Let's start with a true story.
Y owns the copyright of a book, which is very popular in Y’s country.
X would like to buy the translation rights for their country and approaches Y with a good offer.
Y signs an agreement with X granting X the rights to translate the book into X's language.
The agreement sets the loyalty fee at 6% of 10,000 copies printed by X.
However，X prints 100,000 copies of their translated version, but tells Y he has only printed 10,000.
X has the agreement with Y so X can sell translation copies in their country "legally".
Y has no proof of this, let alone any way of finding out the exact number printed.
This type of worrisome behaviour obviously damages the copyright owner's profits.
It can also damage profits by putting copyright holders off accepting larger offers from smaller or newer publishing houses who lack international history.