A well-organised criminal enterprise

Piotr Stryszowski is Senior economist, Public Governance Directorate at OECD. He was also one of the key speakers at the IP Conference in Stockholm in the beginning of December 2017. We met up for a quick chat about counterfeit, consumer behaviour and the impact of Brexit.

Tell me about piracy. Has it changed in nature the past 4-5 years?

- Yes, it has. First, it's growing. Second, counterfeiters are starting to exploit every possible niche and the structure of this risk keeps changing. It's not only about luxury products anymore. Now there are niche products, for example insulin pens.

"Counterfeit is nowadays a well-organized business."

- Seven years ago, counterfeiting was a bit unstructured and the goods came from many different countries. The routes were more straight forward and the distance between producer and consumer shorter. Today, the Far East Asian countries dominate.

How is it run?

- Counterfeit is nowadays a well-organized business. It uses old and modern logistics, ranging from container ships and ownerships of harbours to express & postal services. It's fantastically organized, very dynamic and responds to market needs.

- It's like a hit and run-strategy. The counterfeiters closely monitor the market and identify the potential of infiltration. Companies, on the other hand, look for efficiencies and savings. Outsourcing becomes standard and opens possibilities for infiltration and counterfeiting. Counterfeiters identify gaps everywhere, using all potential methods.

What about SME:s and counterfeit?

- Right now, we are working on a case study on Italy, where there are many SME:s and they are particularly targeted to counterfeiters. These SME:s have no capacity even to monitor the problem. They are sometimes not even aware that the counterfeit products exist around the world.

And as consumers, are we being too naïve?

- I think that there's an educational gap. Internet is everywhere and consumer awareness is key. Consumers are aware that counterfeiting exists, but online stores still enjoy a relatively high degree of trust. When we go online, it seems like we are changing hats and tend to act a bit naïve.

"Internet is everywhere and consumer awareness is key."

Do you think Brexit will have any influence on piracy?

- What will be impacted by Brexit is the very smart way counterfeiters get in to the European Union. Nowadays, they don't choose the final country of destination but instead a third country.

- The UK is now most likely one of the entry ports for goods going to the south; Italy and France. Italian harbours are one of the gates for goods going into Germany. This intra-European network is exploited to the last drop by counterfeiters. Brexit will definitely impact it. But how, that depends on the results of the negotiations.

What role can authorities like PRV play?

- I am glad that the patent office in Sweden is taking a lead in gathering people into doing something together about piracy and counterfeit. Unfortunately, in many countries counterfeiting as an issue is never number one.

If not counterfeit, what are customs focusing on?

- One of the main priorities for customs in many countries is revenue collection. Concerning other issues, the priorities usually are related to health and safety; drugs, guns, radioactive components and human trafficking. On top of that, in many countries customs are dramatically under-invested.

Can you exemplify?

- Take for example the Eastern European EU-members, like Poland, my home country. The smugglers know that the customs only fight with stamps and pens, not machine guns, and they choose goods that do not expose them to high risks. There is a huge flow of contraband, but it is mostly counterfeits or cigarettes, not narcotics.

What is the OECD doing about these issues?

- My main role is to find the gaps are and show the scale of the problem. One solution might be a trade agenda. But if our governments don't take the problems seriously, it doesn't matter how good of ideas we have.

Edited 2021-05-26