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Counterfeiters Adapted and Thrived During COVID-19, Europol Finds

The COVID-19 pandemic bashed up supply chains, pulverized business plans, and stifled social lives. But one industry continued to thrive during the pandemic: counterfeiting.

Approximately 66 million counterfeit items were seized by authorities in the EU in 2020 compared to 76 million in 2019, according to the latest Intellectual Property Crime Threat Assessment, a report produced by Europol and the European Union Intellectual Property Office (EUIPO). In 2019, imports of pirated or counterfeit goods reached €119 billion—representing 5.8 percent of all goods entering the EU.

“Counterfeiting is a highly lucrative activity for the criminal networks involved, which reap large profits while running relatively few risks,” Europol noted in a news release.

The pandemic may have reduced the value of counterfeited goods somewhat, but the types of counterfeit items changed since the start of COVID-19, with more demand for clothing accessories, packaging material, recorded CDs and DVDs, labels, tags, and stickers, potentially signaling a shift in operations, with more counterfeit goods being manufactured or finished within the EU.

Counterfeiters have become highly adaptable during the pandemic, quickly pivoting operations and product focus or marketing to take advantage of opportunities. Criminal organizations are also highly reliant on digital outlets for sourcing components and distributing products, using online platforms, social media, and instant messaging services. Clothes and clothing accessories in particular are promoted through live-streaming sales, videos, and sponsored advertising on social media, “targeting customers with deceitful offers of discounts or low-price branded products,” the report explained.

While counterfeited clothes and luxury products continue to represent a large portion of seized goods, there is a growing trade in counterfeit medicines, food, beverages, cosmetics, and toys, Europol noted. IP right infringements have impacted shampoo, toothpaste, cosmetics, and detergents, and the production of illicit food products, especially drinks, is increasingly sophisticated.

In 2020, foodstuffs (cookies, pasta, potato chips, and sweets most frequently) were the second most commonly seized products on the EU’s internal market. Goods that infringe intellectual property rights were found in illegal warehouses, laboratories, supermarkets, stores, restaurants, and transportation companies.

“Counterfeit food and drink products are often produced in settings with inadequate hygiene, using substandard and even harmful ingredients,” the report said. “As such, they constitute a significant risk to the health and safety of consumers.”

Counterfeit alcoholic beverages remain the most frequently seized item of fake food or drink, and enterprising criminals take advantage of festivals or public celebrations to move their product quickly and to met emerging demand.

The trade in counterfeit pharmaceuticals has been increasing over recent years, and the number of counterfeit medicines seized at the border by EU customs authorities reached 1,172,076 units in 2019. The production of illicit pharmaceutical products frequently takes place within the EU in illegal laboratories, although they are difficult to detect and supply multiple distributors.

“The distribution of counterfeit pharmaceutical products has shifted from physical to online markets, relying on dedicated platforms, such as online pharmacies, as well as some of the most widely used social media platforms,” according to the report. “Most trading activity is believed to take place on the surface web. Some pharmaceutical products are also distributed via Dark Web platforms.”

Online pharmacies also let counterfeiters pose as legitimate vendors, and the pharmaceuticals are widely advertised and offered for sale on social media platforms.

Criminal groups have offered a wide range of medicines, including fake anti-cancer drugs, psychiatric drugs, and self-testing kits for HIV and other infections.

“The COVID-19 pandemic has presented new business opportunities for criminals to distribute counterfeit and substandard goods,” said Europol Executive Director Catherine De Bolle in a statement. “At best, these products will not perform as well as authentic ones. At worst, they can fail catastrophically.”

The COVID-19 pandemic presented new opportunities for criminals. They distributed counterfeit and substandard goods, including pharmaceuticals and personal protective equipment. In some cases, counterfeiters infiltrated legal supply channels to introduce counterfeit foods into the supply chain.

Criminals have also refilled vials of COVID-19 vaccines and tried to sell the fakes. Others offered unlicensed products for the prevention of COVID-19.

“The distribution and use of counterfeit medicines and medical supplies can cause significant direct harm to the health of victims,” the report said. “Some fake medicines contain less/no active ingredients compared to the genuine products. In some other cases, counterfeit pharmaceuticals contain more potent ingredients or greater concentrations that can have extreme consequences for human health. In some cases this has caused death by overdose when the counterfeit medicines are laced with fentanyl.”

De Bolle added: “Law enforcement seizures indicate that the production of these goods is increasingly taking place within the EU, while the COVID-19 pandemic has further entrenched the criminals’ reliance on the digital domain to source and distribute their illegal goods. This report shines a light on the extent of this criminal phenomenon and calls for concerted, cross-border action in response as we enter the post-COVID economic recovery. The unscrupulous counterfeiters should be the only ones paying a steep price.”