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It's illegal because they are stealing the brand name of someone else. Companies try to make their brands stand for something (style, quality, durability). Knockoff items not only affect a company's sales, they can undermine the brand. That said, my daughter did buy a 'Gucci' handbag and brought it home without incident. Nobody said it was a counterfeit but the fact that she haggled the price down from 50 Euro to 15 didn't need any further explanation. You may transport this item in carry-on or checked bags.

At first I thought it would be kind of a fun accessory, but now that I realize how obvious it is that its a fake, I have never used it. There are places (real stores, not just guys on the street) especially in florence that sell wallets, handbags, belts, made of beautiful Italian leather. They aren't Fendi, Prada and such, but they can be very nice, and won't break the bank for a gift for your sister. In Venice you could get her a beautiful piece of Murano glass, albeit a very small one