The Link Between Human Trafficking and Intellectual Property Rights: Mobilizing Programs to Combat Forced Labor and Counterfeit Goods via E-commerce

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Andrew R. Vaz
April 21, 2025

The swift growth of e-commerce has altered how products are bought and sold, enabling the infiltration of counterfeit and pirated goods across our borders and into our communities and households. Illicit products smuggled to American consumers via e-commerce platforms and online third-party marketplaces pose risks to public health and safety as well as to national security. This illegal activity has detrimental effects on American innovation and diminishes the competitiveness of U.S. manufacturers and workers. Human trafficking as well is detrimental to the American economy. What is seldom discussed is the link between human trafficking and counterfeit goods. This article will address the current approach to tackling human trafficking and intellectual property rights violations through e-commerce programs.

To be clear, human trafficking includes labor trafficking but anti-trafficking organizations, the media and the public continue to focus on sex trafficking. There is actual legislation on the books: the Victims of Trafficking and Violence Protection Act—the cornerstone of federal human trafficking legislation passed in 2000—covers labor trafficking, including debt bondage, forced labor and involuntary child labor. However, the challenges that human trafficking crimes pose for law enforcement and social service agencies are compounded by both the widespread inability of authorities to identify trafficking cases and the broadly inadequate reporting of vital human trafficking data.

Counterfeit Seizures
Counterfeiting is a hugely profitable business, with criminals relying on the continued high demand for cheap goods coupled with low production costs. U.S. Customs and Border Protection (CBP) states that the trade of illegitimate goods is associated with smuggling and other criminal activities and often funds criminal enterprises. According to CBP, not only are counterfeit goods produced in unregulated and potentially exploitative environments in foreign countries but the profits from their sales provide a funding stream to organized crime. To combat the entry of counterfeit and pirated goods into America, the CBP targets and seizes imports of counterfeit and pirated goods and enforces exclusion orders on patent-infringing and other IPR-violative goods.

The dangers of buying counterfeit products aren’t always obvious to consumers. E-commerce sales have contributed to large volumes of low-value small packages being imported into the U.S. Over 90% of all counterfeit seizures occur in the international mail and express environments, which are channels that small e-commerce packages destined for the U.S. travel through. Many of these shipments contain counterfeit goods that pose the same health, safety and economic security risks as large containerized shipments. Each time a counterfeit good is purchased, a legitimate company loses revenue. This translates to lost profits and the loss of U.S. jobs over time. CBP targets and seizes imports of IPR-violative goods. Counterfeits are a global problem with nearly 66% of all CBP IPR seizures coming from China in Fiscal Year (FY) 2023.

It is crucial to identify and seize unlawful funds because of the risk of reinvestment into other organized crime activities.

Forced Labor Practices
International crime-fighting agencies have determined that counterfeiting is an increasingly attractive avenue for organized crime to “diversify their product range.” Evidence suggests that criminal networks use similar routes and modus operandi to move counterfeit goods as they do to smuggle drugs, firearms and people. Groups such as the Mafia and Camorra in Europe and the Americas and the Triads and Yakuza in Asia have diversified into the illicit trafficking of counterfeit goods while at the same time being involved in crimes varying from drug and human trafficking to extortion and money laundering.

Adults in China are reportedly compelled to make aluminum for manufactured items. Reports indicate that Uyghurs, ethnic Kazakhs and other Muslim minorities from the XUAR are frequently subjected to forced labor in China through state-sponsored labor transfer programs. The Xinjiang Production and Construction Corps (XPCC) is a government paramilitary organization in Xinjiang that runs labor transfer programs and owns aluminum companies. There is evidence that both XPCC and non-XPCC aluminum producers in Xinjiang have received hundreds of members of persecuted groups through labor transfer programs.

According to academic researchers, the media, think tanks, businesses and government organizations routinely use coercive hiring practices, restrict employees’ freedom of movement and communication and expose them to physical violence, threats against family members, ongoing surveillance and exclusion from social and community life.

This type of involuntary labor transfer occurs in the larger framework of ongoing surveillance and under fear of punishment, including threats to family members and both explicit and implicit incarceration and internment. Sources indicate that approximately 17–20% of China’s aluminum is manufactured in Xinjiang under these labor conditions. Aluminum from Xinjiang is used to produce aluminum-intensive auto parts in China, including parts of auto bodies and auto-part components including engine block alloy, aluminum sheet and aluminum coil and aluminum wheel and chassis components. In 2022, China was the world’s largest aluminum manufacturer and the second-largest auto parts supplier to the U.S.

Conclusion
Governments around the globe are now aware that there is a direct link between counterfeit goods and human trafficking. The people and businesses producing counterfeit goods are breaking many laws and trying to evade enforcement. It’s no surprise that those same businesses—since they are already operating below the law—are often also using slave labor or child labor and exploiting their workforce in many other ways.

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Author: Andrew R. Vaz, Ph.D. is a graduate of the Ph.D. in Public Policy and Administration program at Walden University, specializing in Public Management and Leadership. He was already awarded a Master of Philosophy (MPhil) degree in the program. He is also a graduate of the Master of Science in Criminal Justice (MSCJ) and Master of Public Administration (MPA) double master’s program at Florida International University. He can be reached at [email protected].

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