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Counterfeiting costs each Cypriot €234 a year

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Cyprus is among the most affected countries in the EU when it comes to counterfeit goods, losing €198m worth of sales in 13 sectors, according to a report from the European Union Intellectual Property Office (EUIPO) released on Wednesday.

These figures represent 15.1 per cent of value within these sectors.

Counterfeiting costs every Cypriot €234 and accounts for the loss of around 1,256 jobs annually.

The five hardest hit sectors in Cyprus are clothing, which loses €69m, or 13.2 per cent in revenues, cosmetics, €36m, or 24.4 per cent, medicine, €30m, or 14 per cent, jewellery, 17m, or 15.5 per cent, and wine and other alcoholic drinks, €12m, or 15 per cent.

In addition to analysing the supply of counterfeit goods and pirated content, the EUIPO has also studied the demand side, that is, the attitudes of EU citizens towards IPR and their willingness to engage in illicit consumption.

The incentives for consumers to purchase counterfeit goods include lower prices, easy accessibility and a low degree of social stigma associated with such purchases.

In a study carried out in partnership with the European Patent Office (EPO), EUIPO found that the total contribution of Intellectual Property Right (IPR)-intensive industries to the EU economy accounts for approximately 42 per cent of GDP, or €5.7tr, and 28 per cent of employment – plus another 10 per cent in indirect employment effects in non-IPR intensive sectors.

Those sectors also generate a trade surplus of approximately €96bn with the rest of the world and pay their workers 46 per cent higher salaries than other sectors.

According to a study carried out by EUIPO and the OECD in 2016, estimates of IPR infringement in international trade in 2013, could reach as much as 5 per cent of EU imports, or €85 billion per year.
In a series of sectorial studies over the past five years, the EUIPO has estimated lost sales in 13 sectors (directly in the industries being analysed and across their associated supply chain), as a result of counterfeiting. These losses totalled more than €100bn per year.

“Abundant value, lenient sentences and high returns on investment, define the incentives for criminal gangs to engage in counterfeiting activities,” EUIPO said. “The modus operandi of such gangs is becoming increasingly complex as technology and distribution channels evolve, hand in hand with the breadth of products being counterfeited.”

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