Finance Minister Blümel presents 2020 Product Piracy Report Customs officers seize 56 979 counterfeit products in 2020: "Risks affect not just Austria as a centre of economic activity, but all aspects of safety, from health to toys"
In 2020, Austrian customs officers seized 3 317 shipments containing 56 979 counterfeit products with a total value of almost EUR 24 million, based on the original price of the goods. Such are the figures contained in the 2020 Product Piracy Report submitted annually to the National Council by the Ministry of Finance. The number of confiscated shipments has thus increased by 60% compared with 2019. The resulting sets of legal proceedings have almost doubled on 2019, to 6 661, since a single confiscated shipment often comprises multiple counterfeits affecting several rights holders.
Goods constituting product piracy have a direct impact on Austria as a centre of economic activity
"The protection and assertion of intellectual property rights is one of the most important driving factors for innovation and economic growth. This is particularly important now in order to enable the economy to start growing again following the coronavirus crisis," reflects Finance Minister Gernot Blümel during the presentation of the Product Piracy Report in the Ministry of Finance.
In Austria, 29.6% of all jobs, affecting over 1.2 million workers, are created through intellectual property rights intensive industries. 43.6% of GDP relates to this type of industry. This is evidenced by an updated study, published in September 2019 by the European Observatory on Infringements of Intellectual Property Rights (EUIPO) jointly with the European Patent Office, on the contribution of intellectual property rights intensive industries to economic output in the EU. "A strong customs mechanism protects both consumers and the economy. For this reason, I wish to thank all customs officers who, through their controls, have removed counterfeit goods from circulation before they were able to enter the market," adds Blümel, reflecting on the potential impact on the national economy of product piracy.
A particular challenge for customs officials consists of counterfeit goods sold over the internet. Goods ordered on the internet are imported into Austria in small consignments by post or using courier services. In 2020, using these channels, a total of 3 044 shipments were seized containing counterfeit goods ordered online, i.e. 91.94% of all such cases. 7.88% of all cases were imported into Austria by air.
Sobering record levels of counterfeit or illegal medicines
Counterfeit or illegal medicines in particular are increasingly being shipped in small packages or letters. According to a study by the OECD and the EUIPO, across the EU 96% of pharmaceutical products confiscated by customs authorities during the period from 2014 to 2016 were sent by postal and courier services. In Austria, 2020 saw the impounding of 345 966 counterfeit and other types of illegal medicine across 3 420 seizure operations. The customs administration has never recorded so many cases in one year. Compared with 2019, the number represents an increase of more than 58% (from 2 161 to 3 420). Similarly, the quantity seized, totalling 345 966 items, was the second highest ever recorded by the administration.
The conditions under which counterfeit and illegal medicines are produced, stored and transported do not come even close to pharmaceutical industry standards. The resulting product often consists of medicines contaminated with harmful substances or containing incorrect quantities of active ingredients, whether higher or lower, or indeed products which are entirely ineffective. Online portals, giving consumers the impression of authenticity and respectability, play their part in the distribution of purported medicines, which often comprise substantial risk. In fact, it is primarily organized crime that is behind these illegal schemes, with the perpetrators having no regard for the health or financial damage to deceived customers or the consequential costs to society. "Lack of knowledge as to ingredients, production and distribution channels of smuggled medicines and healthcare products should deter anyone from buying outside a licenced pharmacy!" warns Gerhard Marosi, product piracy expert at the Federal Ministry of Finance, highlighting the risks of using products of uncertain origin.
Danger lurking in children's products
97% of hazardous counterfeit goods recorded between 2010 and 2017 by RAPEX, the European Commission's rapid alert system for hazardous non-food products, present a serious risk. For well over one third of these, exposure to hazardous chemicals and toxins was reported as the most frequent risk. Direct or long-term exposure could in such cases lead to acute or chronic health problems. One quarter of the hazardous products recorded as counterfeits were indeed recorded as presenting more than one hazard to consumers. Toys are the most common products, followed by clothing, textiles and fashion items. 80% of goods reported in the EU as hazardous and counterfeit are intended for children as end consumers (toys, childcare products and children's clothing).
Last year, the Austrian customs administration succeeded in removing from circulation 23 370 counterfeit toys, games and electronic games consoles having a total value of EUR 871 865 (based on the original price of the products). In addition, in the context of targeted controls examining product safety, the importation of 1 490 toys was prevented. 241 096 toys were only permitted to be imported following modification, for instance through retrospective furnishing of conformity and inspection certificates, or retrospective addition of a missing label. In total, therefore, in 2020 the customs administration succeeded in stopping 265 956 counterfeit or unsafe toys.
Finance Minister Blümel is clearly concerned: "When our customs officers impound products intended for the members of our society most in need of protection, whether sick people or children, as in this case, it gives me particular pause for thought." For this reason, he is all the more convinced that, "By removing counterfeit goods from circulation before they can be distributed on the market, the Austrian customs administration is protecting competition, trade and investment and, not least, consumers themselves."
The Product Piracy Report 2020, with further figures, dates and facts, is published on the website of the Ministry of Finance - bmf.gv.at - under 'Customs' and 'Product piracy', where the Report is available as a download (in German)