FY2021 value $3.3 billion
Number of seizures 27,115
FY2016 value $1.4 billion
Number of seizures 31,560
FY 2011 value $1.1 billion
Number of seizures 24,792
* CBP data; “value” is at the “Manufacturers Suggested Retail Price” of an authentic item.
Here’s fashion magazine Allure with a closeup on the criminal fringe of the global manufacturing economy, through the lens of a 2016 seizure of counterfeit perfume in New York:
“Five men have been arrested in New York by U.S. Immigration and Customs (ICE) for knowingly selling counterfeit designer perfumes made with ingredients including antifreeze and urine across at least seven states … The authorities reportedly recovered approximately 10,000 boxes of the faux scents, whose ingredients included the aforementioned urine and antifreeze along with ‘other unpleasant, flammable, or dangerous chemicals that burn when applied to the skin.’ ”
Background: The most recent big-picture study of trade in counterfeits, a 2021 report from the OECD, estimated an upper limit of $464 billion worth of counterfeit goods flowing across borders in 2019. This would have been 2.5% of that year’s $19.8 trillion in goods exports — not much different from the 3.3% counterfeit share they estimated for 2016 and the same as their 2.5% estimate for 2013. By the OECD’s account, 90% of counterfeit goods come from five places — China, Hong Kong, Singapore, Turkey, and the United Arab Emirates — and the most frequently counterfeited products include shoes, clothes, perfumes and cosmetics (making Allure‘s New York arrest story a pretty representative case), along with watches and leather products like luggage and handbags.
U.S. counterfeit seizure statistics likewise seem to show a fairly stable level of counterfeit trade (or at least of interdictions of counterfeit goods) over the past decade, after a sharp rise in the 2000s. CBP’s FY2011 report tallied 24,792 seizures of counterfeit shipments (about 70 each day), and the 2016 report noted a higher total, at nearly 32,000. The 2021 total, at 27,115 seizures, was in between. Three ways to look at these totals:
(a) Number and kind of products: The 27,115 seizures in 2021 in turn brought in over 115,000 different “lines” of products, which reflect OECD’s report on the most frequently counterfeited goods fairly well: 73,367 seizures of counterfeit designer clothes, shoes, and luggage; 3,155 of personal products like the counterfeit perfumes, medicines, and medical products (including, in that troubled year, 35 million substandard masks and 38,154 useless or dangerous faux-COVID test kits); 5,380 sets of consumer electronics items, and 1,083 shipments of aircraft and auto parts.
(b) Origins: Here the U.S. statistics slightly differ from those of the OECD. As with OECD, they report China and Hong Kong as the top sources, accounting for 51,787 of the 115,000 “lines” of counterfeit goods, and also have Turkey in third with 10,781 lines. The remaining two are the Philippines with 6,416, and Colombia with 5,912.
(c) Transport methods: Counterfeit goods most frequently travel to the U.S. (assuming that CBP’s seizure statistics more or less accurately reflect the counterfeiting industry’s logistics choices) by express deliveries and mail shipments. CBP’s figures show 16,926 of the seized shipments arriving via express delivery, while 7,293 arrived by mail, 2,274 by maritime cargo, and 622 by unspecified other methods. The maritime cargo seizures, however, were apparently very large and valuable; weighted towards consumer electronics counterfeits, they accounted for $1.5 billion or half the total value of all seizures.
The amount of counterfeit goods which get all the way to consumers is by nature uncertain. The CDC, looking closely at medicine, says that “in high-income countries, such as the United States, less than 1% of medicines sold are counterfeit.” Medicines, though, are presumably an area where providers are especially cautious and law enforcement especially vigilant. CBP’s advice to consumers (and the message implicit in Allure’s graphic description of counterfeit perfume ingredients), though, is to be careful with what you buy: “Counterfeit products are low quality and can cause injuries or even death when used.”
Ewww – Allure (2016) on the gross ingredients and nasty side-effects of counterfeit perfume.
… and a similar report this week from CBP, on a seizure of 150 parcels containing 744 counterfeit Botox shipments this Monday in Louisville.
CBP’s one-page, three-point guide for consumer awareness.
CBP explains policy in Finance Committee testimony (2018).
… and from the U.S. Trade Representative Office, this morning’s “Special 301” report on intellectual property reviews counterfeiting law and enforcement on pp. 16-20.
U.S. seizure data:
The Customs Service’s annual reports on counterfeit seizures, by country and type of good, back to FY2003. Seizure counts rise steadily from the 5,973 of FY2003 to 14,675 in FY2007 and 19,959 in FY 2010, peak at above 31,000 in FYs 2016, 2017, and 2018, and then drop back a bit to the 27,115 of FY2002. Next update likely in September.
And direct to last year’s figures.
World picture:
OECD on the $461 billion world of counterfeit trade as of 2019.
… and also from OECD, a close-up of counterfeiting in perfumes, cosmetics, and other especially risky products.
Medicine closeup:
The Food and Drug Administration on counterfeit medicine risks in the United States.
… and CDC guidance for buying medicine abroad.
And the World Health Organization’s home-page for counterfeit medicine.
And beyond the borders:
Wealthy countries with sophisticated and efficient customs enforcement record most seizures of counterfeit goods; in lower-income regions, seizures are less systematic and counterfeits are much more likely to reach consumers. As an example, the UN’s Office of Crime and Drug Control reports that substandard or counterfeit medicine rates are above 40% in eight countries — Venezuela, Suriname, Mali, Ghana, Malawi, Nepal, Bhutan, and Vietnam — and between 20% and 39% in 15 more. They published estimates this spring that these counterfeits contribute to as many as 267,000 annual deaths from malaria, and 169,000 deaths from childhood pneumonia. UNODC’s examination of counterfeit medicine in Africa, with a closeup on especially vulnerable low-income Sahelian states.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
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