IPR Counterfeiting is on the Rise, Reports WCO

The WCO (World Customs Organisation) has released its 2022 Illicit Trade Report (ITR), showing an increasing trend in illicit trade.

The report focuses on seven key risk areas within customs enforcement: anti-money laundering and counter-terrorism financing, cultural heritage, drugs, environment, intellectual property rights (IPR) and health and safety, revenue, and security.

In the July issue of Authentication & Brand News™, we covered the revenue section of the report, highlighting the global illicit trade in tobacco and alcohol products. This month, we turn our attention to the IPR section, covering counterfeit non-medical goods, and illicitly traded and smuggled medical products.

Most counterfeited product

With 43.7 million units reported, non-medical IPR products decreased by 5.5% in 2022. Among the 16 product categories identified in the report, counterfeit accessories topped the seizure list, with more than 17,300 cases comprising more than 3.55 million units. Clothing came second with more than 12,200 cases (2.7 million units), followed by footwear (11,700 cases), watches, mobile phones, games, toys and others. Textiles and spare parts were among the few products to witness a substantial decrease in 2022, dropping by more than 800,000 pieces for textiles and 700,000 for spare parts.

There was a notable increase in medicine trafficking in 2022, with more than 189.4 million units seized. Although the number of seizures fell from 11,794 in 2021 to 5,399 in 2022 (a decrease of 54%), the quantity of illicit medicine seized increased by a massive 80% (84 million units) in 2022.

Nervous system agents were the largest intercepted medicine category in 2022, representing 57% of the total quantity. After metabolic agents, this category also recorded the second largest number of seizures (1,244). Although this frequency decreased by 13% in 2022, the confiscated quantity increased by 40% relative to 2021.

Mail is preferred conveyance method

Mail was the most frequent conveyance means for counterfeit goods in 2022, with 78% of seizures carrying more than 4.4 million pieces (5%). The US was the leading reporter of mail seizures, accounting for 65% of the total, followed by Austria (12%) and Germany (7%). Mail was the primary conveyance method for accessories, clothing, and footwear.

With regard to quantities, vessels came first, transporting 70% (30.4 million) of counterfeited goods, recorded in 4,366 (8%) seizures. Vessels were used for transporting toys, audio-visual products, and toiletries/cosmetics.

Other than that, air seizures were also common, representing 7% of total seizures, and 3% of total quantity. Vehicles conveyed almost the same quantities as mail, but the frequency was much less (1,564, or 3% of total seizures).

Asia top for departures

Asia Pacific emerged as the largest region for departures of IPR goods, with more than 22,900 seizures (45%), including more than 30.8 million pieces (71%). The leading destination for these goods was the Americas and Europe, with the Americas receiving 56% of goods (12,941), and Europe 38% (8,772).

Despite the relatively low number of seizures destined for the Middle East and North Africa from Asia Pacific (405 or 2%), they represented large quantities (3.8 million). The same applied to Eastern and Southern Africa, which was subject to only 15 seizures containing more than 1.3 million pieces.

Chile and the US reported the maximum number of seizures, receiving more than 19.5 million counterfeit pieces (22%). Chile recorded the highest rise in 2022 in terms of both pieces and seizures. While the US was subject to fewer seizures in 2022, it remained the second biggest destination in terms of quantities.

Overall, members in all WCO regions re-confirmed that the threat of IPR crime is global, and called for enhanced cooperation and data intelligence.

The 2022 Illicit Trade Report is currently available in English, with the French version set to be released shortly.

Readers can download the full report at https://www.wcoomd.org/en/media/newsroom/2023/june/the-world-customs-organization-releases-the-illicit-trade-report-2022.aspx.