Turkish counterfeit trade explodes, fueled by falling lira | Turkey

Photos of fake Gucci bags, Louis Vuitton sweatpants and Nike sneakers are posted on the social media accounts of a Turkish store with more than 155,000 followers on TikTok. There are thousands of comments under the articles in English, Italian, Bulgarian, Polish, German, Spanish and French.

Turkey is the third largest exporter of counterfeit goods to the EU after China and Hong Kong, according to data on the value of seized goods. The falling value of the Turkish lira and the deterioration of the Turkish economy are further fueling demand as these items become cheaper for merchants buying in euros.

Counterfeit shoes for sale in Istanbul. Photograph: Bülent Kilic/AFP/Getty Images

“Our sales doubled in 2021. It’s such a good deal if you earn in dollars or euros,” said the Turkish store owner. “Foreigners can buy a high-quality replica Nike tracksuit for €30 and resell it for €90 back home.”

A December 2021 report published by the EU Intellectual Property Office (EUIPO) also highlights this trend. The value of counterfeits from Turkey has more than tripled from 2019 to 2020, reaching nearly €134m (£111m), and Turkey has become the biggest source of fake designer clothes and discontinued drugs at EU borders, overtaking China in these categories.

“We see counterfeits boom when the economy is bad,” said Zeynep Seda Alhas, an intellectual property rights specialist at Gün + Partners, an Istanbul law firm representing some of the world’s most famous brands. “The cheap lira made exporting counterfeits even more profitable.”

She said the number of court-approved raids by the company against counterfeit producers had doubled in 2021 and the number of items seized had nearly tripled. In January, he led what Alhas called “the biggest raid in Turkish history”, confiscating more than 350,000 pairs of fake designer sneakers from three Istanbul workshops, some half finished and all destined to be finally sent abroad.

“Profits are much higher in counterfeit products,” Alhas said, explaining that even factories that produce legally for big brands could “go wrong” in tough economic times, working extra shifts to produce counterfeits.

Turkey’s legal exports also surged during the currency crisis, rising 33% on the year to $225bn (£171bn), according to the government-run Turkish Statistical Institute. “There is no reason for counterfeit exports to grow less than legal exports,” said Ümit İzmen, former chief economist of TÜSİAD, Turkey’s main trade association.

Lost sales cost the EU 83 billion euros a year, EUIPO says and İzmen says working conditions at underground production facilities are less likely to comply with wage, child labor and labor laws. health and safety.

“Counterfeiting is generally seen as a minor offense and not a serious crime,” İzmen said. “But there is an organized criminal network behind it all. At the very least, you have to bribe someone at every customs point. »

Law firms like Alhas’ usually hear about large shipments being captured by customs officials – mostly in Germany, Austria and the Netherlands – and then try to find the production site in Turkey.

The website of neighboring Bulgaria’s customs authority is full of reports of vehicles from Turkey caught with counterfeit goods. In February 2021, hundreds of counterfeit perfume bottles were found hidden under a passenger seat on a bus, apparently hidden by the driver.

But a lot is happening. A producer of Dsquared2 fake jeans said there were freight companies in Istanbul that focused on counterfeit exports, filling trucks with counterfeits surrounded by originals. “They charge extra to transport counterfeits, they know people at customs,” he said. “They’ve built a web of webs all over the border.” A 2020 Europol report said a criminal group routinely transported large quantities of fake designer clothes from Istanbul to Greece with the help of three customs officers recruited to ‘facilitate’ their business for years before breaking out. caught.

Alhas said his company’s investigative team – which includes former law enforcement officers – would spend months tracking down factories that made counterfeits, posing as buyers and collecting evidence. to present to the courts in order to obtain authorization to carry out a raid. “They work like private detectives,” she said.

But catching the counterfeits was nearly impossible when orders were placed online and sent in small parcels by post, Alhas said.

“I haven’t had any problems with the law,” the store owner told the 155,000 TikTok followers, who claimed to send about 300 packages overseas a month. “I could sell a ton more, but I don’t want to attract attention.”