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New EU Report Published on Counterfeit Goods, Including Toys and Clothing, Entering the EU

The European Commission has released figures showing the increasing number of interceptions of fake goods entering the EU due to the rising number of small parcels, express and postal traffic. The report released by the Commission emphasises the importance of cooperation of the customs authorities with the rights-owners in order to maintain the competitiveness of European businesses. Mainland China and Hong Kong have been identified as among the top origins of goods infringing intellectual property rights (IPRs).

The European Commission’s figures, published last month, show that while the total number of articles detained at customs for infringing intellectual property rights (IPRs) decreased, the number of consignments detained jumped from 57,433 in 2017 to 96,354 in 2018. In total, nearly 27 million items worth nearly €740 million were detained. The leading categories of detained articles were cigarettes, accounting for 15% of the overall amount of detained articles and toys, accounting for 14%. Packaging, (9%), labels, tags and stickers (9%) and clothing (8%) were also among the articles detained frequently.

Goods for daily use (including body care articles, medicines, toys and electrical household goods) made up 37% of the detained articles.

While mainland China leads as the country with the greatest number of IPR-infringing articles being imported into the EU in 2018 (accounting for around half of detained articles), Hong Kong is named as the second largest country of provenance according to the value of the goods (16.05% of the overall value of detained goods are said to come from Hong Kong). Hong Kong is followed by Turkey and the United Arab Emirates. Vietnam and Bangladesh appear on the list mostly due to their clothing imports and Macedonia was the main provenance for counterfeit alcoholic beverages. Cambodia is shown as leading in the import of counterfeit cigarettes and India was the main provenance for fake computer equipment.

Hong Kong businesses may wish to take note that the EU detained, in particular, high numbers of fake watches, mobile phones and accessories, ink cartridges and toners, CDs/DVDs, labels, tags and stickers from Hong Kong.

By far the most cases of detained goods were found to occur in the case of postal transport. Most detained articles in absolute numbers, however, arrive in the EU by sea. An increase was observed in both the number of detention cases as well as in the number of detained articles transported by express courier, rail and road transport.

Most of the articles (88%) detained in the past years were detained by customs authorities due to suspicions that they infringed an EU, international or national trade mark. The suspected infringement of design and model rights was the second most common reason. This affected mostly packaging materials, tableware, body care items, sunglasses, toys and shoes. Furthermore, toys and printed clothing items were especially prone to be suspected of infringing copyrights. Suspected infringements of patents related mostly to audio/video appliances.

Out of all detentions, 90% of goods were destroyed, a court case was initiated or they were subjected to criminal proceedings. Only 4% of detained goods were released because they were deemed to not infringe the rights after all. In 6.3% of cases, the detained goods were later released because the right-holder, after having been informed, did not take action.

The European Commission has been issuing an annual report on the enforcement of IPRs since the year 2000, based on data collected and transmitted by the responsible authorities of the Member States. This data provides the opportunity for the European Union Intellectual Property Office and the OECD to map economic data and the most common routes for fake goods. Based on a new EU Customs Action Plan on the matter for 2018-2022, the European Commission adopted measures to improve enforcement of IPRs and especially to fight piracy and counterfeiting.

The Customs Union of the EU has developed into one of its most important aspects. The European Union emphasises that it keeps the EU borders safe and protects its citizens from prohibited and dangerous goods. A recent study suggested that direct losses for EU businesses amounted to €56 billion per year due to counterfeiting, the equivalent of 468,000 jobs and causing knock-on effects on other sectors. This will provide the European institutions with material for thought and potential action.

The Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici, commented: "Customs officers across the EU have seen success in tracking down and seizing counterfeit goods that are often dangerous for consumers. Their job is made even more difficult by the rise in small packages entering the EU through online sales. Protecting the integrity of our Single Market and Customs Union, and effective enforcement of intellectual property rights in the international supply chain are also priorities. We need to continue stepping up the efforts against counterfeiting and piracy."

Content provided by Picture: HKTDC Research
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