The levels of counterfeit goods production and distribution have remained stable in the EU for the last four years

Counterfeiting of goods Counterfeiting involves the manufacturing, selling or distributing of goods without the brand owner’s authorisation. Counterfeits are often of inferior quality and infringe intellectual property rights. The levels of counterfeit goods production and distribution have remained stable in the EU for the last four years. The sale of counterfeit goods via online platforms has become even more prevalent and mirrors the increasing role of the internet as the premier retail avenue for legal products and services. Online trade offers counterfeiters direct access to consumers, thereby reducing the number of intermediaries while having a greater reach. The majority of retail activity of counterfeit goods takes place online, on social media, commerce platforms as well as on dedicated websites. It is difficult to assess the demand for counterfeit goods as in many cases consumers are unaware they are purchasing a counterfeit item(47). Counterfeit goods are typically manufactured outside the EU and then imported for distribution in stores, markets or online. Counterfeit items are imported ready for sale or semi-finished. The import of semi-finished products, in which labels and packaging are imported or produced separately, has been increasing as this method lowers the risk of detection at the border. Semi-finished goods are then assembled and sold in the EU. Legal business structures are integral to the trade in counterfeit goods both as retail channels and to facilitate the movement of goods and to launder illegal profits. Document fraud is used widely and may involve falsified origin and travel documents. Counterfeit and substandard plant protection products pose a significant and growing threat to the EU. These products are extremely dangerous for the environment and can heavily contaminate agricultural land and the foodstuff grown on it. Pesticides are among the most highly regulated products due to their potential impact. Pesticides are used to eliminate harmful organisms in plants, while still being safe for the environment and human health. If improperly produced, they can pollute the air, water and soil for a long period of time. The impact on health is not only limited to farmers and the farming community, but also extends to the consumers of cultivated food products. Illicit pesticides can be either counterfeit or substandard. While counterfeit pesticides are illegal copies of branded products, substandard pesticides include all the other uncertified or fraudulent products. Both categories are generally placed on the market without having been officially tested and authorised by the authorities.

Food and drink fraud Food fraud is a collective term used to describe the deliberate and intentional substitution, addition, tampering, or misrepresentation of food, food ingredients or food packaging; or false or misleading statements about a product for economic gain. Criminals counterfeit or manipulate food products or mislead consumers by altering labels, geographical indications or manufacturing processes. The production of illicit food products, especially drinks, is expected to become more sophisticated. Illicit food products are increasingly marketed and sold online and this trend is set to continue to for the foreseeable future. Food products are increasingly mislabelled as organic. Food fraud results in financial losses and reputational damage to legal producers as well as the loss of tax revenues. The trade in fraudulent food products distorts market competition, damaging fair production and distribution. The use of toxic or unsafe ingredients in the unregulated production of food products can have a negative impact on the health of consumers. Some fraudulent food products include dangerous ingredients such as methanol, mercury, fipronil, insecticides or pesticides. The consumption of meat from ill animals can provoke dangerous viral infections.

Pharma crime PPharmaceutical crime involves the manufacture, trade in or distribution of fake, stolen or illicit medicines and other pharmaceutical products, as well as medical devices. The use of counterfeit medicines and medical supplies causes significant direct harm to the health of victims. Pharma crime also harms pharmaceutical companies and reduces the funds available for research and development and product innovation. Clandestine illicit pharmaceutical production sites harm the environment by producing and improperly disposing of chemical waste(48) . The COVID-19 pandemic has prompted a surge in the trade of illicit medical supplies such as counterfeit face masks, gloves, hand sanitiser as well as fake vaccines. Legitimate suppliers were initially unable to meet the sudden increase in demand for personal protective equipment and sanitary products, which resulted in opportunities for criminals. Criminals have exploited the pandemic by offering ineffective goods such as fake corona home test kits or fraudulent prescription medicines used to treat the disease. Soon after the news that the COVID-19 vaccine was ready for authorisation by health authorities, fraudulent offers of the vaccine appeared on the dark web. The distribution of pharmaceutical goods is increasingly shifting from physical to online markets including dedicated platforms such as online pharmacies as well as widely used social media services. Most trading activity is believed to take place on the surface web. However, some pharmaceutical products are also distributed via dark web platforms.

Digital content piracy Online piracy is the practice of illegally copying and selling digital content, such as music, books, computer programs and games. Piracy evolves quickly in lock step with other technological advances. Piracy is now almost exclusively a digital crime as the distribution of physical copies of audio-visual content has almost entirely disappeared. Illegal streaming and internet protocol television (IPTV) are the most common ways to access this type of content. Online offers for these illicit services are widely available for monthly or annual subscriptions and in any language. The use of illegal IPTV services has increased over recent years. The servers hosting these services are typically located in countries other than those where the subscriptions are sold(49). Demand for digital content, both legal and illegal, has surged during the COVID-19 pandemic. The distribution of content on physical media is expected to disappear entirely in the EU, as it is replaced by more easily accessible digital content. Virtual currencies will be widely used to pay for access to pirated content. Legal ways of accessing online entertainment have multiplied and become cheaper for consumers. This is likely to make pirated content less attractive in the future(50).