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Latest Official Report Published on Counterfeit Goods Entering EU Borders

On 23 September 2016, the European Commission published a new Report entitled “EU customs enforcement of intellectual property rights: results at the EU border 2015”. Highlighted in the report is the fact that mainland China continues to be the main country of provenance from which goods suspected of infringing an intellectual property right (IPR) are sent to the EU.

As for the other places from which specific counterfeit categories of products emanated in 2015, Hong Kong is named as a main place of provenance for mobile phones and accessories, memory cards, computer equipment, CD/DVD and lighters. Other notable countries of provenance include Benin for foodstuffs, Malaysia for body care items, Turkey for clothing, Montenegro for cigarettes and India for medicines. Mexico is the main country of provenance for alcoholic beverages, and Morocco for other kinds of beverages.

In 2015, customs authorities were reported to have made over 81,000 detentions, consisting of a total of 43.7 million articles. The domestic retail value of the detained articles represented over €640 million.

As for the actual product categories found to be the most pirated, the top categories of detained articles were, according to the new report, cigarettes, which accounted for 27% of the overall amount of detained articles. This was followed by other goods (10%), toys (9%), labels, tags and stickers (8%) and foodstuffs (7%). The category “other goods” contains a wide variety of products not belonging to any of the other categories, such as batteries, glue, design articles such as furniture and lamps, manuals and other documents, magnets, pesticides, etc. Compared with 2014, only the category for labels, tags and stickers is new among the top five.

Hong Kong companies plying their trade online may like to know that small consignments, via postal and courier traffic, still accounted for 77% of detained goods. In terms of number of articles detained in postal traffic, certain electronic equipment such as household machines, shavers, and hair straighteners (32%) came first, with medicines in second place (16%).

The report further notes that in 91% of detention procedures by customs, the goods were either destroyed after the owner of the goods and the right-holder agreed on destruction, or the right-holder initiated a court case to establish the IPR infringement. For a number of articles, 75% were destroyed or were subject to proceedings. However, 25% of the articles were released due to the right-holder not reacting to the notification by customs (i.e. in 11% of the released goods cases) or they were eventually found to be original goods (i.e. in 14% of such cases).

The survey that led to the report found that there has been a significant decrease in the number of articles detained in the following product categories: alcoholic and non-alcoholic beverages, shoes (other than sports shoes), jewellery, CDs and DVDs, “other” tobacco products (cigars, cigarette paper, electronic cigarettes and refills, etc.), and medicines. On the other hand, the most significant increases (namely, more than a 50% increase when compared to 2014) occurred in the categories of foodstuffs, “other” body care items (i.e. razor blades, shampoo, deodorant, toothbrushes, soap, etc.), sunglasses, handbags, ink cartridges and toner, vehicle accessories, office stationery, lighters, labels and packaging material.

In terms of procedures that were opened and dealt with by customs authorities, the top three categories remain the same as in 2014, namely, sport shoes, bags, wallets and purses, and clothing. The top categories were found to be, typically, goods ordered online and shipped via post or courier.

Mainland China remains the main country (with 41%) from where suspected pirated goods were coming at the moment of detention, and that were not released. Montenegro comes in second with nearly 18% (although the only product of note for Montenegro appears to be fake cigarettes). Hong Kong is third, with just over 9% of suspected pirated goods entering the EU.

At the top of the list of counterfeit goods of Chinese provenance are toys (more than 2.5 million), followed by labels, tags and stickers, and then “other goods”. Subsequently, packaging materials, sunglasses and bags, office stationary, perfumes/cosmetics, parts and accessories for mobile phones, and other equipment including technical accessories and parts are listed. These amount to a total of 12,506,679 articles.

Concerning Hong Kong, parts and accessories for mobile phones tops the list, with “other goods” coming in next, and followed by labels, tags and stickers, packaging materials, toys, medicine, lighters, other body care items (e.g., razor blades, shampoo, etc.), perfumes and cosmetics, and ready-to-wear clothing. These come to a total of 2,780,299 articles.

Content provided by Picture: HKTDC Research
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