Counterfeit Trading in a Top Global Business Hub: the UAE
One third of UAE citizens occasionally buy counterfeit luxury goods
With these significant trading opportunities, however, come downsides, particularly in the shape of widely available counterfeit products on the market. This ease of access to counterfeits is combined with a high demand by UAE citizens for fake items, in particular luxury goods. Even though the UAE is considered a rich country, with citizens enjoying one of the world’s highest per capita incomes, researchers estimate that one third of UAE citizens occasionally buy counterfeit luxury goods.
According to a study conducted by Paris Sorbonne University Abu Dhabi, Emiratis do not perceive any legal or financial risk when purchasing fake items. On the other hand, they do perceive significant psychosocial risks (feelings of shame and guilt about buying counterfeit goods), as well as risks pertaining to the performance of poorer quality counterfeits. To address these risks, citizens have developed coping strategies that include selecting only the best counterfeit products or favouring copies of recently released or limited-edition goods that are less familiar to the general public. The study also revealed that Emiratis “buy counterfeit items, particularly because they are large buyers of luxury goods” and that the rising number of collections launched by luxury brands “could increase demand for genuine products as much as for counterfeit goods.”
In addition to buying counterfeit goods in physical markets, and in line with a worldwide shift to online shopping, accelerated by the COVID-19 pandemic, the number of UAE internet users ordering items online increased from 27% in 2019 to 63% in 2020. Along with this increase came a corresponding increase in online counterfeit purchases, including fake medicines, a multitude of which sprang up for sale online during this period.
UAE Seizures by Product Category
Dubai’s notorious counterfeit markets
Two of Dubai’s most notorious markets for counterfeit products are found in the districts of Deira and Al-Karama. Located on the eastern periphery of Dubai, Deira is home to several markets for products such as perfume, gold, and spices. Across from Deira, on the opposite side of Dubai Creek, is Al-Karama, with the Old Karama market specializing in bags, sports equipment, and sunglasses, as well as other areas selling products such as cosmetics, watches, clothes, and cell phones.
The widespread presence of counterfeits in these districts, in particular, represent important risks for brand owners, given that these areas are frequented by millions of tourists and locals alike. Such risks include damage to a brand’s reputation and a reduced demand for original goods, which subsequently leads to decreased revenues. Moreover, the more popular a brand becomes, the more likely it is for the brand owner to face IP-infringing problems.
UAE Seizures by Origin Country
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Measures to combat counterfeits
The measures employed by Emirati authorities to combat counterfeit products in the market comprise customs seizures, coordinated police raids and expanded cooperation with stakeholders such as brand owners and diplomatic missions. In 2021, the Intellectual Property Rights (IPR) Department at Dubai Customs announced that during the first nine months of the year, the authorities thwarted 2,669 attempts to introduce counterfeit products in the country, a sharp increase compared to the same period in 2020 when 1,715 such actions were registered. In just one case alone, the customs identified a shipment containing over 17,200 packs of fake Vaseline petroleum jelly.
Moreover, in 2021, 390 IP disputes were resolved and more than 2 million counterfeit goods for 221 trademarks were recycled. In comparison, in 2022, Dubai Customs announced a total of 2,147 seizures, while dealing with 388 IP disputes.
At the same time, the government organized 93 recycling operations, targeting 173,000 counterfeit items. In one such action, in November 2022, the IPR Department recycled over 22,000 counterfeit goods for 24 brands from several countries, such as Germany, Italy, and the United States. The products included watches, phones, bags, shoes, and cosmetics.
UAE Seizures by Mode of Transport
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To conclude, the United Arab Emirates in general, and Dubai, in particular, represent major transit hubs and are thus targeted by traders in counterfeit products. Whether these products are meant for internal commerce or for further export to other countries, customs authorities annually confiscate goods worth millions of dollars.
However, despite intensifying seizures and raids, IP-infringing items end up being available for purchase, particularly in the notorious areas of Dubai such as Deira or Al-Karama. The categories of goods on offer range from watches, bags, and perfumes, to life-threatening medicines that pose serious health risks to the population.
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