The Impact of Counterfeit Products on the Global Economy
In recent times, with the increasing trend of online shopping, fraudsters are attempting to profit from this market by selling counterfeit products. However, these activities not only pose a threat to human health but also lead to significant economic losses.
According to data from the American Chamber of Commerce, counterfeit products annually cause more than 500 billion dollars in damage to the global economy. To mitigate this striking economic loss, brands and countries have begun taking determined steps towards raising awareness and taking action. These measures represent an important start in reducing the impacts of counterfeit products and creating a safer consumer environment.
Consumers are facing significant challenges in both health and safety due to the existence of counterfeit products, while governments are also encountering substantial losses due to unpaid taxes. Income generated through counterfeiting is associated with criminal activities such as drug trade, money laundering, and terrorism, posing a serious problem. Counterfeit products used to finance such crimes represent a threat to the security of societies. As of 2023, it is expected that the trade in counterfeit goods will exceed 5% of global trade. This indicates that the economic impact of counterfeit products is growing, resulting in more significant losses.
According to a report published by German Finance Minister Christian Lindner and the President of the Customs Authority, Colette Hercher, German customs officials seized a total of 434 million euros worth of counterfeit goods last year, representing an almost 40% increase compared to the previous year. Thanks to measures taken by the German government, the quantity of seized goods is decreasing: in 2021, approximately 18.8 million counterfeit products were seized, while German customs reported that about 8.6 million counterfeit products were seized for 2022
In operations conducted, particularly in the Camden area of North London, counterfeit clothing, handbags, and watches estimated to cause approximately £5 million in losses to the industry were seized.
The operation, led by the Intellectual Property Crime Unit (PIPCU) of the City of London Police, resulted in the seizure of counterfeit products from two separate stores. An official statement regarding the operation highlighted the significant increase in counterfeit product sales in Camden over the past few years. It was noted that the discovery of approximately 2,000 counterfeit handbags in just one store alone, estimated to cause a £2 million loss to the industry, reflects the magnitude of the issue.
Furthermore, it was reported that 2,487 counterfeit football jerseys, jewelry, and watches were seized in another store, believed to result in an estimated £3 million loss to the industry. In the second store, counterfeit handbags with a value of £2 million were found
The effects of counterfeiting are not only seen in annual financial reports and tax estimates but also directly impact many workers. Marcus Evans, Deputy Director of Intelligence and Law Enforcement at the Intellectual Property Office (IPO), stated, "It is estimated that the sale of counterfeit products contributes to more than 80,000 job losses in the UK each year."
In 2023, as in 2022, the most common country of origin for counterfeit goods was the People's Republic of China. Based on the quantity of seized goods, approximately 80% of seized counterfeit goods originated from China. The second-highest contributor, accounting for 8% of seized goods, was Hong Kong, which is a special administrative region of China. Among other significant countries of origin, Turkey, making up about 5% of the total seized goods, and Taiwan, Vietnam, and Ukraine, each with approximately 2% share, are notable
Counterfeit products, which are becoming an increasingly significant threat to the global economy, cause irreversible harm to both manufacturers and consumers. CounterFake aiming to solve this problem, protects both consumers and manufacturers more effectively with its advanced artificial intelligence infrastructure with each passing day.