Fake products cost Europe 800,000 jobs each year

The production and distribution of counterfeit goods costs Europe some 800,000 jobs each year, according to the European Economic and Social Committee, a consultative body of the EU.

It notes that the production of counterfeit goods is on the rise, not only due to imports from outside Europe but also production within EU member states, and it warns that action needs to be taken as criminal networks, already experienced in fraud, document forgery, tax evasion or human trafficking, see counterfeiting as a profitable business, with lower risks and the advantage of lower transport costs and circumventing customs controls.

The value of trade in counterfeit products worldwide vary between 600 billion euros (according to the UN) and close to 1 trillion euros (according to other international statistics). For the EU, the Economic Co-operation and Development estimates that up to 5 percent or 85 billion euros of imported goods are counterfeit or pirated, causing the loss of roughly 800,000 jobs and around 14.3 billion euros in annual tax revues, including VAT and excise duties.

The European Economic and Social Committee is calling on the creation of a new regulatory framework, to strengthen legislation and Europe-wide initiatives in the field of anti-counterfeiting.

Given that around 39 percent of Europe's GDP and 26 percent of its jobs concern industrial sectors based to a high degree on the exploitation of intellectual property rights, its important that the EU doesn't ignore the problem and supports SMEs and industries affected, through a strengthening of the existing regulatory framework.

"If we do not act now, we risk having to deal with multilateral issues, such as the inability of fostering R&D, innovation and investment; damages to image and quality; health, safety and environmental risks; the loss of fiscal and para-fiscal revenue and the inability of dealing with organised crime,” said Antonello Pezzini in the European Economic and Social Committee report.

Pezzini added: "It is in the interest of Europe's whole economy and industry to maintain their good reputation and consequently fight all fraud. In order to have a clout on criminal networks, strong alliances between the different businesses supported by a robust legal framework are key.”