Detention of counterfeit and pirated goods at EU borders in 2010 Frequently Asked Questions

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1 MEMO Brussels, 14 July 2011 Detention of counterfeit and pirated goods at EU borders in Frequently Asked Questions What is this report about? This report contains statistics on actions by customs in the EU relating to goods suspected of infringing intellectual property rights (IPR). These statistics are established by the European Commission, based on the data transmitted by the EU Member States. How many suspected IPR infringing goods were detained in compared to previous years? Customs interventions involving goods suspected of infringing IPR have almost doubled in. Almost 80,000 cases were recorded in, compared to 43,500 cases in This dramatic increase is due to the growing number of interceptions in postal traffic, which has significantly increased as a result of the growing number of online purchases in Europe.. However, in comparison to 2009, the number of goods detained has fallen from 118 million in 2009 to 103 million in. What is the difference between cases and articles? A case represents an interception by customs. Each case contains a certain amount of individual articles that can vary from 1 to several million and can contain articles of different categories. Number of registered cases

2 Number of cases Millions Number of detained articles Number of articles Which are the most frequently detained articles? In terms of number of articles detained, tobacco products come first (almost 43 million pieces, i.e. 34% of all articles), followed by office stationery (8 million, i.e. 16%), other tobacco products (8%), labels, tags and emblems (8%), clothing (7%) and toys (7%). 2

3 Top categories according to articles Cigarettes Office stationery 28,77% 33,30% Other tobacco products Labels, tags, stickers 4,73% Clothing 7,00% 7,47% 9,06% 9,67% Toys Others Clothing is the category of products for which most customs interventions took place (26%) in, followed by shoes (19%) and electrical equipment (13%). Top categories according to cases Clothing 24,88% 26,31% Other shoes Other electrical equipment Watches 4,51% 5,03% 5,94% 19,68% Bags, wallets, purses Sport shoes 13,65% Others What types of medicines have been detained? The most popular counterfeited medicines (99%) are life-style medicines such as diet pills or Viagra. However, medicines such as antibiotics, antidepressants, anti- 3

4 allergics, anti-anxieties, treatment of cancer or medicines that provoke abortion are also intercepted by customs. Where did the suspected IPR infringing goods come from? In, 85% of the total amount of articles infringing IPR came from China. This represents an important increase compared to 2009 (64%). Other countries were the main source of provenance for different product categories, notably Turkey for foodstuff, Thailand for non-alcoholic beverages, Hong Kong for memory cards and India for medicines. Countries of provenance according to articles Turkey 1,44% Moldova 2,06% Hong Kong 2,95% India 3,48% Greece 0,91% United Arab Emirates 0,66% Others 3,22% China 84,92% Which means of transport are most used to import suspected counterfeit goods into the EU? Detention of goods via postal traffic has increased by 82% in compared to Cases concerned mainly clothing, shoes and electrical goods. Almost 62% of cases account for goods detained via postal traffic, followed by 23% of cases by air transport and 7% of cases by road transport. Medicines account for almost 69% of the number of articles detained in postal traffic. Regarding the articles detained, the overwhelming majority is transported by sea (82%) and road (almost 8%). 4

5 Registered cases by means of transport air express post rail road sea Number of articles in % in postal traffic 3,89% 3,22% 3,15% 3,39% 3,49% 68,52% Medicines Perfumes and cosmetics Jewellery Body care items Other shoes Clothing Why have of the number of interventions against goods suspected of infringing IPR increased so much in? The increase mainly results from sales via the internet. This increasingly popular method of purchasing is simple and convenient for consumers. It has opened up a new channel of distribution for all types of IPR infringing goods, which may be of poor quality or even dangerous for the health and security of consumers. Why has the number of articles detained in decreased? 5

6 Despite the increase in postal traffic the packages detained were mainly small and usually limited to one article.. In addition, the decrease in detentions in sea traffic has also led to a reduction in the overall quantities of articles detained. Why is it important that Customs enforce IPR effectively? As the EU s 2020 Strategy underlines, the protection of IPR is key to the EU economy. By giving people the incentive to be creative and innovative, IPR promote growth in the European economy, creating and protecting millions of jobs. It is also of the utmost importance that the EU strengthens the ability of customs to fight against counterfeit goods that could be potentially dangerous for consumers, such as toothpastes, body care articles, foodstuffs and electrical products. Customs is ideally placed to enforce trade rights between the EU and third countries. To put this into context, the Customs 2013 programme which has a budget of 324 million over , enables the Customs Union to function seamlessly as one, instead of a patchwork of 27 national administrations. It allows national administrations to handle 7 customs declarations every second, totalling 211 million a year, without hampering imports to or exports from the EU. It also allows the exchange of over one billion information messages every year between tax and customs administrations via IT systems. This information exchange has increased by 40% in the last five years. Finally, the Programme ensures that around 10 million trucks carrying goods from third countries can circulate in the EU territory annually with real-time customs control (from departure to arrival and clearance) via 47 million electronic information exchanges. Is the detention of IPR infringing goods only a matter for customs authorities? National customs administrations are the key controlling bodies at the external frontiers of the EU. However, co-operation with other enforcement authorities, and third actors, such as the right holders, also needs to be improved to keep the problem of IPR infringements under control. In most Member States, law enforcement authorities other than Customs are also responsible for controlling IPR infringing goods within their territories, for example at open markets or where production of such goods is discovered on their territory. How effective is the cooperation with the industry? As the quality of IPR infringing goods has substantially improved and more and more highly technical goods are involved, customs have found it increasingly difficult to distinguish genuine products from the infringing products. Input from industry is therefore indispensable. The identification and grounds for suspicion of an infringement relies on the information provided by industry (such as the type of IPR infringing goods, information on production and means of transport, physical characteristics of original goods, etc.). The European Commission, in collaboration with Member States has established a manual for right holders for lodging and processing applications for action. When right holders suspect that their rights are being infringed, they may lodge an application, requesting customs to take action. How many applications were made by the industry in compared to previous years? 6

7 The growing involvement of industry is measured through the increasing number of applications for action made in the Member States. In, right holders lodged over applications for action to Customs administrations. This corresponds to 95 % of all related customs interventions. Year Applications What happens to goods once they are detained by customs? In 90% of all cases the detained articles were either destroyed or were subject to a court case to determine the infringement. Only 7% were released because they did not infringe an IPR or no action was undertaken by right holders after the detention. What is done to ensure customs cooperation with third countries? In addition to EU controls at import, it is necessary to act at the source of the problem by stopping the export of IPR infringing goods and, where possible, by shutting down the production. This requires international cooperation. In particular, an agreement was reached with China in 2009, to develop a customs action plan on IPR enforcement (IP/09/193). The plan concentrates on 4 key areas, namely the exchange of statistical information, the creation of a network of customs experts in key-ports, the enhancement of cooperation with other enforcement administrations and development of partnerships with business communities. The plan was extended in December 2009 until the end of 2012 (IP/10/1079). In which Member States did Customs detain the most infringing goods? 10 Member states account for 85% of the overall amount of cases and 92% of the overall amount of articles. Bulgaria, Italy, Portugal, The Netherlands, The United Kingdom and Spain are in the top 10 for both cases and articles intercepted by customs. 7

8 30,00% 25,00% 20,00% Member States percentage cases/articles Cases Articles 15,00% 10,00% 5,00% 0,00% United K ingdom Slovakia Slovenia Sweden Rom ania Portugal Poland N etherlands M alta Latvia Luxem burg Lithuania Italy Ireland Hungary France Finland Spain Greece Estonia Denm ark Germ any Czech Republic Cyprus Bulgaria Belgium Austria What is done to improve the current regulation on IPR enforcement in the EU? The current EU rules on IPR enforcement date from The Commission extensively reviewed these rules with the aim to propose a new regulation that strengthens provisions concerning customs enforcement of IPR, whilst at the same time ensuring appropriate legal clarity of the provisions themselves. This review was done in cooperation with Member States and the Commission launched a public consultation on the topic which ended on 7 June. On the basis of these discussions and contributions, the Commission adopted a proposal for a new regulation on customs enforcement of IPR on 24 May 2011, as part of a comprehensive package of IPR measures (see IP 11/630, MEMO 11/327). 8