Counterfeiting is big business across the globe. In fact, according to the Organization for Economic Cooperation and Development, the value of counterfeit goods that crossed international borders in 2007 was more than $250 billion. And that’s not just innocuous items like currency, clothes or electronics. Counterfeiters are faking items that can have serious health and safety consequences, from medication, to pesticides, to airplane parts. For example, the FAA estimating some 520,000 counterfeit parts end up on planes each year. Counterfeiters are even targeting the U.S. defense industry, forging everything from body armor to routers, and costing semiconductor companies more than $7.5 billion annually, all while endangering the lives of soldiers and civilians.
We wanted to take a closer look at the counterfeiting shadow economy and the technologies implemented to try and thwart counterfeiters. So we dug in, compiled data and research, and put together this infographic called “Cash Me if You Can.” If you like it, please share it with others on social media. You also can add the infographic on your website using the HTML code below. We ask that you credit us, Camcode the leader in asset ID tags, as the source. Learn more about anti-counterfeiting measures in the aerospace and defense industry.
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Full Infographic Text Transcription:
CASH ME IF YOU CAN
Call Outs:
- By 2015, ICC expects the value of counterfeit goods globally to exceed $1.7 trillion. That’s over 2% of the world’s total current economic output.
- Estimate that counterfeit goods now worth more than 5 per cent of world trade.
1. Types of counterfeits
- CopyCash
○ Counterfeit money the U.S. government has removed from circulation: $103 million (2008) to $261 million (2011)
○ Investigators estimated that only 10 percent of dollar counterfeiters are arrested in the country.
■ 2% of all cash currently in circulation is counterfeit
■ Most U.S.-made counterfeit cash by crystal meth and marijuana dealers
○ Increased cash seized by U.S. government
■ $261 million in fake money from circulation,
■ The United States Secret Service seized $182 Million of counterfeit dollars in 2009, an increase from the $79 Million that was seized in 2008.
○ Counterfeiting made easy:
■ 63 percent of the counterfeit money produced using digital printing today (1/13/12), compared with less than 1 percent in 1995
- Identity Crisis
○ Made in China
■ in 2011, US Customs and Border Protection at O’Hare airport in Chicago seized over 1,700 counterfeit driver’s licenses in just six months.
○ A study in 2009 of American university students found that 17% of freshmen and 32% of seniors owned a false ID.
○ average price of a fake ID is $100 (but can go up to $7,000)
- Its a bird, its a plane, its counterfeit aerospace and defense technology
○ counterfeit parts have been found in helicopters, surveillance and cargo planes
■ 1800 cases
■ 1 million counterfeit parts
- 70% from Chinese companies
■ The FAA has estimated that some 520,000 counterfeit parts make their way into planes each year.
○ Aerospace and defense products are generally designed for a long life cycle.
■ Example: B52’s from 1955 have expected lifespan to 2040
■ Replacement parts are limited and manufacturers change
○ increased counterfeit electronics parts for aerospace and defense
■ from 3,369 incidents in 2005 to more than 8,644 incidents in 2008.
○ Effects of Counterfeit Replacement parts
■ industry effects; counterfeiting costs U.S. semiconductor companies over $7.5 billion yearly, and has resulted in the loss of 11,000 jobs
■ Seatbelt clasps
- Seatbelt parts were made from a grade of aluminum that was inferior to specified DOD requirements. The parts were found to be deficient when the seatbelts were accidentally dropped, and they broke.
■ Routers
- The Navy, as well as other DoD and government agencies, purchased counterfeit network components — including routers — that had high failure rates and the potential to shut down entire networks.
■ Body armor
- The Defense Logistics Agency (DLA) procured non-Kevlar material that was misrepresented as Kevlar. The DLA discovered the discrepancy during testing.
- Bad Goods: Top 10 Counterfeit Goods
- Apparel and accessories accounted for over 50 percent of the counterfeit goods seized by U.S Customs and Border Control.
10 Electronics
a0 Value of counterfeits seized: $39 million
b0 Retail value: $101.2 million
c0 Percentage of total seizures: 22%
d0 Most counterfeited: smart phones, tablet computers and DVD or music players.
20 Shoes
a0 Value of counterfeits seized: $25.3 million
b0 Retail value: $97 million
c0 Percentage of total seizures: 14%
30 Drugs
a0 Value of counterfeits seized: $16.9 million
b0 Retail value: $25.2 million
c0 Percentage of total seizures: 9%
d0 Most- Counterfeited: Viagra
40 CDs and DVDs (move over internet piracy)
a0 Value of counterfeits seized: $15.6 million
b0 Retail value: $35 million
c0 Percentage of total seizures: 9%
50 Clothes
a0 Value of counterfeits seized: $14.8 million
b0 Retail value: $126.3 million
c0 Percentage of total seizures: 8%
60 Perfume
a0 Value of counterfeits seized: $9.5 million
b0 Retail value: $51 million
c0 Percentage of total seizures: 5%
70 Watches
a0 Value of counterfeits seized: $8.4 million
b0 Retail value: $112.7 million
c0 Percentage of total seizures: 5%
80 Cigarettes (due to tobacco taxes)
a0 Value of counterfeits seized: $8.2 million
b0 Retail value: $10.9 million
c0 Percentage of total seizures: 5%
90 Computer Hardware
a0 Value of counterfeits seized: $7.8 million
b0 Retail value: $22.6 million
c0 Percentage of total seizures: 4%
100Toys and Games
a0 Value of counterfeits seized: $7.6 million
b0 Retail value: $26.9 million
c0 Percentage of total seizures: 4%
2. Which countries produce the most/where piracy is most prevalent
- Peru produce the most counterfeit US dollars in the world.
○ Between 09-10, over $30 Million fake dollars were seized by police in Peru
- In terms of copyright materials being pirated
○ business software $5.69 billion lost(almost half of lost revenue)
○ records and music $2.44 billion lost
○ pirated entertainment software $1.74 billion lost
○ motion pictures $1.64 billion lost
- 2012 Top suppliers of counterfeit goods in the U.S. include:
(1) China, (source of 80% of counterfeit goods seized at U.S. borders) Chinese authorities confiscated 38.36 Million counterfeit goods and pirated materials across the country in 2011.
(2) Russia,
(3) India,
(4) Pakistan
(5) Uruguay
(6) Korea and
(7) Philiippines
- Top consumers of counterfeit goods include:
(1) China
(2) Russia
(3) Latin America (esp. Brazil)
(4) Greece
(5) Italy
3. ANTI COUNTERFEITING TECHNOLOGIES
- Optical Technology
○ Holograms (as seen on driver’s licenses)
- Smart cards
○ 24% increase in sales in SmartCards from ‘11 to ‘12
- Biotechnology
○ Use of monoclonal antibodies to recognize certain antigens or marker chemicals.
○ The marker chemicals are added in tiny concentrations to products (such as pharmaceuticals or liquor) and are detected by using a test kit containing the specific antibodies
- Chemical technologies: Inks
○ light-reactive and heat-reactive inks
○ Invisible inks – Inks invisible to the naked eye can be read by bar-code scanners (used in fragrance and pharmaceutical industries)
- Microscopic tags – constructed from up to ten different colored layers.
○ The sequence of colors denotes the unique code of the tag and the total number of possible codes ranges up to 4.5 billion.
○ The tags can be applied to both product and packaging in a number of ways, including incorporation in clear varnish.
4. Economic and social impact of counterfeiting
○ Financial effects for industries:
| Organization for Economic Cooperation and
Development Category
|
Estimated loss in Billions of Dollars
(2008)
|
Projected loss in Billions of Dollars
(2015)
|
| Internationally traded counterfeit and pirated products
|
$285–$360 | $770–$960 |
| Domestically produced and consumed counterfeit and pirated products
|
$140–$215 | $370–$570 |
| Digitally pirated products | $30–$75
|
$80–$240
|
| Subtotal
|
$455–$650 | $1,220–$1,770
|
| Broader economy-wide effects (tax revenue, costs of crime, FDI flows) | $125 | $125+
|
| Employment losses (G20 Economies) | 2.5 million | 2.5 million+
|
○ Other downsides to counterfeiting:
■ Public at large because it discourages inventiveness;
■ Cost of enforcement;
■ Job losses;
○ the consumer (inferior quality + health/safety concerns + higher prices)
■ Almost a third of medicines sold in developing countries may be counterfeit, according to the Centers for Disease Control and Prevention
■ In comparison, fewer than 1 percent of drugs sold in industrialized countries such as the U.S., Australia, Japan, Canada, New Zealand and the European Union are fake.
■ Fake tuberculosis and malaria drugs alone are estimated to kill 700,000 people a year.
■ 21 sub-Saharan African nations discovered that 55 percent of anti-malarial drugs failed chemical testing due to insufficient (or complete lack) of the active ingredients
■ 7 southeast Asian nations, the survey says 35 percent failed chemical testing, nearly half were incorrectly packaged, and another 36 percent had no active ingredients at all
■ Law enforcement in Zambia seized fake shampoo containing acid.
■ Body-builders and others buying steroids on the black market in Australia were sold repackaged livestock steroids as human steroids.
■ Diseased pig meat was used in counterfeit cans of pork luncheon meat in China.
■ In India, counterfeits of drugs were used to fight antibodies in Rh-D negative mothers.
○ Governments lose out on unpaid taxes and incur large costs in enforcing rights
○ Increasing concern that counterfeiting is related to other criminal activity
■ 18 of the Sept. 11th hijackers had over 30 counterfeited, valid licenses and state issued IDs.
■ two men allegedly behind a bus attack in Bulgaria had counterfeit Michigan driver’s licenses. The bombing killed five Israeli tourists and a Bulgarian guide.