July 22, 2010 / 5:40 PM / in 7 years

Pirate traders exploit Internet sales model : EU

BRUSSELS (Reuters) - Internet sales of counterfeit and pirated goods to European consumers are frustrating attempts to stem illegal trade, a European Commission report said on Thursday.

Three quarters of illegal shipments stopped by EU customs officials in 2009 were shipped by post or air, suggesting that Internet sales of illegal items have increased, according to an annual report on illegal trade flows by the European executive Commission’s department for Taxation and Customs Union.

The figures highlight that counterfeiters are concentrating increasingly on sales to individuals rather than dispatching bulk shipments to intermediaries that are expensive to send and could more easily be tracked.

“This development is very convenient for the counterfeiter who no longer has to factor in delivery cost to his business model,” John Taylor, head enforcement officer on intellectual property rights (IPR) in the EU’s tax office, told journalists.

Among the counterfeit and pirated goods are more general household items rather than traditional luxury items such as watches and bags. Customs officials noticed an increase in illegal wigs, makeup, shoes and hair-straightening products shipped by post, particularly to Ireland and the United Kingdom.

Newcomers to the illegal trade include Egypt, from where EU customs officials caught the majority of intercepted toys, and the United Arab Emirates, the source of nearly 75 percent of illegal medical products. Most food and alcohol that entered the EU illegally came from Turkey.

CHINA TOPS LIST

China continued to top the list of countries that conduct most illegal trade with Europe, accounting for nearly 65 percent of items stopped. The EU signed an agreement with China last year to fight illegal trade, but it is too soon to measure its success, Taylor said.

“The Commission and the member states are convinced that the most effective results can be obtained through cooperation with the Chinese authorities,” he said.

EU Tax Commissioner Algirdas Semeta plans to discuss IPR cooperation with his Chinese counterparts during a visit to Shanghai in September.

Reflecting the downturn in global trade, the volume of illegal goods EU officials intercepted entering the bloc from abroad in 2009 fell 12 percent compared to the previous year.

Counterfeit and smuggled tobacco products made up 35 percent of goods detained. The European Commission teamed up with cigarette producer British American Tobacco on July 15 to fight the trade in illegal cigarettes.

The European Council endorsed a customs action plan in March, but talks on a new anti-counterfeiting accord have stalled over disagreement on the protection of European fashion brands and food names. The European Commission plans to propose legislation on IPR by the end of the year.

Reporting by Andrea Swalec; editing by Juliane von Reppert-Bismarck

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