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10 June 2020TrademarksSarah Morgan

EU losing €15bn annually to counterfeiting

Governments across the EU lose up to €15 billion per year due to the presence of counterfeit goods, according to a newly-released report from the  European Union Intellectual Property Office (EUIPO).

The “ 2020 Status Report on IPR Infringement”, released today, June 10, said that reduced direct and indirect taxes, as well as social security contributions that are not paid by illegal manufacturers all contribute to the annual losses.

According to the EUIPO, counterfeiting is resulting in the EU losing approximately €19 billion of sales in the cosmetics and personal care sector, the wine and spirits sector, the pharmaceutical sector and the toys and games sector.

Just over 14% of the cosmetic and personal care sector’s sales (€9.6 billion) is lost annually due to the presence of counterfeits. This is an increase of more than €2.5 billion since the last analysis was published by the EUIPO in 2019, the highest increase across the sectors studied.

Across all sectors, sales decreased by an average of 6.4 % across the EU due to the presence of counterfeits, with direct lost sales amounting to €50 billion per year, corresponding to an employment loss of 416,000 jobs.

Last year, the EUIPO used data from the European Commission’s ‘Rapid Alert System for dangerous non-food products’ (RAPEX system)— the only system available to report measures taken by authorities against unsafe products found in EU/EEA countries—to analyse counterfeit and dangerous products.

The majority of recorded dangerous counterfeit goods were assessed as posing a serious risk and toys were the most frequent type of product followed by clothing, textiles and fashion items.

The end-users of 80% of the goods reported to be dangerous and counterfeit were children (toys, childcare items and children’s clothing).

Christian Archambeau, executive director of the EUIPO, said: “Counterfeiting is not a victimless crime. Fake products take sales away from legitimate businesses, and deprive governments of much-needed revenue.

“They carry clear health and safety risks for those who use them. But as our joint work with Europol shows, the proceeds from counterfeiting can also support serious organised crime. To fully tackle this, concerted international action is needed at all levels.”

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