Countries that set up a free trade zone are at risk of an increase of 5.9% in the trade in counterfeit products. That’s according to a new report released by the European Union Intellectual Property Office (EUIPO) and the Organisation for Economic Co-operation and Development (OECD).
There are over 3500 free trade zones in the world. These zones offer benefits based on their physical location, specialised infrastructure and liberal regulatory regimes, and bring real advantages for businesses and host countries. However, due to light regulation and reduced custom controls, free trade zones are also attractive locations for parties engaged in illegal and criminal activities.
Using data from free trade zones across the globe, as well as data on customs seizures at international level, the report shows that the larger the role of free trade zones in a country’s economy (whether measured by the number of such zones or the number of people employed in them), the greater the value of fake products that the country exports.
In the European Union, these counterfeit products amount up to 5% of all EU imports, worth up to EUR 85 billion, according to a previous EUIPO-OECD study released in April 2016.
The full study in English and the Executive Summaries in the 23 language versions can be found here.