13.10.2017   

EN

Official Journal of the European Union

C 345/25

Rapporteur:

Antonello PEZZINI

Co-rapporteur:

Hannes LEO

1.1.

The European economy is increasingly based on creativity and innovation. Intellectual property rights (IPR) intensive industries in Europe account for 39 % of the EU’s GDP and 26 % of its employment (1). The EESC considers that businesses must enjoy a series of conditions that facilitate innovation, investment and employment.

1.2.

According to estimates from the UN (2) and OECD, counterfeit products represent 5-7 % (UN) or up to 2,5 % (OECD) of world trade. The majority of counterfeit products in Europe are produced outside the EU, but production is also on the rise in Member States. The internet has considerably simplified and massively increased the scope for selling counterfeit products online while the risk of being prosecuted remains very low.

1.3.

The counterfeit industry takes advantage both of differences in the effectiveness of customs controls at key entry points to the single market and of the fragmented and variable nature of the national implementation of EU rules and standards, facilitating the entry into the EU of products that endanger consumers’ health, public safety and security and the competitiveness of businesses.

1.4.

Consequently, a fully-functioning and interoperative Customs Union must ensure the efficient operation of the new system introduced by the customs code, protecting businesses from unfair competition, especially from the global counterfeit and pirated products industry — not only in the interests of business but because it has direct implications for global health, safety and security, as well as economic growth.

1.5.

In the EESC’s view, given that two kinds of counterfeiting must be distinguished — ‘counterfeiting’ as infringement of IPR, i.e. pure unfair competition with no threat to safety and public health, and ‘counterfeiting crime’ as a criminal act, as defined by the Medicrime Convention (3) — stamping out counterfeiting and piracy should be a key EU priority not only with a view to ensuring the healthy growth of free world trade without protectionism, but also in view of the professionalisation of organised crime in the trade in counterfeit and pirated products and the risks posed to consumers. This could involve appropriate criminal proceedings to discourage such ‘counterfeiting crime’ activities.

1.6.

In order to reduce the negative impact of the growing volume of counterfeited and pirated goods on the market, measures must be taken at sectorial, national, European and multilateral level to counter:

1.7.

The EESC is convinced that a joint effort is needed by all public and private actors to identify and implement a joint strategy of coordinated measures aimed at preventing, detecting and combating this phenomenon, supported by an appropriate common technical and legislative framework.

1.8.

The EESC considers however that the initiative is primarily a matter for the EU private sector comprising the industries and service providers who are most concerned — as well as the whole value chain, with the involvement of right holders and SMEs — while the European Commission has to update the regulatory framework for IPRs in order to modernise the existing rules and adapt the criminal law options currently available in the EU and its Member States. Together they should build up a strong joint impetus, from the source through the entire supply chain, identifying interoperative mechanisms for international cooperation and monitoring of suppliers/clients, in order to minimise the risk of counterfeiting in the supply chain.

1.9.

Stronger joint action by the private sector is crucial, in the EESC’s view, to ensuring effective partnerships with the internet site providers, content producers, brand owners, electronic payment operators, advertisers/advertising networks and internet domain registers, and voluntary memorandums of joint action, that are able to generate rapid adjustments to sudden market changes.

1.10.

Robust promotion by the private sector should be flanked by public measures such as:

1.11.

The EESC considers that a European anti-counterfeiting campaign should be financed, including a European Anti-Counterfeiting Day and a special telephone hotline, highlighting:

1.12.

The EESC views closer coordination of the various European Commission services with the European agencies involved in the issue with their counterparts in Member States to be essential. This can be achieved by supplying sufficient resources for cooperation across Europe and efforts to establish a true culture of cooperation. Setting up a central counterfeiting task force for an adequate period of time should help to effectively achieve this objective.

1.13.

The EESC urges the Council and the EP, as a matter of urgency, to prevail upon the European Commission to:

2.1.

To define the subject of the present opinion, reference is made to the counterfeiting concepts set out in Regulation (EU) No 608/2013. ‘Electronic and digital piracy’, trade and the dissemination of IT software or illegal files, in violation of the relevant intellectual property laws, do not fall within the scope of this opinion, since they are closely linked with the Digital Agenda, for which the EESC has set up a dedicated Permanent Study Group.

2.2.

Quantifying the counterfeiting phenomenon is a complex task, since, as in all spheres of illegal activity, the data available are too heavily based on estimates and approximations, given that counterfeiting channels are for the most part controlled by criminal organisations, which have shrewdly identified the huge potential of this type of illegal activity, with minimal risks of being caught.

2.3.

In recent years, the types of goods targeted by counterfeiting have multiplied to the extent that no products now exist which cannot be imitated and sold: everything is copied, from clothing accessories, to mechanical spare parts and tools, building materials and equipment, jewellery, footwear, design objects, toys, cosmetics, and medicines, and fake goods would now appear to constitute a parallel sector in their own right, a real competitor which businesses must pit themselves up against and from which they must defend their market share.

2.4.

Ease of purchase often means that consumers choose counterfeit products, with serious repercussions on businesses, particularly SMEs; poorly regulated and difficult to control, e-commerce and online auctions represent an effective and secure way of establishing a wide customer base and trading in low-cost counterfeit goods.

2.5.

Counterfeiting has become one of the main facilitators and financers of organised crime. The involvement of criminal organisations has resulted in a drastic increase in the level of professionalism in the counterfeiting industry: organised criminals have developed the networks necessary to enable them to optimise their results on a global scale.

2.6.

The production of counterfeit goods is generally considered an external phenomenon: customs statistics clearly show that the majority of countries from which counterfeit products originate are not members of the EU. China, although having made the greatest commitment to stamping out counterfeiting, remains one of the industry’s key players.

2.7.

The rise of the internet has created new distribution channels for counterfeit products involving a low risk for the seller due to the difficulties in prosecuting intermediaries in the value chain. Greater cooperation is needed along the whole value chain to effectively tackle trade in counterfeit goods online.

2.8.

IPR-intensive industries in Europe account for 39 % of the EU’s GDP and 26 % of its employment (5). According to recent studies (6), counterfeit goods represent between 5 and 7 % of world trade, which amounts to roughly EUR 600 billion per year, while the OECD (7) put the value of imported fake goods at 2,5 % of international trade in 2013, equivalent to EUR 338 billion, and estimates that up to 5 %, or EUR 85 billion of goods imported into the EU are counterfeit or pirated, excluding those produced and sold within a single Member State, and those bought on the internet and through indirect economic activity.

2.9.

According to other international statistics from 2017 (8) the global trade in counterfeit and pirated goods is estimated to generate between USD 923 billion and USD 1,13 trillion annually.

2.10.

The production of counterfeit goods, including on a large scale, is on the rise in Member States as counterfeiters attempt to circumvent customs controls at the EU’s external borders.

2.11.

The placing on the market of counterfeit and pirated products causes enormous damage to the economy, facilitating the development of an ‘underground economy’, which deprives (9) of the revenue required for essential public services and places a heavier tax burden on taxpayers, with regular job losses.

2.12.

In the EU, counterfeiting is responsible for roughly 800 000 job losses per year and roughly EUR 14,3 billion in annual tax revenue losses, including VAT and excise duties (10).

2.13.

The EP has adopted a series of resolutions on the subject, in particular its Resolution of 9 June 2015 (11), in which it recommended pursuing an approach which brings together all actors in the fight against counterfeiting, raising awareness among consumers and providing them with more information, developing new trade models, improving defence mechanisms for SMEs, promoting a convergence of interests between Member States and third countries and making greater use of data collected by the European Union Intellectual Property Office (EUIPO).

2.14.

On 19 March 2013, the Council adopted a Resolution on the EU Customs Action Plan to combat intellectual property rights infringements (2013 to 2017), setting out clear objectives, earmarking appropriate resources and defining result and performance indicators according to a clearly defined road map on:

2.15.

On 18 May 2017, the Council conclusions on setting the EU’s priorities for the fight against organised and serious international crime 2018-2021 underline that ‘the criminal markets are increasingly complex and dynamic[…]. […] Special attention should therefore be given to the online trade in illicit goods and services, including counterfeit goods[…]’.

3.1.

Customs statistics clearly show that the majority of countries from which counterfeit products originate are not members of the EU, given that key players in the counterfeiting industry include not only China and Hong Kong, but also other Asian countries specialised in specific sectors: India in pharmaceuticals, Egypt in food products and Turkey in perfumes, cosmetics and footwear, along with Malaysia, Belarus, the United Arab Emirates, Indonesia, Thailand and the Philippines.

3.2.

In 2014 EU Customs statistics revealed that more than 66 % of textile and clothing counterfeit products came from outside the EU.

3.3.

Transit points for the transport of goods from Asia to Europe play a particularly important role, since they act as central zones for the transport of goods containers in a network of 3 000 free zones located in 135 different countries. These areas are used as a place to exchange, document and relabel the contents of containers.

3.4.

Another factor to take into account is the considerable rise in the domestic production of counterfeit and pirated goods in the EU, an activity which, according to Europol, is becoming more and more profitable for organised criminals and which carries much lower risks and is linked with other types of crime, such as fraud, document forgery, tax evasion and human trafficking.

3.5.

With the relocation of counterfeit and pirated goods production facilities to within the EU, the resulting lower transport costs and reduced risks of interception, and the development of well-organised criminal networks with adequate resources, a new model appears to be emerging: the expected expansion of the Tanger Med free zone in Morocco, only 15 km away from the EU, could offer criminal networks further opportunities to place larger quantities of counterfeit goods on the European market.

3.6.

The countries whose businesses were most affected by counterfeiting activities between 2011 and 2013 are the US at 20 %, Italy at 15 %, France and Switzerland at 12 %, Japan and Germany at 8 %, the UK and Luxembourg. Indirect losses and additional costs incurred for new design/innovation solutions due to counterfeiting activities should also not be underestimated.

4.1.

The EESC strongly calls on the Member States to introduce measures aimed at:

4.2.

The EESC calls for a new EU framework 2018-2021, including a fully financed and coordinated Action Plan with a view to strengthening anti-counterfeiting legislation and initiatives at EU level, through measures such as:

5.1.

It is essential, in the EESC’s view, to ensure closer coordination of the various Commission services and the European agencies involved in the issue. This can be achieved by setting up a task force reporting directly to the Commission president, able to interact with the relevant private sector segments, international bodies and the competent Member State authorities.

5.2.

This counterfeiting task force should present an all-embracing annual report on progress made in technological, structural and regulatory spheres, especially at international level.

5.3.

The European Commission and the European agencies, especially the EUIPO, Europol and OLAF, as well as NGOs involved in stamping out counterfeiting, need to step up their international coordination, by holding annual international conferences.