MEMO/05/40

Brussels, 8 February 2005

Counterfeiting & piracy: Frequently Asked Questions

What types of counterfeit goods were most often seized in 2003?

Everything that can be sold is now being copied but in 2003 the most frequent seizures (32 million) continued to be compact discs, DVDs and cassettes. 33 million cigarettes were also seized. But most noteworthy was the 12 million seizures of children's toys and games, because it constitutes an increase of 996% over 2002. See Annex I.

How do you explain the decreases in seizures in 2003 compared to 2002 in some EU Member States (see Annex II)?

Counterfeiters' patterns and routes change all the time. They try every means of penetrating the EU with their products and vary their routes continually in order to achieve this. If the customs administration of one country catches them, they then try to bring their goods in to the EU by other routes. That is why the year following a very successful year in terms of counterfeit seizures is often less successful.

Where did the counterfeit goods come from?

60% came from China, 6% from Hong Kong, 3% from Malaysia, 2.5% from Taiwan, 2% from Benin, 2% from the United Arab Emirates, and 24.5% from other sources – see Annex III - but these sources may not necessarily be the real origin of the goods.

In order to maintain maximum secrecy about the location of their production sites, counterfeiting and piracy organisations do all they can to disguise the real origin of their products by sending them on round-about journeys through several countries and by minor routes. It is thus becoming increasingly difficult to determine the real origin of such goods.

Are any co-operation initiatives underway with the sources of the counterfeit goods?

A new EU agreement with the China on customs co-operation and mutual administrative assistance (see IP/04/599) is an important step forward in the fight against fraud and counterfeiting. Furthermore, the EU is organising an increasing number of customs training programmes in conjunction with its economic partners, particularly in the area of risk analysis and legislation.

What measures can customs authorities use to combat counterfeit?

An EU regulation (1383/2003/EC) that entered into force on 1 July 2004 (see IP/03/1059), as implemented by regulation 1891/2004/EC, is designed to improve the detection of counterfeit goods.

It sets out the conditions under which the customs authorities may intervene where goods are suspected of infringing intellectual property right and extends the scope of customs powers to new intellectual property rights. In addition, it makes it possible for counterfeit goods to be destroyed without the lengthy and expensive legal proceedings. This is of benefit notably where goods presenting a risk for the health and safety of consumers are concerned. It also enables right holders to apply free of charge to the customs authorities for action to prevent infringement of their rights, since the fight against counterfeit cannot be won without the active support of right holders.

Co-operation between customs administrations is also an important means of detecting this fraud and is ensured by means of regular seminars and sharing of information and best practice.

Finally, the EU uses agreements with its main trading partners to share information and experiences with customs administrations in these countries.

What are the trends so far in 2004?

The information received for the first nine months (see Annex IV) shows that more than 16,000 counterfeit cases were discovered compared with 7,000 for the first nine months of 2003. The number of seizures involved constituted an increase of more than 10% over the first nine months of 2003.

The results indicate a significant increase in the amount of foodstuffs, drinks, toys, clothes and leather goods seized.

Why is it necessary to combat counterfeit and piracy?

Counterfeit undermines every economic sector – industrial, literary and artistic. According to studies carried out by the OECD in 1998 and by the International Chamber of Commerce in 1997, counterfeit accounted for 5-7% of world trade (i.e. approximately 250 billion euro per year) and was responsible for the loss of 200,000 jobs in Europe. The World Economic Forum in 2003 estimated the cost of counterfeit and piracy at 450 billion euros.

But in addition, with the increase in recent years of counterfeit medicines, surgical equipment, toys, food and drink, this activity is presenting a growing health and safety risk for EU consumers.

Is the seizure of counterfeit products only a matter for customs authorities?

Within the EU, the Member States themselves designate the competent authorities for this purpose and the police may also be involved. But the fact that customs operate at international borders give them an essential role in this area. More than 70% of the total of counterfeit goods seized in the world are in fact seized by customs authorities.

(see also IP/05/147)

Breakdown by origin and by number of articles seized
2003 – ANNEX III
55025132
60%
5638494
6%
2004898
2,5%
2691985
3%
1620000
2%
1774723
2%
9560706
10,5%
13902762
14%

China
Hong Kong
Malaysia
Taiwan
Benin
UAE
Not com.
Others

[Graphic in PDF & Word format]