Counterfeit Goods

Information and statistics about counterfeiting and the sale of counterfeit goods. Estimated losses from counterfeits, markets where fake goods are sold, and other piracy statistics are collected from criminal justice programs and public information sources.

Police and other counterfeit goods investigators report that up to 90 percent of all counterfeit goods sold within the United Kingdom is distributed from the cities of Manchester and Salford.

Source: “Manchester and Salford top UK’s fake goods trade list,” BBC News, December 18, 2011.

Producers of unauthorized cigars in Cuba purchase materials illegally in order to manufacture unlicensed Cuban Cigars.

Black market cigars are purchased for $8 for 25 cigars, with the boxes to hold the cigars sold for $5. Rings to insert onto the cigar are sold for the black market price of $30.

Most of the unlicensed cigars are sold to tourists on the island.

There were 81.5 million legitimate Cuban cigars made in 2010.

Source: Jack Kimball, “Cuba’s cigars: a black market tale of survival,” Reuters, December 15, 2011.

According to the United States Ambassador to China, sales of legitimate software is higher in Vietnam than in China, despite China having over 15 times the population of China. Software piracy is believed to be the cause for the low level of sales in China, with an estimated 78 percent of all software installed on PCs in the country being pirated copies.

Source: Owen Fletcher,”Chinese Government Can’t Kick the Pirated Software Habit,” Wall Street Journal, China Real Time Report, December 13, 2011.

47 percent of the 17,000 homicides that were recorded in Colombia in 2010 was connected to illegal drug activities.

Source: AFP, “Drug war failed across Latin America in 2011,” Google News, December 10, 2011.

An estimated 10 percent of all cigarettes smoked in Europe are either counterfeit cigarettes or have been smuggled to avoid taxes.

Source: Daniel A. Witt, ” How big is the illicit tobacco trade in Europe?,” Public Service Europe, December 9, 2011.

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Over the course of a one week joint operation conducted by Interpol-Europol, authorities seized the following substandard and counterfeit food items:

  • Over 13,000 bottles of substandard olive oil
  • Around 77,000 kilograms of counterfeit cheese
  • 5 tons of substandard fish and seafood
  • Over 12,000 bottles of substandard wine
  • 30 tons of counterfeit tomato sauce
  • Nearly 30,000 counterfeit candy bars

The ten countries that participated in the counterfeit food operation and where the seizures took place were Bulgaria, Denmark, France, Hungary, Italy, the Netherlands, Romania, Spain, Turkey and the United Kingdom.

Source: “Tonnes of Illicit Foods Seized across Europe, Bulgaria Too,” Sofia News Agency, December 7, 2011.

The Anti-Counterfeiting Group estimates that counterfeit toys makes up to 12 percent of all toy sales in the United Kingdom.

Source: Mark King, ” Christmas shoppers warned over flood of counterfeit toys,” Guardian, December 7, 2011.

Law enforcement officers in Canada explained how a ring of counterfeit money producers created the fake money and eventually passed it in to circulation. The methods are generally applicable to all types of currency.

First, the counterfeit money manufacturer would make the fake bills and sell it in bulk for 20 to 30 cents on the dollar. So if the manufacturer was selling $1 Million in fake hundred dollar bills, he would sell that batch for between $200,000 to $300,000.

The bulk buyer would then break up the counterfeit bills in to smaller batches and sell those batches to runners at 40 cents to the dollars. That person would then sell the fake bills to the shopper, who purchases the counterfeit currency at 50 cents to the dollar.

The last person who purchased the bills would then use it at retail stores.The would attempt to pass the fake money while buying a small item, such as a cup of coffee. By using a large denomination, the shopper would be able to pocket the genuine money that is given as change as his profit.

(How to make counterfeit US dollars.)

Source: Grant Robertson, “Funny money: How counterfeiting led to a major overhaul of Canada’s money,” Globe and Mail, December 3, 2011.

Counterfeit money is tracked and reported by parts per million (PPM), which reports how many counterfeit banknotes have been passed into circulation out of 1 million. G-20 countries use a benchmark of 50 as an acceptable level of counterfeiting.

In 1990 Canada has a PPM of 4, which means out of 1 million genuine currency bills, 4 counterfeit bills were being passed into circulation.

In 1997, the rate in Canada increased to 117. By 2004, the rate was 470 PPM.

In 2002, up to 10 percent of retailers across the country were no longer accepting the Canadian $100 bill in order to protect themselves from counterfeits.

After enacting changes to its currency, Canadian officials reported that 2008 the PPM of counterfeit money was 76, and down under 40 PPM in 2011.

(Additional statistics about counterfeit money passing into the economy.)

Source: Grant Robertson, “Funny money: How counterfeiting led to a major overhaul of Canada’s money,” Globe and Mail, December 3, 2011.

Counterfeit currency rates are determined by part per million (PPM), which reports how many counterfeit money notes are found in circulation.

The United States has as PPM of 6.5 PPM, meaning that authorities discover 6.5 counterfeit banknotes that have been passed as real currency out of every 1 million banknotes.

Australia has a rate of 6.8 PPM, and Mexico has a rate of 83 PPM.

G-20 nations use a PPM benchmark of 50 as to whether or not the country’s currency system can be considered secure.

Source: Grant Robertson, “Funny money: How counterfeiting led to a major overhaul of Canada’s money,” Globe and Mail, December 3, 2011.