Written by Sophy Cox on Monday September 20, 2021
Are you inadvertently contributing to criminality? As we acclimatise to the ‘new normal’, we examine how the global pandemic has helped facilitate unprecedented growth in the UK’s counterfeit market.
According to the latest figures from the Organisation for Economic Co-operation and Development (OECD), the international body which monitors illicit trade, fakes worth some £13.6 billion were imported into the UK in 2020, resulting in lost sales to legitimate business worth £9 billion. 
The government’s message to ‘stay at home’ saw a seismic shift from in-store purchases to online shopping, with many accustomed to shopping on the high street suddenly forced online. This demographic, some of whom were perhaps unaware of the potential pitfalls of purchasing from the internet or did not know the importance of ensuring they purchase from a reputable organisation, represented easy pickings for criminals.
But the pandemic hasn’t been the only contributing factor. The uncertainty regarding Britain’s trade policies following Brexit created an intelligence blind-spot, with policy loopholes helping give rise to further criminality. The financial crime and AML/CFT cooperation and controls prior to Brexit were robust, and it is vital that EU member states and the UK continue to cooperate effectively, to prevent crimes like counterfeiting from proliferating. 
Buying counterfeit goods is often seen as a victimless crime. The consumer is getting a good deal, the seller is making money, and both can go home happy. The classic line ‘you get what you pay for’ blissfully satisfies our conscience that the only people missing out are the big brands, for whom the financial impact, you could argue, is minimal.
The ugly reality beneath this comfortable delusion is an underworld of individuals involved in corruption, exploitation, human trafficking, terrorism and more.  Someone buying a counterfeit sweatshirt might not be aware or exposed to the suffering of those at the end of the chain, but that doesn’t mean they aren’t contributing to it. It is for this reason that it is crucial to follow the money.
But counterfeit goods are not the sole preserve of the fashion industry. Though we live in a world where health and safety is paramount, the terrifying truth is that counterfeit goods have penetrated the pharmaceutical industry. The pandemic saw counterfeiters leveraging widespread feelings of fear and uncertainty to flood markets with counterfeit products and misinformation, inevitably leading to panic buying of vital items. 
You might ask how an industry as heavily regulated as pharmaceuticals could be vulnerable to counterfeiters. The answer is that the confusion unleashed by the pandemic, and the urgency with which medical equipment needed to be sourced, created a perfect storm for counterfeiting networks to exploit. Producing counterfeits is a relatively easy and quick process, and its practitioners are adept at reacting to changes in branding by legitimate vendors. 
Besides businesses, it is individuals – particularly the most vulnerable – who can easily fall victim to buying counterfeit goods. The ease of production, combined with limited face-to-face contact, high demand quickly evolving into desperation and the appeal of an exceptionally lucrative market, is just too good for criminals to pass up. This inevitably leads consumers, in this case the most vulnerable, to be subjected to further, more serious health risks.
To gauge the seriousness of counterfeit goods, consider for a moment the ramifications of a fake vaccine. Suddenly, that designer handbag seems a little less like a bargain.
The main challenge for counterfeiters is infiltrating legitimate supply chains, and the fight against all counterfeit products centres on protecting supply chains that are well-regulated and controlled. 
Similarly, bringing the supply chains a little closer to home, and being savvy enough to take the time to ensure authenticity and credibility, provides more room for systems and controls to be effective within firms. Investment and advances in technology will support this, not just from a tracking perspective, but manufacturing possibilities as well – effectively making things harder to replicate.
Authorities have a big part to play here too, and it’s important that they are taking it seriously (HMRC recently confirmed that it is committed to maintaining high levels of consumer protection against counterfeit goods). 
Do your research. It is understandable that this post-pandemic world has left some without homes, jobs, families, and good health. This means it’s even more important to make every effort not to get caught out and consider the long-term effects to yourself as well as the potential contribution to a more indirect source of wrongdoing.
Perhaps a climate change mentality approach is in order, both for individuals and business. What are the consequences of my actions now, and how will they manifest further down the line?
‘…if no one buys fake goods, then no one will make or profit from them’. 
Good communication and an analytical mindset – both transferable skills – are vital for compliance professionals. However, compliance professionals alone cannot stop the counterfeiting of goods and its link with financial crime. The most effective action will be the collaboration of all supply chain partners, rival firms, consumers and authorities to detect, share information and prosecute. 
The ICA International Diploma in Governance, Risk and Compliance https://www.int-comp.org/qualifications/governance-risk-and-compliance-grc/ will help you oversee effective risk management within your organisation, by using systems and controls to ensure the right business is conducted in the right way.
Or are you looking to understand how to detect and prevent specific financial crime risks, fraud, data and information security, bribery and corruption, and how to investigate and then prosecute? The ICA International Diploma in Financial Crime Prevention https://www.int-comp.org/programme/?title=ICA-International-Diploma-in-Financial-Crime-Prevention could be for you.
Many of our qualifications, and shorter courses will help you gain the skills you need to perform with confidence in your day-to-day role, and in your personal life, to help combat counterfeiting. There is no better time to get involved.
View our full suite of qualifications in our course finder.
 Cahal Milmo, ‘Counterfeit Britain: How the pandemic – and Brexit – has changed the UK’s booming £14bn trade in fakes’, inews, 21 May 2021:
https://inews.co.uk/news/long-reads/counterfeit-britain-how-the-pandemic-and-brexit-has-changed-the-uks-booming-14bn-trade-in-fakes-1013050 – accessed September 2021
 Michael Hatchwell, ‘Brexit trade agreement fails to replicate financial crime information-sharing’, GRC World Forums, 3 February 2021: https://www.grcworldforums.com/financial-crime/brexit-trade-agreement-fails-to-replicate-financial-crime-information-sharing/793.article – accessed August 2021
 David Povey, 'Are you accidentally funding terrorism?’, ICA Insight, 1 July 2019: https://www.int-comp.org/insight/2019/july/01/are-you-accidentally-funding-terrorism/ – accessed August 2021
 Andrew Stevens, ‘Coronavirus and counterfeits: How supply chain leaders can protect their products and brands’ Supply Chain Dive, 22 June 2020: https://www.supplychaindive.com/news/coronavirus-counterfeits-supply-chain-gartner/580210/ – accessed August 2021
 Gabriel Moberg and Justin Picard, ‘Counterfeiting during a pandemic’, Global Initiative, 15 September 2020: https://globalinitiative.net/analysis/counterfeiting-covid19/ – accessed August 2021
 Gabriel Moberg and Justin Picard, ‘Counterfeiting during a pandemic’
 Cahal Milmo, ‘Counterfeit Britain: How the pandemic – and Brexit – has changed the UK’s booming £14bn trade in fakes’
 FACT UK, ‘Counterfeit goods': https://www.fact-uk.org.uk/consumer-advice/counterfeit-goods/ – accessed August 2021
 Mark Stevenson, ‘Counterfeiting – the underworld threat to beating COVID-19’, The Conversation, 14 June 2021: https://theconversation.com/counterfeiting-the-underworld-threat-to-beating-covid-19-162627 – accessed August 2021
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