Counterfeiting, Piracy and the Swiss Economy 2025

1. Introduction

International trade is a powerful engine worldwide for economic growth and development. It has enabled countries to specialise in specific sectors, allowed businesses to expand globally, and has provided consumers with a greater diversity of goods at competitive prices. This expansion has been driven by rapid globalisation, technological advancements, and increasingly sophisticated logistical solutions. However, illicit trade has flourished alongside these positive developments as an unintended consequence of the same forces that have enabled legitimate trade. Counterfeit trade has emerged in particular as a serious and growing threat to the integrity of global markets.

Counterfeiting is a harmful manifestation of governance gaps and insufficient enforcement capacity in today’s complex trade environment. As global supply chains have become more agile and more widely distributed, they have become more vulnerable to abuse by criminal networks. These actors systematically exploit regulatory blind spots and enforcement challenges that allow them to traffic in fake goods, thereby undermining the foundations of trust and transparency in modern commerce.

For economies that are small, innovation-driven, and heavily export-oriented—such as Switzerland—the risks associated with counterfeiting are especially acute. These economies depend on a strong intellectual property (IP) regime, with national IP offices designed to foster innovation and protect creators. Yet the protection of IP does not stop at national borders. Once products and technologies leave national jurisdictions, they are frequently targeted by counterfeiters who illegitimately reproduce and market them, reaping illicit profits and weakening the competitiveness of genuine firms.

In light of these challenges, it is critical to monitor and assess the impact of counterfeiting both in scale and in effect. Over the years, the OECD—working in partnership with key institutions such as the EUIPO—has developed a robust, evidence-based methodology to measure the economic harm caused by counterfeiting. This approach goes beyond estimating trade in fake goods; it quantifies the broader consequences, including losses in legitimate jobs, foregone tax revenue, and diverted income streams from rights holders. The present report applies this methodology to Switzerland, offering a detailed assessment of the country-specific exposure to counterfeiting and the economic toll it imposes.

1.1. The vulnerability of the Swiss economy to counterfeiting

The economic structure and competitive strengths of Switzerland makes this country one of the most exposed of OECD Members to the risks associated with counterfeiting. As a high-income economy with a global reputation for innovation and quality, Switzerland is heavily reliant on intellectual property (IP) rights to protect the value of its exports. The country’s specialisation in IP-intensive sectors—ranging from pharmaceuticals and luxury goods to precision engineering—makes the preservation of these rights essential to its long-term economic performance.

According to OECD data, over half of Switzerland’s exports originate from industries that depend critically on the protection of trademarks, patents, and design rights. This proportion is markedly higher than the OECD average, reflecting the central role that intangible assets play in Switzerland’s trade and industrial model. At the same time, Switzerland consistently ranks amongst the top countries worldwide in terms of R&D investment per capita and patents per inhabitant. These indicators underscore not only the country’s innovative capacity, but its structural dependence on strong and effective IP enforcement.

The high value and strong global recognition of Swiss brands make them prime targets for counterfeiters, particularly in jurisdictions where enforcement of IP rights is limited or ineffective. Criminal networks exploit these vulnerabilities to produce and distribute illicit copies of Swiss-branded goods, capitalising on their premium market positioning. These practices distort fair competition, divert revenues from legitimate firms, and undermine consumer trust.

More broadly, the illicit replication and sale of Swiss products threaten to erode the core attributes that underpin the Swiss economic model: quality, precision, reliability, and innovation. Counterfeit versions of Swiss goods—whether in pharmaceuticals, luxury watches, medical devices, or food products—not only damage brand equity, but also carry serious risks for public health and safety. For a small, export-oriented economy, the cumulative impact of such illicit activity can be profound, affecting national income, fiscal revenues, and employment in high-value sectors.

The paradox is clear: the very elements that constitute Switzerland’s comparative advantage—its innovation ecosystem, its strong IP portfolio, and the high regard in which its products are held worldwide—render it particularly vulnerable to counterfeiting. This calls for sustained vigilance, robust enforcement measures, and enhanced international co-operation to mitigate the risks and to ensure that the benefits of legitimate trade are not undermined by criminal actors operating in global markets.

1.2. Data and methodology

The assessment of the scale and economic impact of counterfeiting on the Swiss economy relies on a robust, multi-source analytical framework developed by the OECD. The methodology integrates seizure data, trade statistics, and national economic indicators to provide a comprehensive estimate of both the magnitude of counterfeit trade affecting Swiss rights holders and the resulting economic damages.

At the core of the analysis is a dataset comprising records of global customs seizures of counterfeit goods. These records, submitted by customs authorities worldwide, identify the origin and destination of infringing goods, the type of product, and—crucially—the IP rights holder affected. A specific subset of these data focuses on seizures of goods that infringe IP rights held by Swiss companies or entities. This subset forms the basis for estimating the volume and scope of fake goods that target Swiss IP on international markets.

To contextualise these seizure data within broader trade dynamics, they are matched against detailed international trade statistics. This comparative exercise allows the share of counterfeit goods to be estimated within overall trade flows and enables a quantification of the global market for fake products that infringe Swiss IP rights. These estimates provide insight into both the scale and geographic distribution of the threat, highlighting regions where counterfeit Swiss goods are particularly prevalent.

Beyond measuring the volume of counterfeit trade, the analysis aims to assess the economic consequences for Switzerland. To do so, the methodology incorporates Swiss manufacturing data on employment, value added, industrial output, and tax revenues. By applying econometric techniques and sector-specific elasticity estimates, the model captures direct and indirect losses attributable to counterfeiting. These include reduced revenues for Swiss firms, job losses in affected industries, forgone fiscal receipts, and a broader erosion of economic competitiveness.

These data sources and analytical tools offer a unique and empirically grounded understanding of the damages that counterfeit products inflict on the Swiss economy. They provide policy makers with essential evidence to design targeted enforcement strategies, allocate resources efficiently, and promote international co-operation to combat the illicit trade in counterfeit goods.

1.2.1. Trade data

The trade statistics are based on the United Nations (UN) Comtrade database, which reflects the value of merchandise assigned by customs officials (i.e. the landed customs value). With 171 reporting economies and 247 partner economies, this database covers the majority of world trade and is considered the most comprehensive available. Products are classified based on the six-digit Harmonised System (HS), an international commodity classification system developed and maintained by the World Customs Organization (WCO); the level of detail on products is, therefore, relatively high.

Data used in this study are based on landed customs value. In most instances, this is the same as the transaction value appearing on accompanying invoices. Landed customs value includes the insurance and freight charges incurred when transporting goods from the economy of origin to the economy of importation.

1.2.2. Seizure data

This report relies on customs seizure data from the WCO, the European Commission’s Directorate-General for Taxation and Customs Union (DG TAXUD), and from the United States Department of Homeland Security (DHS). The latter submitted seizure data from US Customs and Border Protection (CBP), the American Customs Agency, and from the US Immigration and Customs Enforcement (ICE). In each year analysed (i.e. 2020 and 2021), the total number of customs seizures of counterfeit and pirated goods worldwide consistently exceeded 130 000. Overall, the unified database on customs seizures of IP-infringing goods includes almost 297 000 observations. A detailed analysis of these data reveals a number of limitations. Some concern discrepancies between the datasets, others product classification levels or outliers in terms of seized goods or provenance economies. These limitations are discussed in detail in OECD/EUIPO (2016[1]; 2019[2]; 2019[2]) reports; the reports propose ways to address each limitation. This report relies on the same methodology presented and discussed in OECD (2016[3]), and employs the same solutions to the seizure-data limitations.

Limitations

This study provides a quantitative assessment of the economic impact of counterfeiting on Switzerland, drawing primarily on enforcement data. It is important to clarify several aspects regarding the scope and the underlying data sources used throughout the analysis. For the purposes of this report, terms such as “counterfeits” and “fakes” are used exclusively within the analytical framework developed here and do not imply broader legal definitions. The study focuses on tangible infringements of intellectual property rights (IPRs), including trademarks, patents, and industrial designs. Intangible infringements—most notably online piracy—are excluded from the scope of this analysis.

Moreover, this report does not include products that, while illicit in nature, fall outside the realm of IPR infringement. This includes substandard, adulterated, or mislabelled goods—such as non-infringing pharmaceuticals or generic automotive parts (e.g. oil filters or headlamps) produced by non-OEM manufacturers—provided that such goods do not violate registered IPRs. As such, this report provides a focused perspective on the economic damages directly attributable to IPR-infringing counterfeit products, while recognising that broader categories of illicit goods may also generate significant societal and economic harms.

The analysis relies extensively on customs seizure data, which serves as a key proxy for measuring the scale and patterns of trade in counterfeit goods. While these data remain one of the few globally comparable sources of information on IPR infringement, they come with notable limitations. Recent OECD analyses highlight that enforcement efforts have been significantly hindered in recent years, a trend that has accelerated in the aftermath of the COVID-19 pandemic.

Two principal challenges contribute to this situation. First, the sharp increase in small parcel shipments—driven by the growth of e-commerce—has rendered the detection of counterfeit goods more complex. Customs authorities often receive incomplete or vague declarations (e.g. “stuff” or “daily necessities”), impeding effective targeting. The shift towards air cargo for parcel delivery has further complicated inspection efforts, as air freight facilities are typically not equipped to thoroughly screen high volumes of small packages. Additionally, the reconfiguration of international trade routes following the pandemic has further disrupted risk-profiling systems and strained enforcement resources.

Second, enforcement agencies face an expanding array of operational priorities. Anti-counterfeiting efforts must now compete with other pressing issues, including narcotics and arms smuggling, terrorist financing (such as the movement of illicit cash or forged identity documents), and tax and fiscal crimes such as trade-based money laundering. Moreover, many consumer protection risks associated with counterfeit goods—particularly fake medicines and cosmetics—are addressed under separate health regulatory frameworks rather than traditional anti-counterfeiting enforcement. These factors collectively contribute to a reduced institutional focus on counterfeiting, potentially resulting in underreporting and underestimation of the actual scale of the problem.

In light of these limitations, the results presented in this report should be interpreted with appropriate caution. Nonetheless, they provide a valuable evidence base for understanding the specific vulnerabilities of the Swiss economy to counterfeiting and for informing targeted policy responses.

1.2.3. Manufacturing data

The manufacturing statistics are based on the Eurostat Structural Business Statistics (SBS) database, which provides detailed, comparable, and harmonised data on the structure, performance, and activity of businesses across the European Union.

The SBS data offer insights into key business variables such as turnover, value added, employment, labour costs, production value, investment, and number of enterprises. This dataset is useful to estimate impacts on the Swiss manufacturing sector.

1.3. Methodology

The present assessment builds on the methodology previously applied in the OECD’s work on illicit trade and the Swiss economy (OECD, 2021[4]). It also draws on the OECD’s in-house analytical framework developed to measure the economic impacts of counterfeiting at the national level. This methodology, which is grounded in evidence-based economic modelling and customs seizure data, was previously described in detail in Annex of (OECD, 2021[4])

The methodological approach adopted in this report is designed to quantify the short-term economic effects of counterfeiting by evaluating the displacement of legitimate sales by counterfeit goods. The core assumption is that counterfeiting leads to a measurable, albeit partial, substitution effect—whereby some consumers purchase counterfeit items in place of genuine products. While this substitution is not perfect nor one-to-one, it results in a reduction in sales volumes for rights holders. This, in turn, translates into lower corporate revenues and profits, reduced employment, and diminished contributions to public finances, including both tax revenues and social security payments.

This methodology captures only a portion of the total economic harm caused by counterfeiting. Specifically, it does not account for longer-term and indirect impacts. These include the disincentive effects on innovation and R&D investment, threats that substandard counterfeits pose to consumer health and safety, and environmental degradation associated with the poor quality and improper disposal of fake goods. Moreover, it does not incorporate the broader societal risks posed by criminal networks that profit from counterfeiting activities, including their corrosive impact on good governance and rule of law.

The present analysis thus provides a conservative estimate of losses incurred due to counterfeit products, focusing on measurable, short-run economic losses. It nevertheless offers a valuable contribution to understanding the structural vulnerability of the Swiss economy to counterfeiting and underscores the need for continued policy attention.