A photograph of counterfeit earphones for smartphones from China, seized by Seoul Customs. (Photo supplied by Seoul Customs)

The commerce quantity of counterfeit items infringing on South Korea’s mental property exceeded 13 trillion received (roughly $9.63 billion) in 2021, in keeping with a report printed by the OECD on July 2. The report, titled “Illegal Trade and the Korean Economy,” highlights the numerous financial impression of counterfeit merchandise on South Korea, a nation famend for its technological innovation and mental property (IP) property.

From 2011 to 2019, 43.9% of the “Korean counterfeit” seizures at customs have been merchandise from Hong Kong, whereas 35.5% have been from China. This implies that roughly 80% of the seized counterfeit merchandise originated from these two areas. Notably, 94.7% of the customs seizures throughout this era have been electrical and digital merchandise akin to televisions, cellphones, and cellular equipment.

In 2021, the South Korean authorities misplaced about 2.18 trillion received in nationwide tax income resulting from counterfeit merchandise. The annual commerce quantity of unlawful counterfeit merchandise infringing on South Korea’s IP was $9.691 billion {dollars}, equal to 1.5% of South Korea’s whole export worth of $644.54 billion. The ICT trade alone suffered a lack of $3.6 billion, equal to 13.4% of its income, resulting from IP infringement. The whole manufacturing sector skilled a lack of $6.1 billion in income, and the discount in manufacturing jobs amounted to 13,500 positions. The South Korean authorities misplaced $1.57 billion in earnings and company tax income.

The OECD report underscores the vulnerability of South Korea’s economic system to counterfeit merchandise, regardless of its standing as a number one “innovation economy” primarily based on technological developments and IP. The report states, “The level of civil penalties for counterfeiting in South Korea is relatively low,” and advises that “raising the level of penalties to a deterrent level is key to combating illegal trade.”

The OECD’s findings are significantly regarding given South Korea’s reliance on its ICT sector and manufacturing industries, that are closely impacted by IP infringement. The report requires stronger enforcement measures and elevated penalties to discourage unlawful commerce and shield South Korea’s financial pursuits.

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