EU report highlights “urgent need” to ramp up anti-counterfeiting investment

Global trade body the International Hologram Manufacturers Association (IHMA) has welcomed a new European Union report that paves the way towards “significant” opportunity and growth for anti-counterfeiting and security devices such as holograms.

The IHMA has commented on the Intellectual Property Crime Threat Assessment Report for 2022 by the EU Intellectual Property Office (EUIPO) and Europol. According to this document, piracy and counterfeiting continue to pose a serious threat to the European economy as well as people’s health and well-being. Imports of fake and illicit goods reached a value of €119 billion in 2019, which represented 5.8% of all goods entering the Eurozone.

More than 66 million counterfeit items were seized by EU authorities in 2022 – “a staggering amount”, according to the IHMA – as pharmaceuticals, food items, cosmetics and toys (among other goods) were targeted by criminals and counterfeiters looking to cash in on unwary consumers during the pandemic.

However, accessories and luxury products remain among the most prevalent categories for counterfeit goods, suggests the report, while spare parts and alcohol are also seen as being at high risk.

The pandemic has been lucrative for the trade in counterfeit and pirated products, says the IHMA, and criminals continue to see opportunities as global supply chains and economies re-adjust in the post lockdown economic and social landscapes.

The trade body is calling for additional pressure to be applied by manufacturers, brand owners, Government authorities and law enforcement to increase investment in anti-counterfeiting technologies to help stem the tidal wave of fake products flooding into the EU.

Security devices

Security devices on packaged goods can ensure quality and check the distribution and smuggling of illicit products, while items not displaying security holograms can be seized and destroyed.

Commenting directly on the EUIPO and Europol report, IHMA chair Dr Paul Dunn has stated that the ongoing ‘war’ on counterfeiting is a hard one to win and that efforts should never slacken.

He noted: “Holography has a key role to play as an effective and highly flexible weapon in the ongoing battle to thwart counterfeiters and fraudsters. All involved in the supply chain will be reassured by the presence of holograms on products and recognise the benefits they provide.”

Dunn continued: “The use of authentication solutions, as advocated by ISO 12931, enables examiners to verify the authenticity of a legitimate product, differentiating it from fake products emanating from counterfeiting ‘hotspots’ in Asia and eastern Europe. Even those that carry a ‘fake’ authentication feature can be distinguished from the genuine item if that item carries a carefully thought-out authentication solution.”

Advice for traders and enterprises

Dunn also points to the fact that the EUIPO’s Anti-Counterfeiting Technology Guide outlines advice to help traders and enterprises understand the main types of anti-counterfeiting technologies such as electronic identification, digital security devices and tracking tools.

“With counterfeiting on the rise,” he concluded, “there’s never been a more pressing need for the enforcement authorities to work together effectively, preferably with IP crime returning to become a priority in the fight against international crime. However, companies both large and small also need to maximise their protection against fakes by taking advantage of the numerous technical solutions out there to protect ownership rights and supply chains.”

IHMA forecasts “strong and potentially lucrative” growth for holography in 2022

COVID-centric threats, increased levels of illicit trade and the ongoing scourge of counterfeiting are among the factors set to drive hologram growth in 2022, particularly so when it comes to authentication purposes. That’s the view of the International Hologram Manufacturers Association (IHMA).

The IHMA suggests that authentication and ‘track and trace’ systems, which feature holograms, will help to underpin international efforts orchestrated by Governments and law enforcement agencies alike to bolster both overt and covert protection strategies across the next 12 months.

Fake COVID-19 cards, documents and vaccines will remain a big security threat in the months ahead. That being the case, Governments, law enforcement authorities and global supply chain managers must review their anti-counterfeiting plans now as well as their investment levels in security resources.

Growth in security devices appears “strong and potentially lucrative”, comments the IHMA, following the publication of the report entitled ‘The Future of Anti-Counterfeiting, Brand Protection and Security Packaging to 2026’ in addition to other reports predicting increased incidences of global counterfeiting alongside heightened awareness of tracing technologies.

These developments indicate that brand protection, ‘track and trace’ and other anti-counterfeiting technologies in packaging will increase in use as economies continue to wrestle with the substantial impacts of COVID-19.

In the coming months, the packaging industry will continue to benefit from the use of anti-counterfeiting solutions, particularly so as fears over shortages of medicines, pharmaceuticals and vaccines in many parts of the world drive the demand for counterfeit and illicit products.

Security devices

Security devices such as holograms placed on packaged goods can ensure quality and act as a ‘check’ relating to the distribution and smuggling of illicit products, while items not displaying them may be seized and destroyed.

According to the World Health Organisation, there’s a growing volume of fake medicines on sale in developing countries, while Interpol has reported an increase in fake medical products. Seizures of fake COVID-19 test kits and personal protective equipment have also been reported by the World Customs Organisation. Added to this, the economic damage wrought by COVID-19 – including tax hikes, global shortages of raw materials and finished goods, rising prices and falling incomes – is providing particularly fertile ground upon which illicit trade can flourish.

This situation is set to continue in the next 12 months, the IHMA predicts, while growth in authentication devices will stay “strong and potentially lucrative” on the back of forecasts that the market for anti-counterfeiting technologies targeted at pharmaceuticals and cosmetics products will grow. The overall global market for anti-counterfeit devices on security packaging is projected to be worth in excess of US$188 billion by 2025.

Survey results

A recent poll has revealed that almost 50% of hologram manufacturers and suppliers are witnessing an increase in demand from customers, specifiers and end users for holographic devices and technologies. This indicates that hologram users will continue to be concerned about the impact of counterfeiting on supply chains as the pandemic’s impact is felt well into the New Year.

In conversation with Security Matters, IHMA chair Dr Paul Dunn observed: “Counterfeiting puts Governments, companies and the public at risk and must be tackled effectively to minimise its impact on society. We look forward to seeing supply chains further bolstered in 2022 with countries enhancing their anti-counterfeiting plans, which should include the introduction of harder-hitting anti-counterfeiting legislation and strategies.”

Dunn added: “It’s perfectly clear that, in the face of the continued impact of COVID-19 and other threats, we can legitimately say law enforcement, Governments, brand owners and other influencers will continue to push the demand for authentication and brand protection devices such as holograms.”

Holography will also hold up well in comparison with other optical variable features in the currency market in 2022, observes the IHMA. Despite predictions about the demise of cash, the demand for banknotes has actually increased around the world during the pandemic, and especially so for high value notes as a ‘store of value’, which in turn fuels the demand for holograms.

One third of all banknotes currently feature a holographic device, while the R&D effort expended on ever-more secure and complex holographic features for both paper and polymer banknotes that reassure the public and central banks about cash authenticity will continue.

Dr Paul Dunn

On the other hand, a decrease in international and domestic travel has seen a decline in the demand for passport and travel documents and, hence, for holographic devices that protect them. For as long as uncertainties remain around COVID, this situation will persist, but is somewhat offset by the global migrant crisis, which will continue to drive the development and deployment of secure personal identification outside of that related specifically to COVID-19.

Pushing the boundaries

Paul Dunn continued: “Innovative features in banknotes are pushing the boundaries of what the technology can achieve, reflecting the fact that there’s plenty of mileage in holography. We will also see new applications for holographic features on ID documents coming through, whereby innovations directly linked to digital applications, packaging and tax stamps could all witness continued growth.”

The exploration of holography technologies for new wearable head-up displays and other smart devices to enhance people’s lives along with applications will see ongoing development in 2022. Holographic optical elements used in, for example, vehicle lighting and head-up displays will also continue to gain traction alongside ‘groundbreaking’ holographic applications in medical imaging, solar energy, data storage, healthcare and cryptocurrencies.

As advocated by ISO 12931, the use of authentication solutions enables examiners to verify the authenticity of a legitimate product, differentiating it from fake products emanating from counterfeiting ‘hot spots’ in Asia and eastern Europe. Even those that carry a ‘fake’ authentication feature can be distinguished from the genuine item if that item carries a carefully thought-out authentication solution.

International trade body IHMA issues warning over latest COVID-19 counterfeiting scam

News that people are being duped into buying fake COVID tests reinforces the urgent need for manufacturers and law enforcement agencies to step up investment in anti-counterfeiting measures including product security devices. This warning from the International Hologram Manufacturers Association (IHMA) comes in the wake of reports of illicit sales of fake negative COVID-19 test results.

The latter are becoming more widespread as criminals look to profit from travel restrictions imposed during the pandemic. Europol has reported an increase in cases of fraudulent COVID-19 test certificates being sold to travellers.

In tandem, an increasing number of countries in the EU and beyond now require travellers to provide a negative Coronavirus test in order form them to be allowed entry when travelling from a high-risk area.

According to the IHMA, this development strengthens concerns about manufacturers and the public being targeted for exploitation by unscrupulous counterfeiters looking to cash in on the trade in illicit goods and services as the pandemic continues to impact the globe.

Fake test results are just one example of a range of fraudulent activity that has emerged during the COVID crisis. Counterfeit coronavirus testing kits have been sold and online scams have risen, with criminals exploiting millions of people now working from home. Seizures of fake test kits were reported by both the US CBP and the World Customs Organisation during 2020 at a time when the counterfeit market represents an estimated 7% of global trade.

Fake medicines

The World Health Organisation has said that a growing volume of fake medicines are on sale in developing countries, while Interpol has seen an increase in fake medical products. Despite efforts from businesses, counterfeits continue to seriously harm brands while customers are being duped.

Counterfeiting is a multibillion-dollar global problem. The current crisis only exacerbates the situation, suggests the IHMA, which is urging supply chains and authorities to be extra vigilant and review how they tackle the threats posed. They may even have to bring forward plans for investment in authentication and verification technologies to protect brands, profits and reputation.

Indeed, an IHMA poll revealed that almost 50% of manufacturers and suppliers of holograms had seen an increase in demand from customers, specifiers and end users for devices and technologies in the face of COVID-19.

Opportunities for criminals

Dr Paul Dunn, chair of the IHMA, explained: “COVID continues to present opportunities for crafty criminals who are infiltrating global supply channels and deploying scams and counterfeiting measures to trick consumers and damage manufacturers. Furthermore, items such as falsified medicines and test kits can pose a terrible threat and even endanger lives.”

Dunn added: “Holograms can be effective in the front line fight against the counterfeiters and fraudsters, protecting brands and profits alike. Those involved in the supply chain are reassured by their presence on products, recognising the security and financial benefits that can be provided.”

The use of well-designed and properly deployed authentication solutions, as advocated by ISO 12931, enables examiners to verify the authenticity of a legitimate product, differentiating it from fake products coming from counterfeiting ‘hot spots’ in parts of Asia and eastern Europe. Even those that carry a ‘fake’ authentication feature can be distinguished from the genuine item if that item carries a carefully thought-out authentication solution.

Pharmas urged to review anti-counterfeiting plans ahead of no-deal Brexit

Pharmaceutical manufacturers are being urged to review their anti-counterfeiting plans ahead of the possible failure by the UK Government to agree on a Brexit deal with the EU.

Global trade body the International Hologram Manufacturers Association (IHMA) has warned that the UK could see a flood of counterfeit medicines after the Falsified Medicines Directive (FMD) ceases to apply at the end of the Brexit transition period on 1 January 2021.

In place since early 2019, the FMD uses mandatory safety features and an EU-wide database to help stem the distribution tide of fake or counterfeit medicines which could endanger lives.

The FMD will cease to apply if there’s no deal, leaving the UK with no access to the EU database except in Northern Ireland, where the FMD will continue to apply.

Interpol, Europol and national medicines agencies seize many falsified medicines and close hundreds of illegal websites selling them every year. Indeed, a report published by Europol’s Intellectual Property Office in 2019 estimates that counterfeit medicines cost the EU pharmaceutical sector more than ten billion Euros annually in lost revenue.

Fuelling the problem

The IHMA has stated that the COVID-19 crisis is also fuelling the counterfeit problem. Criminals are taking advantage of the pandemic to market and distribute fake pharmaceuticals, spurred on by increased demand and a shortage of basic drugs and medicines.

Illicit goods, or those with a vague provenance, can threaten people’s lives as well as damage corporate reputations and investment in companies and their products.

The IHMA has echoed calls by the National Pharmacy Association that, in the interests of patient safety, there should be ‘…the continuation of an anti-counterfeit system. However, not [one] necessarily governed by the rules of the FMD’.

The Royal Pharmaceutical Society has also voiced its concern over the issue, pressing Government to put “robust plans” in place in a bid to ensure that counterfeit medicines don’t enter the supply chain.

Infiltrating supply chains

Dr Paul Dunn, chair of the IHMA, said: “Failure to secure a Brexit deal could leave the door wide open to crafty criminals who are infiltrating global supply channels, deploying scams and counterfeiting measures to trick consumers and damage manufacturers. Furthermore, items such as falsified medicines and drugs bought online pose a terrible threat and can endanger lives.”

Dunn continued: “Whether or not the Government introduces new measures, the latest track-and-trace holographic systems remain a fast and effective front line security device in the battle to protect against any post-Brexit threats and keep medicines, and people, as safe as possible.”

He added: “Holograms can be effective in the front line fight against counterfeiters and fraudsters, protecting brands and profits alike. Those involved in the supply chain are reassured by holograms’ presence on products, recognising the security and financial benefits that are provided.”

The use of well-designed and properly deployed authentication solutions, as advocated by ISO 1293, enables examiners to verify the authenticity of a legitimate product, differentiating it from fake products coming from counterfeiting ‘hot spots’ in Asia and eastern Europe. Even those that carry a ‘fake’ authentication feature can be distinguished from the genuine item if that item carries a carefully thought-out authentication solution.

Anti-counterfeiting security technology receives accolade at Excellence in Holography Awards 2019

An advanced optical anti-counterfeiting solution for banknotes has won an award at the Excellence in Holography Awards 2019, organised by the industry trade body the International Hologram Manufacturers Association (IHMA).

Germany’s Leonard Kurz’s Kinegram Colors with ‘Flux Effect’ scooped the top slot in the ‘Best Applied Security Product’ category at the awards, which were presented by the IHMA at the annual Holography Conference in Athens.

Developed for the Singapore Bicentennial $20 commemorative currency notes issued in June , the effect’s use in the foil stripe marks the first time that a Kinegram with ‘Flux’ prominently features on a currency note as a critical security feature. In addition, the banknote marks the first time that a security foil has been applied to a fully offset-printed polymer substrate with a Steuer machine.

The Excellence in Holography Awards recognise outstanding achievement, marking success for those at the forefront of the sector who’ve developed innovative or commercially viable hologram products or techniques over the last 12 months.

Also commended in the same category was China-based Shandong Taibao Anti-Counterfeiting Technology Products for its cigarette packaging anti-counterfeiting holographic paper, as well as France’s Surys, who’s Moov patch features as a high-level authentication feature on the new Sudanese 1,000 pound.

Attended by hologram suppliers, manufacturers and end users from around the world, the event saw IHMA chairman Dr Paul Dunn commend the standard of entries as extremely high, with all of them adding to an industry that continues to innovate, evolve and find new markets.

Dunn commented: “This award marks an ongoing advancement in the design, development and technology of commercial holograms, which continue to find fresh and innovative ways in which to add value and heightened levels of security to products used by billions of consumers the world over.”

IHMA report reveals “strong demand” for packaging authentication technology

According to the International Hologram Manufacturers Association (IHMA), the Global Anti-Counterfeit Packaging Market Professional Survey Report 2018 signals the ‘added expertise… holograms provide in the authentication of packaging products’. This reaffirms the ‘strong and robust’ market for holograms among authentication devices in the coming years.

The report examines the anti-counterfeit packaging market in North America, China, Europe, Asia, Japan and India and forecasts production, revenue, consumption and import and export in these regions up to 2025. 

The market for global anti-counterfeit packaging technologies is set to continue to grow in the next few years, reaching more than US$357 billion by 2026. Growth in packaging anti-counterfeiting devices appears ‘strong and lucrative’, states the IHMA, in the face of continued incidences of global counterfeiting and sector awareness of advanced track and trace hologram technologies.

Those involved in the packaging sector, including brand owners and converters, will benefit from the commercial opportunities built around anti-counterfeit packaging technologies identified in the report.

Counterfeiting: a lucrative business

Counterfeiting is very lucrative and the IHMA is calling for all in the packaging supply chain to apply pressure to tackle the billions of fake products inundating global markets. Security devices on packaged goods can ensure quality and check the distribution and smuggling of illicit products, while items not displaying security holograms can be seized and destroyed.

Manoj Kochar: chair of the IHMA

Reviewing the report, IHMA chair Manoj Kochar said people cannot afford to rest on their laurels when it comes to the war on counterfeiting. “Holography has a key role to play as an effective and highly flexible weapon in the ongoing battle to thwart the counterfeiters and fraudsters. All involved in the supply chain will be reassured by the presence of holograms on products and recognise the benefits they provide.”

The use of well-designed and properly deployed authentication solutions, as advocated by ISO 12931, enables examiners to verify the authenticity of a legitimate product, differentiating it from fake products emanating from counterfeiting ‘hot spots’ in Asia and eastern Europe.

Even those that carry a ‘fake’ authentication feature can be distinguished from the genuine item if that item carries a carefully thought-out authentication solution.

Detail on the IHMA

The IHMA is made up of 100 of the world’s leading hologram companies. Members include the leading producers and converters of holograms for banknote security, anti-counterfeiting, brand protection, packaging, graphics and other commercial applications around the world. Those members actively co-operate to maintain the highest professional, security and quality standards.

 

New ‘opportunity’ for holography as IHMA welcomes Bank of England polymer banknotes

New polymer banknotes introduced by the Bank of England have been welcomed by the global hologram trade body which sees it as an ‘exciting opportunity’ to showcase the very latest developments in security devices for currency applications.

The International Hologram Manufacturers Association (IHMA) was commenting on the bank’s decision to start phasing-in new £5 polymer notes from 2016 after a period of public consultation.

New £10 notes will follow as the old cotton fibre and linen rag banknotes are removed from circulation and destroyed.

The polymer banknotes will be made from a thin, transparent and flexible film consisting of polypropylene which will be coated with a lacquer layer that enables it to carry the printed design features of the banknote. This will allow the inclusion of windows or clear portions in the design, used to provide enhanced protection and featuring holograms for verification and anti-counterfeiting purposes.

The IHMA says that other countries such as Canada have been using polymer banknotes featuring holograms successfully for many years. If the UK banknotes employ the same technology as the new Canadian ones, it’s another example of how holography continues to evolve as the leading security feature for notes.

Holograms on banknotes: the back story

Holograms have featured successfully on banknotes since 1987, evolving over the last two decades from simple patches to complex stripes as integral design and print features on notes.

Today, the annual global volume of banknotes produced is in excess of 125 billion*, so the reward for hologram producers capable of providing the technology to overcome the technical challenges is potentially highly lucrative.

Ian Lancaster: general secretary at the IHMA

The success of holograms for both polymer and paper banknotes has been down to their role as a Level 1 security feature that’s instantly recognisable. The technology remains to the fore as part of an array of overt features which make it quick and easy for not only the general public but also cashiers and those operating cash tills in stores to recognise whether or not a banknote is bona fide.

Increasing adoption of holography on banknotes reinforces the hologram’s position as a pre-eminent security feature in the global fight against counterfeiting. The use of sophisticated anti-counterfeiting features will mean that the banknotes will be more secure because they will include a larger area for holograms to be featured. New Zealand reported a big fall in counterfeiting after it introduced new hologram banknotes.

In Canada, for instance, the central bank is now producing a suite of five polymer banknotes featuring advanced ‘full-on’ holograms. This success could provide a blueprint for the way forward for the Bank of England’s new polymer notes, says the IHMA.

Effective weapon against the fraudsters

“Holography is an effective weapon in the battle to thwart banknote counterfeiters and fraudsters,” said Ian Lancaster, the IHMA’s general secretary, “and has evolved to become an important feature of modern banknotes.”

Lancaster added: “The Canadian banknotes are a great example of this evolution and illustrate some of the best and most technically innovative holograms on banknotes, which can work specifically with the window the polymer substrate offers to deliver real added value solutions. In fact, this is such an effective feature that paper banknotes are now being developed which have a polymer window.”

In conclusion, Lancaster explained: “Polymer substrates, like their paper counterparts, are now benefiting from this type of technology. We hope that the Bank of England will follow the example of Canada and others to have banknotes that are both potentially more durable and which feature the very best in modern hologram technology.”

*The Holo-pack•Holo-print® Industry Study