From fakes to forced labor: EUIPO-OECD study reveals correlation between illicit trade in counterfeits and labor exploitation

Illicit trade in counterfeit goods is not only an economic threat, it is a profound social one. While counterfeiting harms legitimate brands, industries, and governments, it also generates hundreds of billions of USD in illegal profits each year. A less visible but equally critical dimension underpins this activity: the exploitation of workers, including forced labor, hazardous child labor, and widespread informality.

This report brings new evidence to light. It shows that countries with higher levels of labor exploitation are also those where counterfeit production and export intensity tend to be greatest. These findings reinforce what enforcement authorities increasingly observe in practice: counterfeit supply chains frequently rely on coercive labor practices, unsafe working environments, and the vulnerability of workers operating outside any form of legal protection.

By integrating labor-market indicators into the analysis of illicit trade, this study highlights the structural conditions that make both counterfeiting and labor exploitation possible — weak governance, limited oversight, and social and economic vulnerability. These interconnected risks demand integrated policy responses.

Prepared under the auspices of the OECD Working Party on Countering Illicit Trade (WP-CIT), this report aims to support governments in strengthening labor governance, enhancing coordination between customs, labor inspections, and enforcement bodies, and reinforcing responsible business conduct. Effectively addressing labor abuses linked to counterfeiting is central to ensuring safe and rights-based working conditions and to diminishing the incentives that fuel organized illicit activity.

Read the full report here.

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