Illicit trade in counterfeit and pirated goods poses a major challenge to an innovation-driven global economy. It damages economic growth; poses significant threats to individual and collective health and safety; fuels organised crime; undermines sound public governance, the rule of law and citizens’ trust in government; and can, ultimately, threaten democracy and political stability. The COVID-19 pandemic has accelerated illicit trade, alarming law enforcement in many parts of the world.

Illicit trade in fake goods is a significant and growing threat in a globalised and innovation-driven economy. Its damaging effects on governance, innovation, the rule of law and, ultimately, on democracy cannot be underestimated.

This study presents an updated quantitative analysis of the value, scope and magnitude of world trade in counterfeit and pirated products. Based on data for 2019, it estimates that the volume of international trade in counterfeit and pirated products amounted to as much as USD 464 billion in that year, or 2.5% of world trade.

Globalisation, policies for improving trade facilitation and the rising economic importance of intellectual assets are important drivers of economic growth. These intangible assets in the global context have shifted the attention of industry and policymakers to intellectual property (IP). For modern industries, IP is one of the key value generators and enablers of success in competitive markets, and for policymakers it plays a crucial role in promoting innovation and driving sustained economic growth.

Following the approach taken in the (OCDE, 2008[9])) report and the (OECD/EUIPO, 2016[1]) and (OECD/EUIPO, 2019[3]) reports, the analysis in this report is based on international trade statistics and customs seizures of infringing products.

This chapter presents a set of initial snapshots of the trade in fakes based on raw customs-seizure data.

The raw seizure data presented in the previous chapter do not take into account the general economic context, nevertheless they can be used as input for further statistical analysis. This is presented in the current chapter that summarizes the main results of the GTRIC analysis and our subsequent understanding of the trade in counterfeit and pirated goods. There are two areas in this analysis: the identification of key economies of provenance (i.e. the GTRIC-e) and the industry scope of the trade in counterfeit and pirated goods (i.e. the GTRIC-p).

Intellectual property rights are of fundamental importance for the competitiveness of the EU economy as a whole. At the macroeconomic level, the IP-intensive industries have generated on average 45% of the EU GDP between 2014 and 2016. This corresponds to EUR 6.6 trillion annually. In addition, IP-intensive industries contributed directly to 29.2% of employment.

The ongoing COVID-19 pandemic has triggered an enormous crisis that has had and will continue to have a significant impact on the illicit trade in counterfeit goods. Closures of some businesses and disruptions in transport methods have led to significant distortions in supply chains. In all these cases, criminals have leveraged these opportunities to make illicit profits.

This study presents the updated quantitative analysis of the value, scope and magnitude of world trade in counterfeit and pirated products, using the same GTRIC methodology as in the previous (OECD/EUIPO, 2016[1]) and (OECD/EUIPO, 2019[3]) reports. In 2019 international trade in counterfeit and pirated products amounted to as much as USD 464 billion. This figure excludes domestically produced and consumed counterfeit and pirated products, and pirated digital products distributed via the Internet. It represents up to 2.5% of world trade, compared with estimates of up to 3.3% of world trade in 2016 and 2.5% in 2013.