Sales of counterfeit Nike shoes have helped fund terrorism around the globe, according to a new report sponsored by the French government.
So have the sales of counterfeit clothing, perfumes and other accessories, as well as drug deals, cigarette smuggling and the proceeds of other criminal activities.
In fact, some 20 percent of financing for terror groups comes from those channels, prompting the Investigative Project on Terrorism to comment that the Islamic terrorists who attacked Paris in January 2015 “earned money from drug trafficking and counterfeit sales, including Nike shoes.”
“The Belgium city of Molenbeek, home to a disproportionate number of radical Islamist terrorists and sympathizers, is strongly associated with counterfeit activities. In 2012, for example, authorities there seized about three tons of counterfeit clothes, perfumes, and other accessories,” IPT said.
The terror monitor noted: “Terrorists’ reliance on counterfeiting has attracted further attention with the rise of Islamic State terrorist networks. Without a formal state sponsor, and facing considerable setbacks in Syria and Iraq, ISIS may start to rely more on crime to fund operations. The terrorist organization also extensively recruits European operatives with criminal backgrounds.”
The report is from the Union des Fabricants (UNIFAB), which “was designated by the prime minister to represent the private sector in the inter-ministerial group on counterfeiting.”
“It is with this report that our association of over 200 members (companies, groups, professional federations) representing all business sectors (luxury, medicines, software, sports, toys, automobile, consumer goods, perfumes and cosmetics, musical and cinematography edition, wine and liquor, horticulture, etc.) wishes to take on its role,” the report said.
It outlines, for example, how Hezbollah, “has exploited counterfeiting methods on several occasions, including in 2003 when Lebanese authorities found containers full of counterfeit automobile parts worth over $1 million … intended for Hezbollah supporters.”
“In 2006, U.S. authorities arrested 19 people who were part of a counterfeit drug network spanning five countries and involved significant profits for the Iranian-sponsored terrorist organization,” IPT reported.
“Though Hamas’ criminal financing operations are well documented, the report also describes Fatah and the Palestinian Authority members’ suspected involvement in illicit financial activities and cooperation with criminal networks. Interpol believes that al-Qaida and affiliated organizations earned between $300 and $500 million in the last decade from illicit activities and smuggling counterfeit goods worldwide,” IPT said.
The study itself recommends that international laws be harmonized, specialized courts be created to handle such cases, all Internet actors be encouraged to crack down on counterfeiting, victims and anti-counterfeiting associations should be allowed to pursue civil actions, and awareness and cooperation should be increased, among other things.
“Still all too often considered as a minor offense, industrial and commercial counterfeiting currently represents a real threat to both the global economy and consumers alike, to the environment or the stability of states,” the report said.
“While counterfeiting harms the companies that fall victim to it, therefore ruining innovation and destroying jobs, it hurts consumers, who put their health and safety at risk by purchasing products that do not meet the safety standards in force. It is also the source of significant losses in tax revenues for states, eventually resulting in declining growth and therefore fewer public services for citizens.”
The report said counterfeiting “represents up to 10 percent of world trade and costs an estimated … 2.5 million (jobs) to G20 countries. ”
“In 2009, the OECD assessed the global financial impact of counterfeiting at between $250 billion and $500 billion. We estimate that in 2015, ‘counterfeiting will represent a turnover of over $1,700 billion world-wide. ‘This is more than the value of drugs and prostitution combined.”
Fake brand name items have been used, as has the piracy of digital content such as movies and music.
More and more it is being linked to organized crime, and the report puts all the links together.
The terrorists who attacked in Paris early in 2015 “lived from drug trafficking, but also and particularly, from the sale of counterfeit products, including Nike trainers,” the report said.
It explained how the two Kouachi brothers were the focus of an investigation into counterfeiting, but eventually the case dissipated and investigators went away.
“Just seven months later, the Kouachi brothers burst into the newsroom of Charlie Hebdo,” the report said.
Further, ISIS now “is structured like a real multinational company,” with much of its revenue from cigarette smuggling and counterfeiting.
The report concluded: “Counterfeiting threatens the economy of all developed and developing countries. It has changed its face in just a few decades, becoming largely industrialized and now affecting all economic sectors. It has particularly turned into a form of organized crime that finances terrorist organizations.
“Today, everyone must understand that the consequences of counterfeiting go beyond just affecting the interests of rights holders: people’s interest as a whole, is threatened.”