Globalisation, trade facilitation, and the specialisation of industries across countries have reshaped the way products are designed, manufactured, and delivered. As a result, supply chains have grown increasingly long and complex. Where production may have been confined to a single country or region in the past, today’s supply chains extend across borders, involving numerous countries and continents. This evolution has promoted greater efficiency and access to global resources, but has also introduced new layers of complexity in managing and securing these extensive networks.
With this global expansion, the intellectual property (IP) content embedded within products has grown significantly, underscoring the importance of IP protection on an international scale. The increase in IP-intensive goods reflects advances in technology and innovation across multiple sectors. As production processes span multiple countries, managing the IP that fuels the innovation has become more challenging, requiring safeguards and mechanisms to protect brands, products, and technologies across jurisdictions. This global scope of production is both a product of and a contributor to the rising value of IP, placing new demands on international collaboration and enforcement to secure these assets.
Globalised supply chains have brought numerous benefits by, for example, enhancing the welfare of nations, boosting consumer satisfaction, and driving economic growth. By allowing products and services to be sourced and sold worldwide, businesses have been able to expand their markets while consumers have been able to gain access to a broader array of goods, often at lower prices. This dynamic has created significant opportunities for economic development, innovation, and social progress. With more choices available, consumers enjoy better quality, lower prices, and more variety, all of which are hallmarks of a thriving global economy.
However, the extended and complex nature of global supply chains introduces new vulnerabilities, particularly regarding intellectual property infringement. Supply chains that stretch across numerous countries are more challenging to monitor and protect, creating opportunities for counterfeiters to infiltrate these networks with fake goods. This exposure weakens the resilience of the supply chains, putting companies and consumers at risk and amplifying the need for stringent IP enforcement along entire supply chains.
The proliferation of counterfeit goods has emerged as a significant threat to global economic health, innovation, and public safety. Illicit trade in counterfeit goods undermines legitimate businesses, deprives governments of revenue, and poses risks to consumer health and safety. Moreover, such trade fuels corruption and crime, with the illicit proceeds often funding organised criminal networks. The risks are amplified by the intricate web of supply chains that span the globe, providing counterfeiters with greater opportunities to exploit gaps in regulations and enforcement across borders.
Organisations like the OECD and EUIPO have been studying these risks in-depth for many years. Their findings are sobering: counterfeit goods are increasingly infiltrating global supply chains, taking advantage of liberalised trade and developments in transportation logistics. The two organisations have identified vulnerabilities where “bad actors” misuse trade facilitation tools, such as online marketplaces (OECD/EUIPO, 2021[1]) and fast parcel delivery systems (OECD/EUIPO, 2018[2]), to distribute counterfeit products. Their studies underline the importance of securing global supply chains to protect innovation, economies, and public well-being.
Online marketplaces, free trade zones, and expedited shipping are some of the mechanisms that facilitate global trade. These mechanisms facilitate transactions and rapid movement of goods, thus meeting the demands of today’s fast-paced, consumer-driven markets. However, counterfeiters exploit these same mechanisms to circulate illicit goods, making it imperative for policymakers and industry leaders to consider safeguards and tighter regulations to curb their abuse without compromising trade facilitation.
Recent crises, such as the COVID-19 pandemic and the ongoing war in Ukraine, have only added to the complexities of global supply chains. These events have shifted enforcement priorities and placed additional strain on risk profiling. The disruptions have underscored the vulnerabilities of international trade networks, prompting governments to rethink their approaches to supply chain security, risk management, and IP enforcement. Policymakers need to adapt to an evolving landscape, balancing the need for secure supply chains with the goal of promoting economic resilience.
This report marks the fourth instalment of an ongoing OECD and EUIPO collaboration to assess the scale and scope of illicit trade in counterfeit goods. It provides policymakers with a data-driven analysis grounded in a robust econometric framework. The purpose is to help inform decision-makers and enhance strategies for combating counterfeit trade. The study examines trends and risks associated with counterfeit goods in international markets, delivering insights into enforcement challenges and providing a foundation for effective policy responses.
The report’s findings illustrate the threats posed by counterfeit trade and identify governance gaps that may allow such illicit activities to persist. These insights are critical for policymakers aiming to strengthen supply chain integrity and address vulnerabilities. By highlighting specific areas where governance improvements are needed, the report offers suggestions for designing effective policies that address these risks and protect the global economy from the adverse impacts of counterfeit trade.
