European Anti-Fraud Office (OLAF) opens investigation into counterfeiting of COVID-19 related products, such as masks, mouth caps and test kits
Since the outbreak of the new coronavirus, the global demand for medical devices and hygiene products, such as masks, mouth caps, disinfectants and test kits, has skyrocketed. The European Union is no exception. There is also a very high need for these products in the EU Member States, both among healthcare providers and other professional users and consumers who wish to take their measures to protect themselves from the virus.
In order to cope with the scarcity of these products, remarkable initiatives are currently emerging at all kinds of levels. For example, the media in the Netherlands reports that the sewing machines in prisons are working overtime to put mouth caps together. Moreover, Shell announced on 20 March 2020 that it had decided to provide 2.5 million liters of an essential raw material for hand gel and is making it available free of charge for the production of hand gel for the healthcare sector in the Netherlands.
Illegal trade in counterfeit goods
Unfortunately, the crisis does not in all cases bring out the best in mankind. Irresponsible behaviour can be seen in all countries and at all levels. From perhaps still relatively harmless ‘hoarding’, resulting in empty shelves in supermarkets and a disrupted supply of toilet paper, hand gels and long-lasting foods, to, unfortunately, the dangerous international trade in counterfeit medical devices and hygiene products. In the current times of crisis, these products appear to be traded on the EU market through various channels, claiming that they could provide protection against coronavirus infection. The scarcity and great need for protective products mean that the illegal trade in counterfeit goods is currently apparently making a lot of money.
Products that do not comply with safety regulations
Market access of products is regulated in the EU to ensure a high level of consumer safety. Products may only be placed on the market if they comply with detailed regulations often laid down in European product regulations. Specific rules apply to some product categories, such as medical devices and personal protective equipment.
Counterfeit products usually do not meet the safety regulations. They can be ineffective, posing a potential threat to the health of the user. All in all, there is a great interest in banning these products from the market. National supervisors, such as Dutch customs and the Netherlands Food and Consumer Product Safety Authority (“NVWA”) in the Netherlands, pay attention to this. There are also major concerns at European level about the counterfeit products related to COVID-19 that are trying to find their way onto the European market through international trade.
Investigation of the European Anti-Fraud Office (OLAF)
Also on 20 March 2020, the European Anti-Fraud Office of the European Commission (OLAF) announced that it had immediately launched an investigation into the trade of counterfeit COVID-19 related products a day earlier. OLAF is a Directorate-General of the European Commission with the aim of combating fraud, corruption and other unlawful activities in the EU.
OLAF states in its press release that since the pandemic it has been collecting intelligence and information on this illicit trafficking of counterfeit COVID-19 related products and is in close contact with competent authorities in Member States and third countries. Counterfeit goods must be stopped, according to OLAF, because they are often ineffective and potentially harmful to health. In addition, it is of course undesirable for illegal trade to take advantage of the crisis by offering fake products at very high prices at the expense of others.
As an example, OLAF shows in the press release a fake face mask for children with figures from the Disney-film Frozen on the packaging. Research data would suggest that the counterfeit goods enter the EU through online channels and postal and courier services. In addition, the products would also arrive in containers provided with false papers, and declared as other products. This also infringes customs legislation.
The trade in counterfeiting of medical and hygiene products is not only a threat to people’s health, but the import of counterfeit products also infringes on intellectual property rights, such as trademark law, of others. This, too, causes substantial economic damage.
Make sure you are well informed
Unfortunately, the corona crisis will continue for a while. Companies may consider importing these insufficiently available products into the EU. Perhaps they may want to do something good or see opportunities now that their normal business has stalled. They may be approached by a foreign business partner who offers a batch for sale.
Companies that intend to import medical devices and hygiene products, such as mouth caps and disinfectant gels, or are offered shipments from third countries, are advised to carefully study what they actually buy and get advice on this. This is to prevent them from becoming involved in placing on the market of unsafe products, trademark infringement, illegal parallel trade or face customs seizures under the anti-piracy regulation. Naturally, this advice also applies to logistics service providers who submit import declarations, store or transport products.