Counterfeiting cost Swiss economy $7bn in 2018

The global trade in fake goods that infringed Swiss intellectual property rights in 2018 was worth around $7bn, or 2.3 per cent of all genuine exports, according to a new report.

The Counterfeiting, Piracy and the Swiss Economy document – published by the Organisation for Economic Co-operation and Development (OECD) – found that Swiss watches were the most targeted category, accounting for around $2bn of the infringing trade.

Other commonly faked Swiss products included clothing, leather products and footwear, according to the report, which suggests that in more than half (54 per cent) of cases the counterfeits were sold to consumers who knew they were buying knock-offs.

The data – derived mainly from customs seizures – also suggests that Swiss manufacturers lost sales of $4.5bn due to counterfeiting and piracy, which the OECD estimates as lost sales from purchasers trying to buy genuine goods, rather than those knowingly buying fakes.

The loss in revenue is equivalent to 10,000 lost jobs and, in addition, the Swiss government lost almost $160m in lost tax revenues.

The figures make Switzerland one of the economies that is worst affected by illicit trade, says the report.

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"The Swiss economy is innovative and knowledge-intensive." Says the OECD. "Consequently, it relies heavily on intellectual property rights. Swiss industries are also export-oriented and solidly integrated in the global economy. At the same time, the threats of counterfeiting and piracy are growing, and Swiss industries are vulnerable."

China and Hong Kong continued to be the primary source of counterfeits, accounting for around 52 per cent and 25 per cent of seizures, respectively, with Turkey and Singapore also important countries of origin.

One key finding in the report is that Hong Kong has surpassed mainland China as the primary source of counterfeits, showing it is an increasingly important transit hub for the illicit trade, along with the Pacific island Tuvalu.

Another worrying trend was the ever-escalating numbers of counterfeits packaging and logos, which reveals that criminals are shipping unbranded goods separately from packaging and labels to reduce the risk of seizure.

Watches accounted for 80 per cent of seizures in terms of number and value, followed by clothing (11.4 per cent) and footwear (3.2 per cent). The most frequent destination countries for the fakes were Germany, Belgium, the Netherlands, the UK and Spain.