China Is the Leading Source of Counterfeit Goods Found at EU Borders, Europol Says

Counterfeit luxury goods are displayed during a press conference following a record seizure at the customs headquarters in Hong Kong on Aug. 6, 2015. (Philippe Lopez/AFP via Getty Images)

Counterfeit and copyright-infringing goods smuggled into the European Union (E.U.) come primarily from China and Hong Kong, based on the seizures at the E.U.’s borders in 2019 and 2020, according to a recent report (pdf) released jointly by the European Union Intellectual Property Office and the European Union Agency for Law Enforcement Cooperation (Europol).

“IP [intellectual property] crime continues to constitute a substantial threat to the health and safety of consumers. Furthermore, it negatively impacts the E.U. economy,” the report stated.

By the report’s figures, counterfeit and pirated goods worth 119 billion euros ($130 billion) were imported into the European Union in 2019, comprising 5.8 percent of all E.U. imports that year. The report called these data “particularly concerning” amid efforts to recover from the economic devastation wrought by COVID-19 and move forward with post-pandemic stabilization.

The report made no effort to downplay the role of the pandemic in facilitating the illegal entry of IP-infringing goods. “The Covid-19 pandemic has presented new business opportunities for the distribution of counterfeit and substandard goods. Criminal networks involved in IP crime have been highly adaptable in adjusting their business model by shifting product focus and marketing,” it states.

But the “force majeure” factor of the pandemic does not in any way obscure the role of China-based counterfeiters. The report described China as highly active, along with Russia, in the provision of counterfeit cigarettes for smuggling into the E.U., calling those markets that feature high retail prices for tobacco products the most popular destination markets.

Typically, smugglers place illicit tobacco products in containers bound for international ports. When Belgian customs officials confiscated a record 126 million counterfeit cigarettes at three points in and around Antwerp in January 2020, it turned out that they had all originated from Asia, the report detailed.

Vehicles and spare car parts are another category in which China, including Hong Kong, tops the charts for counterfeit trade. In 2019 and 2020, more IP-infringing vehicles and parts and accessories of vehicles seized at the E.U.’s borders came from China than any other nation, with Turkey in second place.

“In part as a consequence of the disruption in the supply of spare parts during the COVID-19 pandemic, garages and motorists have increasingly sought to source parts through alternative channels. Counterfeit parts are increasingly appearing on the market, particularly online,” the report stated.

Concern about the use of online platforms in illicit trade has been growing in recent years.

In February, the Office of the U.S. Trade Representative published its “2021 Review of Notorious Markets for Counterfeiting and Piracy,” or Notorious Markets List for short. For the first time since the list’s annual publication began in February 2011, the 2021 list included e-commerce platforms owned by Chinese internet giants Alibaba and Tencent, among other serial violators of intellectual property laws.