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Image: TFL

On the heels of a string of recent busts that saw U.S. Customs agents commandeer $3.4 million worth of counterfeits at Los Angeles International Airport – from Hermes and Louis Vuitton bags to Gucci and Nike wares – all coming from Hong Kong, the National Intellectual Property Rights Coordination Center has revealed that the total value of counterfeit goods seized by law enforcement in all of 2018 rose to more than $1 billion.

According to data gathered jointly between the ICE Homeland Security Investigations-led IPR Center and Customs’ Office of Trade, seizure statistics for the fiscal year 2018 are on the rise. The number of seizures of counterfeit or otherwise infringing goods amounted to $1.4 billion, the value of total confiscated products had they been genuine – up from $1.2 billion the year before.

The “top five product categories” subject to the greatest percentage of confiscations in 2018 included apparel/accessories, footwear, watches/jewelry, handbags/wallets, and consumer electronics, with watches and jewelry accounting for 44 percent of the total $1.4 billion MSRP, and handbags and wallets representing 16 percent of the total.

The report states that the continuing rise in the shipment of infringing goods to the U.S. and the volume of products that are intercepted by Customs is in large part a result of the continued rise in individual e-commerce sales, such as those made by way of brands’ own websites, as well as third-party platforms, such as Amazon. These sales – which included as many as 161 million express shipments, and 475 million packages shipped through the international mail environment in 2018 – pose a particular problem for Customs since small parcels containing counterfeits – shipped either through postal or express services – are often more difficult for law enforcement to detect than the traditional, large-scale methods of transportation, such as via container ship.

This concern echoes the same one set forth in a 2018 report from the Organization for Economic Co-operation and Development and the European Union Intellectual Property Office, which asserted, “One of the areas that has garnered increased attention in recent years has been the use by counterfeiters and other illicit traders of small shipments to cloak their activities.” While “in terms of value,” the two entities note, “counterfeits transported by container ship clearly dominated, in terms of number of seizures, trafficking fakes by small parcels – shipped either through postal or express services – is growing, becoming a significant problem in terms of enforcement.”

Unlike the more traditional cross-border mass shipping, which comes with “information, such as ship manifests and the supporting role of customs brokers,” the sending of counterfeits in small quantities – i.e., ten items or less – by mail or express courier is far more elusive. According to the report, “Only simplified documentation is required to send small volume items shipped by post,” and even that information, which is “provided by the sender, may contain errors, deliberate misrepresentations, or constitute fraud.”