Counterfeit goods cost 800,000 jobs each year in Europe

The European Economic and Social Committee (CESE), a consultative body of the EU, has warned that the production and distribution of counterfeit goods cost Europe some 800,000 jobs each year.

Besides, counterfeiting deprives the EU of approximately €14.3 billion a year in tax revenues, notably VAT and excise duties. CESE advocates the creation of a new regulatory framework, to strengthen legislation and Europe-wide initiatives in the field of anti-counterfeiting.

The estimated worth of counterfeit goods worldwide ranges from €600 billion, according to the UN, to nearly €1 trillion, according to other international statistics. For the EU alone, the Organisation for Economic Co-operation and Development (OECD) reckons that up to 5% of all the goods it imports - equivalent to €85 billion a year- are either counterfeit or pirated.

The problem is of capital importance, emphasised CESE, since 39% of Europe's GDP and 26% of its jobs concern industrial sectors based to a high degree on the exploitation of intellectual property rights. Hence the urgency of supporting the SMEs and industries affected by the phenomenon, 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,” wrote Antonello Pezzini in the CESE report.

In July, CESE published a report on the counterfeit and pirated goods industry, warning of the fragmentary and varied nature of the implementation of relevant EU regulations at the national level, and of the varying levels of effectiveness in the customs checks carried out.

"This situation is not only highly damaging for the competitiveness of companies but, in many cases, it also constitutes a threat to consumer health and to public safety and security," stated the report.

Branded businesses are the first to be affected, wrote CESE, but the European Commission and EU member states must shoulder their share of the burden and urgently update the regulatory framework relating to intellectual property rights, as well as harmonise penal sanctions across member states.

The CESE report also advocates a Europe-wide action plan with appropriate funding and effective coordination. It notably calls for the use of innovative technology in the areas of traceability and follow-up, for a more intense information effort and for bilateral agreements for fighting counterfeiting across the whole supply chain.

Any new free-trade agreement will have to include anti-counterfeiting measures, and specific regulations must be drawn up to keep track of drugs, food and other sensitive products sold on the internet, as a joint effort between the European Drugs Agency, Europol, the European Food Safety Agency and the European agency for network and information security.