“Counterfeit fashion items head list of EU Border seizures” discovers Kroll analysis

Over 207,000 counterfeit watches worth a combined €172 million were seized at the borders of EU countries in 2017, making them by far the highest value type of fake product intercepted. That’s according to new analysis by Kroll (a division of Duff & Phelps), a global leader in the field of risk mitigation and investigative services.

Kroll warns that the criminal gangs involved in counterfeiting are, in some cases, using the manufacture, distribution and sale of these products to generate funds to pay for other serious criminality such as terrorist operations.

The firm’s review of EU customs enforcement data reveals that after seized watches, whose collective retail value increased by 56% from 2016 to 2017, fake clothing was the product type with the next highest collective value (€66 million, up 46%). Jewellery and other accessories came in third place (€58 million), up a massive 562% since 2016, followed by bogus bags (collectively valued at €52 million).

With the all-important Christmas season approaching, toy manufacturers and retailers should be concerned by the high volume of counterfeit toys in evidence, with those detained at EU borders last year worth almost €22 million. In total, over 31 million items collectively worth over € 580 million were seized in 2017. That’s actually down 24% on the previous year.

Kroll states that, while the number of customs seizures have decreased overall, it has seen an increase in counterfeiting activity and was involved in the seizure of over €50 million worth of counterfeit goods in 2017 close to where they were produced, suggesting that efforts designed to track and seize bogus goods in the country of manufacture before they reach customs are having a positive impact.

However, with criminal gangs becoming more sophisticated in transporting illicit goods across borders, manufacturers and retailers still face a difficult battle against counterfeit goods coming in from all over the world.

Significant financial and reputational threat

Benedict Hamilton, managing director at Kroll, commented: “Counterfeit goods pose a significant financial and reputational threat to manufacturers and retailers. They can present a real Health and Safety hazard for consumers as well. The counterfeit goods trade can be highly lucrative so it attracts some serious criminal groups. There’s strong evidence to suggest that some of those groups are running counterfeit operations in order to pay for deeper and darker criminality such as terrorist attacks, making it even more important to prevent them from doing so.”

Hamilton continued: “We’re working with more and more brands to stop the problem higher up the chain by mapping the sale of counterfeit goods all the way up to the producers and shutting them down. Many businesses have historically dealt with the threat of counterfeit activity by making themselves ‘hard targets’ in a variety of ways such as making their products difficult to copy, forming partnerships with law enforcement authorities or educating vendors about how to avoid the risks. Increasingly, brands want us to go further by helping them to find the producers of bogus goods, take them out of the market with civil or criminal proceedings and then, where possible, recover funds.”

China is the country of provenance with the highest percentage of suspected counterfeit goods detained and subsequently not released (73%) at EU borders. It’s followed by Hong Kong (10%), Turkey (4%), Vietnam (3%), Syria and India (both 2%). However, Kroll observes that the picture is often more complex, with gangs within or closer to Europe organising criminal activity, but using components from Asia, for example.

Other product types that saw sharp increases in the value of counterfeit goods detained in 2017 included sports goods (up 423%), foodstuffs (up 159%) and vehicles and accessories (up 68%).

The country with the highest number of interventions at its borders in 2017 was Germany (18,888) followed by Belgium (13,786) and Italy (3,907). The UK had the tenth highest number of interventions (at 1,076).

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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