Counterfeiting is growing at a fast pace across the world. Different reports show disturbing figures related to counterfeiting.
According to Global Brand Counterfeiting Report, “The amount of total counterfeiting globally has reached 1.2 Trillion USD in 2017 and is bound to reach 1.82 Trillion USD by the year 2020 which includes counterfeiting of all equipment/products from defense equipment’s to counterfeiting of watches.”
The report also states that losses incurred by luxury brands because of the sale of counterfeiting through the internet accounted for 30.3 Billion USD.
A report by OECD states that trade in fake goods is 3.3% of the world trade.
Link between counterfeiting and criminal activities
The above-mentioned figures clearly point towards the high growth of counterfeiting over the last few years, however, counterfeiting has also led to the growth of other criminal activities.
Many organized criminals deal in the sale of counterfeit goods as it is a lucrative business and there are less severe punishments to deal with it. With the penetration of the internet in far-flung places, criminals are making huge profits by selling counterfeits in the e-commerce space.
So, what do these criminals do with the money made by selling counterfeit goods? In most cases, they use it to fuel other criminal activities like human trafficking, illegal arms trade, drug trade, and even terrorism.
One can remember the Charlie Hebdo attacks in France in which many people died. The gruesome attacks were carried out by selling fake sneakers. Many international organizations have established a close link between counterfeiting and other criminal activities.
Counterfeiting is a growing menace across the world. The crime promotes other heinous crimes and the vicious cycle continues without an end. However, counterfeiting can be prevented by increasing consumer awareness, strict implementation of regulatory measures and ensuring the use of anti-counterfeiting solutions.
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International law enforcement and market experts have established a close link between counterfeiting and other forms of criminal activities. It has been found that the counterfeiting business helps criminals to fuel other illegal activities and vice-versa. EUROPOL (European Union Agency for Law Enforcement Cooperation) has even warned that counterfeiting is an increasingly attractive avenue for organized crime syndicates to diversify and increase their illicit businesses.
It has also been found that counterfeiters use similar routes and modus operandi to supply counterfeit goods as they do to smuggle drugs, firearms and human trafficking. Profits from other crimes and illicit activities also help in the production and distribution of counterfeit goods. Many reports from different countries have established the fact that profits from crimes like drug trafficking and other crimes were used to promote the business of counterfeiting and, similarly proceeds from the sale of duplicate goods were used to promote the criminal’s other illicit activities.
One of the main reasons why criminals choose counterfeiting over other criminal activities is due to its favourable ratio between potential profits and possible risks. According to Executive Director, UNODC (United Nations Office on Drugs and Crime) Yuri Fedotov, “In comparison to other crimes such as drug trafficking, the production and distribution of counterfeit goods present a low-risk/high-profit opportunity for criminals. Counterfeiting feeds money laundering activities and encourages corruption. There is also evidence of some involvement or overlap with drug trafficking and other serious crimes.”
As per trade, reports counterfeiting is now placed amongst the highest income sources for organized criminal activities. Counterfeiting or duplication also helps in money laundering by providing a platform through which criminal organization can invest the proceeds of their illicit activities. In a nutshell, organized crime syndicates use counterfeiting as a medium to optimize their other criminal activities.