PARIS, 08 Feb. - (ANA) - Cheap counterfeit goods may seem harmless, but their real cost is often paid far from view. A new OECD–EUIPO report, From Fakes to Forced Labour, sheds light on how illicit trade in counterfeit goods is closely linked to labour exploitation, with consequences for workers, consumers and markets alike.

 

This report presents new empirical evidence demonstrating a robust link between trade in counterfeit goods and labour exploitation. 

 

Countries with higher levels of forced labour and informality show greater counterfeit-export intensity, indicating that illicit production thrives where workers are unprotected and easily replaced. These findings call for integrated policy action: addressing counterfeiting requires improving labour-market conditions and promoting high labour standards is important to ensuring clean and competitive global trade. Strengthened data sharing, coordinated enforcement, responsible business conduct, and enhanced social-protection systems are essential.

 

 

 

 

Illicit trade in counterfeit goods remains a significant and persistent threat to the global economy, valued at up to USD 467 billion annually. Beyond its economic impact, counterfeiting is closely intertwined with labour exploitation, including forced labour, hazardous child labour and other severe labour-rights violations. Criminal groups operating in illegal activities systematically rely on vulnerable and unprotected workers to minimise production costs and maximise illicit profits, often outside any regulatory framework. This report provides an empirical assessment of the labour-market dimensions of trade in counterfeits, combining descriptive evidence, correlation analysis, and econometric modelling.

 

The analysis identifies strong and recurrent associations between the intensity of counterfeit trade and weak labour-market conditions. Countries more frequently identified as sources of counterfeit goods tend to display higher levels of child labour – including hazardous forms – , greater prevalence of informal employment, longer working hours, weaker labour protections, and higher incidence of fatal occupational injuries. Positive correlations also emerge between the value of counterfeit exports and the prevalence of forced labour.

 

Econometric modelling further reinforces these findings. After controlling for income levels, trade openness, and institutional quality, forced labour remains a strong and statistically significant predictor of counterfeit-trade intensity. The model indicates that a one-percentage-point increase in the prevalence of forced labour is associated with an estimated 0.0076% increase in the value of counterfeit trade. Lower minimum-wage protections also correlate with higher levels of counterfeit activity, underscoring the central role of labour exploitation as a cost-reduction strategy for traffickers. Further exploratory tests suggest significant links between high informality and greater exposure to illicit economic activity.

 

These results confirm that counterfeiting and labour exploitation are not parallel phenomena but mutually reinforcing components of environments characterised by weak governance, limited rule-of-law enforcement, and social vulnerability. Evidence from enforcement agencies – such as clandestine workshops employing migrant workers under coercive conditions – further illustrates how criminal networks exploit labour at multiple stages of illegal supply chains.

 

Recognising this connection has important policy implications. Strategies to address illicit trade should include labour-market dimensions, and actions against forced labour must also reflect the trade and supply-chain dynamics that enable illicit production. Stronger labour governance, better co-ordination between customs, labour and law-enforcement authorities, and wider use of OECD due-diligence tools can help tackle the underlying conditions that enable counterfeiting and labour exploitation. Emerging regulatory measures – such as the US Uyghur Forced Labor Prevention Act and the EU Forced Labour Regulation – also signal growing international attention to these risks, although they do not directly target criminal networks.

 

This report highlights the need for integrated responses: combining strengthened labour protections, enhanced trade-enforcement tools, improved data availability, and responsible business conduct. Understanding and acting on the labour-abuse component of trade in counterfeits is crucial not only for worker protection and market integrity, but also for undermining the criminal groups that profit from it.

 

To download the full report, visit: https://www.oecd.org/content/dam/oecd/en/publications/reports/2026/01/from-fakes-to-forced-labour_a33accab/540dc43e-en.pdf

 

 

AB/ANA/08 February 2026  - - -