Home » News & Speeches » OECD study a vital step to understanding the global scope of counterfeiting

The summary of the counterfeiting and piracy study released today by the Organization for Economic Cooperation and Development (OECD) represents the most comprehensive and thorough investigation of the problem ever conducted, and a vital step towards a more complete understanding of the scope and harmful effects of this illegal activity, the International Chamber of Commerce (ICC) said.

“The OECD study confirms what industry has been saying all along – counterfeiting and piracy are not victimless crimes affecting only a few product categories and a few countries,” said Guy Sebban, Secretary General of ICC. “The OECD study shows that the magnitude of counterfeiting and piracy is huge, its impact is pervasive and the problem is growing.”

Counterfeit and pirated products are now for sale in virtually every country and affect every major product sector. The OECD study confirmed that consumers are increasingly put at risk of harm or even death from unsafe and ineffective counterfeit products including medicines, auto parts, electrical components and an array of other goods. These fakes are increasingly exported from one country to another. The hefty profits these phony goods generate have attracted organized crime and spawned the social ills these actors create.

While the OECD study included new findings on the magnitude of one part of the problem, ICC said its members agree that the most important conclusion lies in the OECD’s summary statement that “the magnitude and effects …are of such significance that they compel strong and sustained action from governments, business and consumers. More effective enforcement is critical…”

“We could not agree more with this overall assessment,” said Mr Sebban. “We hope that governments will pay close attention to this conclusion and take the necessary actions to deal strongly with counterfeiting and piracy crimes. This is especially timely as the G8 meets. Intellectual property protection is one of their key agenda items.”

Last month, ICC and the CEOs from some of its member companies around the world issued a set of recommendations to the leaders of G8 countries and urged them to take action against counterfeiting and piracy.https://cms.iccwbo.org/bascap/iccbdgaa/index.html

The OECD study concluded that the international trade in tangible counterfeit and pirated products could be as much as US $200 billion annually, and said that the total magnitude could be several hundred billion dollars more when counterfeit and pirated products sold over the Internet and those produced and sold domestically are included.

ICC estimates that the total value of counterfeit and pirated goods worldwide is more than US $600 billion, when fake products physically crossing borders, those traded over the Internet, and those being produced and sold domestically and fully included. The OECD estimate of the value of those goods moving only in international trade suggests that the ICC estimate is reasonable, if not understated.

“We are delighted that the OECD has come up with a reliable estimate of the amount of counterfeit goods physically crossing international borders, but equally important is the acknowledgment that international trade is only the tip of the iceberg when it comes to understanding the full impact of counterfeiting and piracy,” said Mr Sebban.

Another element of the problem the OECD figure does not include is an estimate of the broader effects of counterfeiting and piracy, such as the impact on economic development, employment, consumer health and safety, technology transfer, tax revenues and public finance, and law enforcement.

“The costs to society and economies around the world are enormous. We agree with the OECD assessment that more work is needed to quantify these costs, as well as the domestic and Internet markets for counterfeit and pirated goods,” Mr Sebban said.  “We stand ready to assist the OECD or other respected international bodies in pursuing further work in this area.”

The OECD study and other efforts to measure the total impact of the problem have been part of broader efforts to better educate policymakers on how investments in IP protection can pay tangible dividends in innovation, economic development, attracting foreign investment and in consumer health and safety.  Industry believes that with such knowledge, policymakers can implement quick, decisive and joint measures that will bring an end to rampant counterfeiting and piracy activity.

The OECD report, “The Economic Impact of Counterfeiting and Piracy,” was released in summary form today. The full report will be issued this summer.

ICC formed Business Action to Stop Counterfeiting and Piracy (BASCAP) in 2004 to unite the global business community to fight counterfeiting and piracy. More than 150 companies worldwide are actively involved in BASCAP activities.

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