Value reached last year is the sum of the losses recorded by 15 industrial sectors and the estimate of taxes that are no longer collected.
In 2020, Brazil lost around R$ 287 billion to the illegal market, according to a survey by the National Forum Against Piracy and Illegality (FNCP). The value is the sum of the losses recorded by 15 industrial sectors and the estimate of taxes that are no longer collected.
These products include clothing, perfumes, medicines, streaming platforms, cable TV, and even fake luxury cars. When it comes to piracy, there is no limit to criminals.
The study shows that over the past year, more than 2.6 billion fake products were seized across the country. Of these, 1.8 million came from São Paulo, but that number was atypical, due to the coronavirus pandemic, which reduced the circulation of people on the streets.
Before the crisis, in 2019, the state's Civil Police had learned more than 7.6 million counterfeit products. Now, in 2021, with the beginning of the economic recovery, the amount of pirated products on the market has returned to growing strongly. In the first quarter of the year alone, 2 million fake goods were seized. More than the entire year of 2020.
"There is acceptance by society. People want to buy products at the lowest price and they do not question the ethical value of this purchase. Behind a very cheap product, there is fraud, there is smuggling, there is piracy, there is something wrong" , says Edson Vismona, president of the FNCP.
The punishment for those responsible for this type of crime is usually mild. “Most of these crimes have less offensive potential, that is, criminals do not receive two years and, therefore, end up having the benefit of Law 9,099, which does not bring the possibility of arrest in flagrante. These individuals end up responding in freedom”, says Wagner Carrasco, delegate of the 1st police station for investigations of material property at the DEIC.
The penalty may be small, but the damage caused by piracy is enormous. “Money that is not being collected and could certainly be reverted to health and public safety benefits and we are throwing it away. Or rather, we are playing in the hands of criminals”, says Vismona, from the FNCP.
The practice also ends up hurting the maturation of national producers. "We have some national brands already developed, but we would have much more, if the consumer collaborated in order to buy original products only", says Alan Towersey - tax auditor of the Internal Revenue Service.
You get what you pay for
According to authorities, crime continues to grow, because there is demand. Consumers looking for something more affordable. What these people don't take into account is that in this case, the cheap is expensive. And it hinders economic growth and job creation in the country a lot.
"Especially when the economy is not doing well and the industrial sector, which could become versatile and serve other markets, cannot, because there are parallel products in the market that do not let it also participate in that item, for example. They end up interfering with a large share for the industry”, says Perci Totini Filho, owner of a toy factory for nine years.
The Perci factory employs just over 80 employees, and he believes that without competition with pirated products, the growth of the business and the hiring of new employees would be almost immediate.
“At each period of new items that we were going to produce, new employees would come in to work together and service the trade. So, growth of 20%, 25%, it would be impossible not to happen", he says
“[Without piracy] we would have more industries, more jobs, more innovation, more generation of current technologies. You would strengthen the links of the economy, you would have products certified by Anatel and by Inmetro, guaranteeing people's safety. You would have a healthy market, where you would revert these resources from the purchase of these products to the market itself, to Brazil, thus generating development”, says Vismona, from FNCP.
It is already clear that the piracy bill is paid by the government, businessmen and the population. The question is, how do such large amounts of counterfeit materials get through so many enforcement agencies?
"They will be testing and hiding the cargo inside containers in different ways, bringing it to airports, at the dry border, amidst legal cargos many times," says Richard Fernando Amoedo Neubarth, customs delegate at the Federal Revenue of Brazil at Port of Santos.
Piracy X Smuggling
In addition to piracy, data on the illegal market also includes smuggling. It's important to understand the difference between the two.
“Smuggling is the introduction into the national market of prohibited goods, for example, cigarettes without authorization from Anvisa. Piracy is another illicit that is not necessarily a foreign commodity. It can also be done in Brazil. So it's a product that doesn't have a trademark or copyright authorization to be sold”, says Alan Towersey, tax auditor at the Federal Revenue.
But the main focus of this report is piracy, for one main reason: There are still those who find the trade in counterfeit products something harmless.
The operation is complex and done by extremely organized groups. The details you discover in the next chapter in this series on piracy. There will be four parts shown on Prime Time, starting at 6 pm, on CNN.