Financing villainy: the relationship between counterfeit goods and organized crime

Under the title “Look behind”, on 14 January the United Nations Office on Drugs and Crime (UNODC) launched a public awareness campaign aimed at highlighting the close global relationship between organized crime and piracy and counterfeiting of goods. The campaign is based on an advertising spot that premiered on the NASDAQ screen in New York's Times Square, subsequently to be broadcast via the most influential media in the more than ten languages into which it has been translated. By investments of this kind, the UN is showing that it is ever more aware of the danger posed by piracy and counterfeiting, as well as the repercussions of these activities on society and its members.

The counterfeiting business moves billions of dollars around the world every year, a fact that is not lost on the international networks of organized crime. Countless criminal organizations have been associated with this type of illicit trafficking, and their relationship with these activities has been duly proven. Italian groups such as the Cosa Nostra or the Neapolitan Camorra, as well as the Russian Mafia, have been linked to counterfeit goods trafficking in operations conducted by INTERPOL in Latin America and by Europol in Europe. In Asia, where the manufacture of very low-quality goods bearing third party distinctive signs is astonishingly simple to carry out in view of the low production costs, groups such as the Japanese Yakuza and the Chinese Triads dominate these production and distribution processes, with capacity to expand operations throughout the world.

Bodies such as INTERPOL have warned that the web of an international criminal organization often lies behind the counterfeit market, and the profits made by this illicit trade serve to finance other crimes such as human trafficking, money laundering and drug trafficking. The low penalties handed out for crimes against industrial property only serve to encourage organized crime groups to participate in what is a multi-million dollar market (the benefits of which might even exceed those of drug trafficking) and for which criminal punishment in the event of conviction is ludicrous compared to the potential profits to be gained. 

By Frank Schwichtenberg Vía Wikimedia Trafficking of counterfeit goods is closely linked to the following crimes:

·   Money laundering. Criminals use counterfeiting to launder money obtained from their various illicit activities. By introducing these goods into regular distribution channels, passing them off as originals through supposedly legitimate businesses, they are able to ensure that any profit has been properly laundered by the time it reaches the bosses of these groups.

·   Labour exploitation. As mentioned in the campaign's spot, the mafias engaged in counterfeiting activities take advantage of the situations in developing countries to produce goods of this type there. Working in conditions that are more than precarious for ridiculously low or non-existent wages over the course of interminably long hours is the daily reality for thousands of people (many underage) who are exploited by these criminal groups in factories.

·   Extortion and bribery. With a view to facilitating the flow of illicit items across different countries, these organisations habitually resort to bribery or corruption of however many individuals may be necessary. Extortion and threats to distributors and retailers alike who do not wish to "cooperate" are another feature of crimes against industrial property.

·   Fiscal crimes (tax fraud). According to figures released by the Organization forEconomic Cooperation and Development (OECD), the value of the counterfeit goods traded globally each year amounts to around 250,000 million dollars, a figure that evades government coffers and reaches criminal organisations in its entirety.

Although industrial property crime still enjoys a certain degree of social tolerance and is considered a "minor" crime, there is no doubt that it also represents a serious risk to consumer health. Buying counterfeit goods is not a simple and innocuous way of saving money without repercussions for the rest of society; rather, it actively contributes to the financing of organized crime, it encourages the continued exploitation of workers slaving away in factories, and it serves to fatten the wallets of the "capos". Unlike other activities by international mafias, trafficking in counterfeit goods has the advantage of exponentially multiplying the number of potential consumers, in that the activities are not directed at a handful of poor wretches, African warlords, or terrorist groups. They are directed at people who are perfectly normal and have no connection whatsoever with any type of criminal activity, taking advantage of their blindness to the damage that purchasing these items causes both to themselves and to all the victims behind the trade. This is why the public needs to be made aware of all that lies on the other side of counterfeit goods and, once again, to look behind.

Authors: Francisco Marín, Juan José Caselles

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