The counterfeit goods trade around the world is worth almost half a trillion dollars a year, according to a new report by the Organisation for Economic Co-operation and Development (OECD) and the European Union’s Intellectual Property Office.
The value of imported fake goods worldwide stood at $461bn (£325bn) in 2013, 2.5 per cent of the total imports in world trade of $17.9 trillion.
The report found that most of the counterfeits originate in middle income or emerging countries, with China the top producer accounting for a whopping 63.2 per cent of customs seizures between 2011 and 2013.
The second-biggest producer of fake goods is Turkey, accounting for 3.3 per cent of customs seizure, followed by Singapore with 1.9 per cent, Thailand at 1.6 per cent, India making up 1.2 per cent, and Morocco with 0.6 per cent, to complete the top five.
As much as five per cent of goods imported into the European Union are fakes, with US, Italian and French brands the hardest hit. Footwear was revealed to be the most copied item.
Just before Christmas last year the UK was hit by a plague of fake so-called hoverboards, that were found to be highly dangerous and at risk of exploding.
Doug Frantz, OECD deputy secretary general, said:
The findings of this new report contradict the image that counterfeiters only hurt big companies and luxury goods manufacturers. They take advantage of our trust in trademarks and brand names to undermine economies and endanger lives.
The US is home to most brands or patents affected by knock-offs, with 20 per cent of items seized infringing on intellectual property rights of American brands.
Italian companies were victims of 15 per cent of infringements, while France and Switzerland made up 12 per cent each. Japan and Germany stood at eight per cent of the total followed by the UK and Luxembourg.
It was found that postal parcels are the top method of shipping bogus goods, accounting for 62 per cent of seizures over 2011-13.
The OECD and the European Union’s Intellectual Property Office put this down to the growing use of online shopping to buy fakes as shoppers abandon the high street.
The traffic goes through complex routes via major trade hubs like Hong Kong and Singapore and free trade zones such as those in the United Arab Emirates.
Other transit points include countries with weak governance and widespread organised crime such as Afghanistan and Syria. The report shows trade routes change greatly from year to year as counterfeit gangs spot new weak points.
Jeremy Newman, managing partner of specialist IP law firm Rouse, said:
The report concludes that in 2013 up to five per cent of imports into the EU were counterfeit or pirated. This percentage is likely to have increased further since then, with the growing importance of e-commerce and the delivery of counterfeits to consumers by parcel post. This is a shockingly high percentage for such an economically and legally advanced region - suggesting that the solution is not to be found in one country or region alone, but in a joined up global approach.