclusions will be taken forward by the Commission in the coming months.
What type of cooperation does the Commission envisage with China and other “producing” countries?
We are further strengthening our co-operation with Chinese Counterparts through various activities. EU Customs’ experts have been to China and have worked together with Chinese Customs in several Chinese ports and airports and have exchanged experience on Risk Analysis techniques.
We are also working on a specific Supply Chain Security Pilot Project with the aim of tightening and securing “end to end” supply chains between Asia and Europe. Particular emphasis will be laid on having “secure lanes” for sea containers moving from China to Main European Maritime ports.
Source: European Commission
