Trade in Counterfeit Ict Goods.

94 Pages·2017·2.087 MB·English

by  OECD

Trade in Counterfeit ICT Goods
Recent years have witnessed a constant rise in the spread of ICT (information and
communication technologies) infrastructure and a growing demand for ICT goods.
The production of these goods is knowledge intensive and the industry relies extensively Trade in Counterfeit
on intellectual property (IP) rights. This strong and growing demand for ICT goods, and
their IP dependence, makes them an attractive target for counterfeiters. This study looks at
ICT Goods
the trade in counterfeit ICT goods, including the size of the trade, the main sources of fake
goods, and the countries whose companies are most affected.
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Trade in Counterfeit ICT
Goods
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Please cite this publication as:
OECD (2017), Trade in Counterfeit ICT Goods, OECD Publishing, Paris.
http://dx.doi.org/10.1787/9789264270848-en
ISBN 978-92-64-27082-4 (print)
ISBN 978-92-64-27084-8 (PDF)
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PREFACE –

Preface
Recent years have witnessed a constant rise in the spread of ICT
infrastructure and growing demand for ICT goods worldwide. The
development of ICT products is highly knowledge-intensive and the
industry relies extensively on intellectual property (IP) rights. Strong,
growing demand for ICT goods, coupled with their IP dependence, makes
them an attractive target for counterfeiters. Consequently, trade in fake ICT
goods gives rise to significant challenges to effective governance, efficient
business and the well-being of consumers.
The OECD has prepared this report with the aim of improving decision-
makers’ understanding of the nature and scale of the trade in fake ICT
goods. We are confident that this research will assist policy makers in
formulating evidence-based policies to combat ICT counterfeiting.

Rolf Alter
OECD, Director
Public Governance and Territorial Development Directorate
TRADE IN COUNTERFEIT ICT GOODS © OECD 2017

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FOREWORD –

Foreword
Trade in counterfeit goods is a longstanding socio-economic problem
that continues to grow in scope and magnitude. Counterfeiting gives rise to
significant challenges to effective governance, efficient business and the
wellbeing of consumers, and is becoming a key source of income for
organised criminal groups. It represents a threat to legitimate business and
economic activity and should be addressed as part of government efforts to
counteract illicit trade.
This report looks at the scope and volume of trade in counterfeit
information and communication technology (ICT) goods. It also identifies
and quantifies the categories of these goods affected by counterfeiting, and
charts and analyses the evolution of counterfeit trade routes in terms of
origins, key transit points and destinations. The fake ICT goods were found
to account for up to 6.5% of total ICT trade, well above the 2.5% average of
fake goods’ share in total trade. The range of fake ICT goods is very broad,
ranging from headphones and smartphones to transistors and printed
circuits, and some of them, such as batteries, can pose serious health and
safety threats. The report also finds that while China and Hong Kong
(China) are the main sources of counterfeit ICT goods, companies registered
in the United States and several other OECD countries are hit the hardest by
this trade in counterfeits.
The findings outlined in this report will provide ICT stakeholders,
including governments and experts tasked with counteracting illicit trade,
with a clear view of the technical and operational challenges to be addressed
in the battle against ICT counterfeiting. The report will thus help public and
private-sector decision-makers develop a cohesive response to the challenge
of ICT counterfeiting, and support their efforts to build confidence and
security in the use of ICT.
The report is based on a global database of customs seizures provided by
the World Customs Organization and supplemented with regional data
submitted by the European Commission’s Directorate-General for Taxation
and Customs Union, the US Customs and Border Protection Agency, and
the US Immigration and Customs Enforcement.
TRADE IN COUNTERFEIT ICT GOODS © OECD 2017
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– FOREWORD

In parallel, OECD has been carrying out an overall economic
assessment of the counterfeiting challenge in co-operation with the
European Union Intellectual Property Office, identifying the main
governance “gaps” that create opportunity for counterfeiting. This study has
allowed OECD to build a comprehensive database on seized counterfeit
goods – in partnership with the World Customs Organization, the EU DG
TAXUD, and the US Customs and Border Protection – as part of the work
of the Task Force on Countering Illicit Trade of the OECD High Level Risk
Forum. The study also benefited from OECD expertise on the digitalisation
of the economy as well as the findings of its Digital Economy Outlook.
The report was prepared by Piotr Stryszowski, Senior Economist, and
Florence Mouradian, Economist, with overall guidance from Stéphane
Jacobzone, Deputy Head of Division at the OECD Directorate for Public
Governance and Territorial Development. The authors wish to thank experts
from the OECD member countries for their valuable assistance provided.
The authors would also like to thank Marie-Claude Gohier, Fiona
Hinchcliffe, Jennifer Stein and Andrea Uhrhammer for their editorial and
production support.
The authors express their gratitude for the data and valuable support of
the World Customs Organization, the European Commission’s
Directorate-General for Taxation and Customs Union, the US Customs and
Border Protection Agency and the US Immigration and Customs
Enforcement.
TRADE IN COUNTERFEIT ICT GOODS © OECD 2017
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TABLE OF CONTENTS –

Table of contents
Acronyms and abbreviations ................................................................................... 11
Executive summary ................................................................................................... 13
Chapter 1. The study scope, definitions and rationale ............................................ 15
Defining ICT ........................................................................................................... 16
The threats posed by counterfeiting ........................................................................ 17
References ............................................................................................................... 19
Chapter 2. The importance of the ICT sector and threats posed
by counterfeiting ....................................................................................................... 21
Demand for ICT products is strong ......................................................................... 22
The ICT sector is highly economically significant.................................................. 23
The ICT sector can promote development .............................................................. 27
Intellectual property rights and counterfeiting in the ICT sector ............................ 28
References ............................................................................................................... 31
Chapter 3. Mapping global patterns in counterfeit ICT goods .............................. 33
Data on counterfeit seizures reveal a wealth of information ................................... 36
Counterfeiters adapt their strategies to their target markets .................................... 39
Counterfeit ICT goods are mostly sent by mail, and in small quantities ................. 41
Packaging and labels can also be counterfeit .......................................................... 42
References ............................................................................................................... 44
Chapter 4. Assessing the trade in counterfeit ICT products .................................. 45
Certain economies are significant sources for fake ICT goods ............................... 47
Certain types of ICT products are more likely to be counterfeit ............................. 48
Counterfeit products represent a significant share of world ICT trade ................... 50
Notes ....................................................................................................................... 53
References ............................................................................................................... 54

TRADE IN COUNTERFEIT ICT GOODS © OECD 2017
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– TABLE OF CONTENTS

Chapter 5. Charting the trade routes of fake ICT goods........................................ 55
The counterfeit trade routes are deliberately complex ............................................ 56
Identifying possible producers and transit points is complex ................................. 57
Reference ................................................................................................................ 60
Chapter 6. Trade in counterfeit ICT goods: Conclusion ........................................ 61
Next steps ................................................................................................................ 63
Annex A. Data issues .................................................................................................. 65
Annex B. Methodological notes ................................................................................. 71
Annex C. Tables ......................................................................................................... 83

Tables

3.1. Customs seizures datasets compared ........................................................ 35
3.2.Value and number of global customs seizures of
counterfeit ICT products in the harmonised database, 2011-13 ............... 36
4.1. Top 15 provenance economies in terms of GTRIC-e score ..................... 47
4.2. ICT product categories ranked by their GTRIC-p score .......................... 49
4.3. Top 15 ICT product subcategories in terms of GTRIC-p score ............... 49
4.4. Estimated value and share of counterfeit ICT products
in world trade, 2013 ................................................................................. 51
5.1. Potential producers and transit points of fake ICT goods ........................ 59
C.1. Propensity of economies to export counterfeit ICT products .................. 83
C.2. Propensity of ICT categories to suffer from counterfeiting ..................... 86
C.3. ICT product categories and sub-categories .............................................. 87

Figures

2.1. Global ICT Developments, 2011-16 ........................................................ 22
2.2. Active mobile-broadband subscriptions per 100 inhabitants,
2007-2016 ................................................................................................ 23
2.3. Share of ICT sector in total value added, 2013 ........................................ 24
2.4. Employment in the ICT sector and sub-sectors, 2013 .............................. 25
2.5. The growth in world exports of ICT products, 2001-2013 ...................... 26
2.6. The main exporters of ICT goods, 2013 ................................................... 26
2.7. Changes in world exports of ICT goods for the top ten exporters,
2001-2013 ................................................................................................ 27
2.8. World trademark applications by Nice class in
the manufacturing industry, 2004-2013 ................................................... 29
TRADE IN COUNTERFEIT ICT GOODS © OECD 2017