Customs: over 300,000 counterfeit products confiscated in 2021
Federal Minister of Finance Magnus Brunner presents 2021 Product Piracy Report – Number of seized consignments up some 150% year on year – Sharp rise in illegal medicine smuggling of around 650%
Trademark and product piracy often presents health as well as economic risks. To warn people about these risks and raise awareness, the Federal Ministry of Finance has published its Product Piracy Report every year since 2006 and also submits it to the National Council.
The number of consignments seized in 2021 increased by some 150% compared to the previous year, driven primarily by fakes sold online and delivered by post. Overall, Austrian customs officers intercepted and confiscated 8,210 consignments containing 317,814 counterfeit products worth a total of EUR 12.3 million based on the original price of the goods. This also resulted in an increase in legal proceedings to 14,808 sets of proceedings, up some 122% year on year. Anyone ordering fakes online can face both civil and criminal prosecution and be landed with substantial fines.
“Product piracy and infringing the rights of law-abiding manufacturers and dealers is a huge problem for our economy,” said Brunner during the presentation of the Product Piracy Report. Intellectual property rights have to be protected and asserted in order to support upstanding business owners.”
One particularly curious incident demonstrates how the world of e-commerce is now awash with counterfeit products: the massive rise in the previous year was due primarily to a single Chinese sender, who posted several thousand consignments containing ultra-cheap, fake brand items (mainly clothes, shoes, bags, wallets and face masks bearing the logos of various rights holders) to Austria between the end of 2020 and March 2021. The Customs Authority Austria responded quickly to this flood of consignments and carried out targeted checks accordingly, thus managing to prevent the fakes from entering the country. After this, the situation largely returned to “normal”, and the number of counterfeit items seized in the post fell back to the previous year’s level.
Record amount of fake and illegal medicines
The latest figures for seized fake and illegal medicines are also particularly alarming: the 7,983 seizures by customs officials represent a rise of 133% on 2020. The depressing record in all this is claimed by the 2.62 million medicines that were confiscated – 650% more than in the previous year. This record number is due primarily to a single case of medicine smuggling involving 2.16 million tablets of pseudoephedrine, a chemical needed to make the drug methamphetamine (“crystal meth”). Even though this particular case was associated with international drug crime, it also shows how closely related drug and medicine smuggling are and how gangs of smugglers are clearly operating in both “areas of business”. The fake medicines are mainly counterfeit copies of well-known active ingredients or brands of potency medicines.
The fact that seizures of the dewormer Ivermectin positively exploded in 2021 is also extremely concerning. A total of 41,719 tablets of this medicinal product were confiscated in 837 seizures during targeted checks by Austrian customs in 2021, primarily in mail distribution centres. This included 33,394 tablets in 743 consignments between September and December 2021 alone.
“The conditions in which fake medicines are manufactured, stored and transported do not even come close to pharmaceutical industry standards,” explains Gerhard Marosi, a product piracy expert at the Federal Ministry of Finance. “The result is often medicines that are contaminated with harmful substances, are over- or underdosed or are completely ineffective.”
These counterfeit products are sold via online portals that give consumers the impression of authenticity and respectability. In fact, these illegal schemes are often a front for organised crime in particular, which has no regard whatsoever for the health damage and financial loss caused to deceived customers or the subsequent costs to society.
Sectors in which property rights play a key role employ some 30% of Austria’s workforce – over 1.2 million people. They are also responsible for around 44% of GDP. It is therefore all the more worrying that, according to studies by the OECD and the European Union Intellectual Property Office (EUIPO), counterfeit products and related smuggling activities are increasing all the time, thus putting these jobs at risk.
“As well as harming the Austrian economy through lost sales, fake medical products pose a huge risk to consumers and especially to people who are ill and who rely on the curative effect of their medicines,” Brunner says. “The outstanding work done by all our customs officers also remains extremely important, because it is only thanks to the targeted checks of post and online sales they do every day that we are able to take such large volumes out of circulation and protect people and the economy against these kinds of fraud.”
The 2021 Product Piracy Report, which contains more figures, dates and facts, is published on the Federal Ministry of Finance’s website (in German), from where it can be downloaded: https://bit.ly/3iO8ZmX
You can find photographs at https://bit.ly/36FLF8l