WIPO NATIONAL WORKSHOP ON ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS (IPRs) FOR CUSTOMS OFFICIALS

Transcription

1 , WIPO/IPR/THR/01/5 ORIGINAL: English DATE: April2001 E ~ e ISLAMIC REPUBLIC OF IRAN CUSTOMS ADMINISTRATION WORLD INTELLECTUAL PROPERTY ORGANIZATION WIPO NATIONAL WORKSHOP ON ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS (IPRs) FOR CUSTOMS OFFICIALS organized by the World Intellectual Property Organization (WIPO) in cooperation with the Islamic Republic of Iran Customs Administration Tehran, April 24 to 26, 2001 THE ROLE OF CUSTOMS AUTHORITIES IN PREVENTING THE IMPORT AND EXPORT OF COUNTERFEIT AND PIRATED GOODS Documentprepared by Mr. Hassan Baage, Technical Officer, World Customs Organization (WCO), Brussels n:\orgaspa\shared\hossein\iranmtgsol \inf docs\doc5 bb.doc

2 WIPO/IPRlTHRlO1l5 page 2 BACKGROUND Traditionally, Customs Administrations have been responsible for two distinct areas of work. Collectionof Revenue at borders, linked in many countries with the collectionof Excise taxes at inland locations, forms the first major aspect oftheir work. The second, equally important responsibility, which at first sight might appear to conflict with the revenue collection role, relates to the Protection ofsociety. Customs, situated as they are at land, sea and air frontiers, are the obvious choice as the main Government agency to protect the external frontiers. A broad range ofborder-related offences confront the Customs Officer. Such offences include the trafficking of, illicit drugs, endangered species, nuclear and hazardous goods and goods which are being imported, transited, or exported, whilst contravening Intellectual Property Rights (IPR) legislation. The public perception ofipr offences is limited to fake T shirts, watches and perfume, and whilst these contraventions can be extremely damaging to individual companies and in turn national economies, the actual range ofproducts being counterfeited is extensive and poses in many instances a serioushealth and safety risk to the public. Past cases include pharmaceutical products and prescription drugs, which have been manufactured with substandard constituents, unsafe car parts, reverse engineered aircraft spares, and computer processors where the operating speed has been artificially increased making the product more likely to break down under pressure. The last example is a graphic reminderofjust how dangerous counterfeiting can be to society, especially ifthe fake computer part is installed as a key control component in a transatlantic jet aircraft. A great potential exists for Customs to play an important and legitimate role in protecting society against intellectual property rights violations. The loss ofrevenue to legitimate businesses and therefore economies on the one hand, linked with the need to protect the public from dangerous and hazardous goods on the other, is a worthwhile and beneficial function. FACILITATING INTERNATIONAL TRADE WHILST PROTECTING THE BORDER Facilitating International Trade whilst protecting the border is potentially a difficult role, especially since neighboring countries are often the most important trading partners and it is therefore important to actively facilitate legitimate cross-border trade, whilst trying to deal with a whole series ofborder protection issues. In many ways the border location represents a series ofchallenges and opportunities to Governments. Since international trade is so important to national economies generally, it is important for Customs to respond positively to the legitimate needs ofbusiness. Successful international trade relies upon: efficient movement oflegitimate goods, leading to more assured transit and delivery times, better business planning and ultimately increased profitability. Against this background Customs' must also assert its own needs in fulfilling the role in Protecting Society. In today's world, goods are moved on a "just in time" basis, through borders where simplified import procedures have been introduced, where there is much less documentation for Customs to rely upon and more business computerization to deal with. In this changing environment Customs urgently need access to relevant commercial information and intelligence, especially trade related information in order to be effective and efficient in the future.

3 WIPO/IPRlTHRlO1l5 page 3 In 1991 the G7 Group ofnations identified these complementary needs, and recommended that the World Customs Organization should develop an Action Planto strengthen co-operationbetween carriers and the enforcement authorities. The recommendation led directly to the WCO "ACTIONIDEFIS" program (Alliance ofcustoms and Trade for the Interdiction ofnarcotics) a Customs/Trade partnership which aimed initially at the interdictionof illicit narcotic drugs, but which has been gradually extended to embrace other forms ofborder related crime, including IPR violations. Under this program, WCO has negotiated 24 Memoranda ofunderstanding between the World Customs Organization and international trade associations. These framework documents describe a Customs/Business partnership, which provide a crucial opening for member countries in their dealings with traders and trade bodies. Similarpartnerships have now been replicated in over 30 member countries throughout the world and several thousand MOUs, tailored to specific national and regional needs have been initiated. Important Memoranda, dealing specifically with IPR issues, have been concludedbetween the WCO and the International Federation ofphonographic Institute (lfpi) in 1988, the umbrella organization ofthe mechanical copyright organizations (BIEM) in 1997 and the Motion Picture Association (MPA) in This new approach has caused a sea change in attitude between Customs and business, particularly the common work area ofthe transport trade and has greatly helped Customs to improve their efficiencythrough access to real-time commercial data and sensitive trade information needed for identification of counterfeit goods. For its part the legitimate trade benefits greatly by having a partner Customs administration with a better understanding of their business needs and better opportunities to facilitate their business throughput. It is also encouraging to see these internationally devised schemes taking root at local level, in helping to improve the daily lives of Customs and business at the frontier. PLANNING AT THE INTERNATIONAL LEVEL AGAINST TRANSNATIONAL ORGANIZED CRIME (TOe) Trade partnership at international, national and local level As international trade has burgeoned over the past decade, so have the range of crossborder crimes. Transnational Organized Crime is reported as a growing phenomenon by a whole range ofinternational committees and meetings. The influence of Organized Criminal Groups in counterfeiting makes the Customs' role in protecting the frontier even more important. Such groups have in the past profited from the substantial and reliable income provided by counterfeit goods, compared to the low overhead costs involved in illegal back street manufacturing facilities that they tend to use. Without a concerted effort from Law Enforcement agencies and business, organized criminal organizations can flourish without challenge. Police have a crucial role to play here in helping to identify the active criminal groups. Customs control and enforcement services also have the potential to make an important and unique contribution to the overall effort, by working in partnership with Police and other agencies against Transnational crime. Over many years, Customs have developed a key competence and knowledge concerning the movement ofgoods and people across the border, one ofthe most fundamental aspects of TOC. Their role however, potentially, goes far beyond this limited horizon, since they also act as a vital bridgebetween Government policy and international trade practice.

4 WIPO/IPRlTHRIO lis page 4 Co-operation at the international level is vital and one ofthe most important objectives in the WCO strategic plan is in building and maintaining co-operation between WCO and ICPO-INTERPOL. We fully recognize and appreciate the role that INTERPOL plays in coordinating international Police activity and by gradually increasing the dialogue, cooperation and contributions to each other's activities, we are building a valuable partnership, which is fundamental to the fight against international crime. These increased levels ofco-operation have led to the signing, in November 1998, ofa Memorandum of Understanding between the two organizations. In addition to this MOU providing a framework for future international co-operation, we believe that it has the potential to act as a catalyst for similar co-operation and partnership at the regional, national and local level. This approach is already operating in many countries, but we need to develop the idea further in developing countries, and those going through transition. Many advances in IPR enforcement could then be realized. With Police criminal intelligence combined with the Customs and business contribution, a more comprehensive enforcement approach could be established in order to combat the most damaging forms of international IPR organized crime. THE AGREEMENT ON TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS) As part of the negotiations and convention which established the World Trade Organization, The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) was concluded on 15 th April Section 4 ofthis world agreement contains 10 articles (51 to 60), for the first time recognizes the full extent ofthe Customs' contribution in protecting society against IPR violations. This section of the agreement introduces the concept of"special Requirements Relating to Border Measures" and these measures become requirements for Governments to introduce at the time they accede to the WTO convention. Most developed countries implemented the necessary changes within 12 months, but developing counties were allowed a five year period, leading up to the year 2000, in which to develop their strategies and organizational plans. In the next eight months therefore, many WCO Member Administrations, will be finalizing their arrangements in order to fully implement the various Customs related aspects of the WTO convention, including TRIPS. These ten Articles form only a part oftrips; the other parts deal with general provisions, administrative matters, legal proceedings and other enforcement issues. Yet, most IPR experts would agree that effective border enforcement is one of the most important practical aspects oftrips. Enforcement at the border can not only be effective in capturing vast quantities ofcounterfeit goods in bulk shipments, but it can act as a key intelligence function for Governments and international business. "Risk Testing" and using commercial and other intelligence at the frontier can gain a great deal of valuable knowledge about IPR violations. Such trend information is a critical factor in business marketing and planning strategies and has equal potential for Governments in helping to inform trade policy decisions. Of course, all of this requires an efficient enforcement and communications platform on which to operate and a dynamic partnership at the international level betweenthe key agencies, WIPO, WTO, WCO, ICPO and business.

5 WIPO/IPRJTHRJO 115 page 5 THE WCO IPR PROGRAM With these trends and conditions in mind, and realizing the critical value oftrips, the WCO program has been developed as a joint venture with international business. This partnership approach has been endorsed by the WCO Council, which brings together the Heads of Customs Administrations from all over the world and takes effect through the Enforcement Committee and an IPR Working Group. This group of Customs and business participants has energetically developed a strong working relationship, which benefits from the combined and complementary skills of Customs and business. A high degree ofsynergy and innovation results from this partnership, as crucial commercial information and a business dimension is combined with Customs information and key enforcement techniques. The basic WCO philosophy is to help Member Administrations to improve their efficiency and effectiveness in all aspects oftheir work. Through the IPR Working Group, Member Administrations are facilitated and assisted at their own pace, so that they can develop their own improvement plans. Business partners fully support this approach and fully fund the program, which is delivered through two functional areas, Training and Promotion and Publicity. Training priorities are determined through a training Sub-Group, again made up of Customs and business participants. Regional and National training seminars have been carried out in many countries ofthe world. Training projects for 1999 include regional training in South Africa, and a four stage practical exercise in Eastern Europe, followed by a Road Show. WCO also contributes strongly to the training initiatives delivered by WIPO and we are discussing with the EC PHARE I TACIS and APEC Intellectual Property Rights program managers how to combine forces in the future, so that valuable training effort is not wasted. The WCO IPR Promotion and Publicity Sub Group has developed a whole range of products which help Customs to understand and improve their IPR Enforcement. MODEL LEGISLATION A WCO IPR Model Legislation has been developed to help countries in drafting, or revising their existing Customs legislation. The model is based on TRIPS and includes provisions on: Applications for Customs Assistance The duration of Customs surveillance over suspected infringements The provision ofinformation, including evidence ofright ownership and the grounds for suspicion Indemnity and security Suspension of clearance and time period ofsuspension Notification to the right holder Examination ofthe goods by the right holder and the provision ofinformation Compensation in the case of wrongful detention ofgoods Ex-Officio Action; Customs working on their own initiative, without application Powers of suspension ofclearance and disposal ofcounterfeit goods

6 WIPO/IPRlTHRlO1l5 page 6 RAISING AWARENESS AND PROVIDING INFORMATION A video produced by Customs Audio-visual services but fully funded by business sponsors has also been produced in three languages, English, French and Spanish. A simple folder leaflet has been mass-produced to complement the video in raising awareness amongst Customs Staff. The WCO has also been developing its own INTERNET site at two levels, a general level access site for the general public and a private secure site for Customs personnel. Future plans involve the drafting of a Web form for companies to complete. This will contain details oftheir product range, proofoftheir IP right ownership and important counterfeit identification information. This information, which will include the vital information ingredients that should allow Customs staffto identify counterfeit products more easily, will be made widely accessible to front-line Customs personnel. Through this systemthey will also have ready access to the appropriate rights holder business, by the provision ofcontact point information. Plans are currently being drawn up to link the WCO IPR Web page to sites managed by: REACT, a system developed in the Netherlands where companies can input such information directly and a similar system being developed by IFPI for the music industry. Discussions have also commenced with US Customs to link their site to WCO in a similar fashion. All of this activity is aimed at giving the key Customs personnel better information in order to be more effective. Customs in many countries have not however fully developedtheir computer networks, and in order to provide a similar level ofinformation to officers in those countries the WCO Promotion and Publicity team is developing a single sheet A4 information card, which will contain all the key elements ofdata for products which are likely to be counterfeited. The WCO Central Intelligence System (CIS), based in Brussels and ten Regional Intelligence Offices (RILO), form an intelligence network, which is also a valuable mechanism for raising awareness and disseminating information on smuggling and fraud trends to Member countries. On a routine level, RILOs produce trend information, which helps to identify current risks in terms of counterfeit products, trafficking routes and other new information. Members can then use this information to adjust risk profiles and deployment ofresources. The RILO offices in Asia and Pacific (based in Japan) and Eastern Europe (based in Warsaw) are increasing their level ofactivity in IPR and the dissemination ofinformation. In 1998 for example, RILO Eastern Europe concluded a regional MOU with IFPI, to improve the exchange ofinformation between Customs and the music industry in that region. The CIS and RILO contact points are included in this report at Annex 2. PROVISION OF ASSISTANCE The WCO Secretariat and business partners are available to Customs Administrations seeking to improve their IPR enforcement arrangements. A number ofwco training programs can be helpful in this regard. The Customs Reform and Modernizationprogram has helped many Members to restructure and reorganize their administration. This can be linked to more specific Risk Assessment training, which helps Administrations to work based on

7 .~:> WIPO/IPRlTHRIO1/5 page 7 intelligence principles. Once this has been achieved, the WCO IPR Training program can assist Members to enhance their understanding and response to the problem of counterfeits. A number of training styles are being developed, including the traditional approach that includes a regional and/or national seminar, followed by the drafting of an Action Plan. In 1998 major seminars in Russia, where 100 delegates from 8 time zones across the country attended an event in Moscow, and Mexico city, took place. A similar event in South Africa is planned for this year, where a number ofcountries ofthe region will participate. These events are intended to be very practical and informal and are designed to raise awareness and commence the necessary enhancement of systems. Equally important is the opportunity to build a partnership between Customs and business on this topic within the country and to setup a system of contact points. A separate initiative is being made to develop a "Road-Show" style of awareness raising. This will be more simply designed than the traditional seminar and can be linked to one-off practical exercises and intelligence projects. PUTTING THIS INTO PRACTICE In practice, and bearing in mind that IPR is a relatively new field ofoperation for Customs, most WCO Members are starting to respond positively to IPR fraud. The rate of improvement varies considerably and the level ofpowers given to Customs also differs. The key elements for success are: 1. The appropriate legislation, including the powerto work Ex Officio (Optional under TRIPS, but if countries adopt an intelligence based approach, then the ability to work on initiative is very important) 2. Effective Systems, including a non-bureaucratic, low cost, application procedure. This will encourage businesses to lodge an application and provide information] 3. Access to information and intelligence. Most important ofall here is sensitive commercial information. 4. Effective Enforcement, which includes a whole range of issues, but crucially the ability to manage and use information and intelligence 5. Effective communication, within Customs, but also with other agencies, neighboring countries and with business. MODs and less formal arrangements can help here. Not all countries are succeeding at this level and there is a great deal ofwork still to do, but many Administrations are making headway. In the Russian Federation for example, as a result ofa new Government and Customs initiative and the WCO seminar held in Moscow in September 1998, a new legal framework is being presented to Parliament, business contact has been increased, awareness raised and the amount ofapplications from business radically increased. Other countries have more developed systems and are using their experience and intelligence methodology to target the problem. For example, Customs from the Netherlands, France, United Kingdom and USA have all provided assistance to other administrations in the WCO program.

8 WIPO/IPRlTHRIO 115 page 8 FUTURE PRIORITIES The WCO program will concentrate effort on the key elements described earlier. It will continue to raise awareness amongst Customs ofthe IPR problem, its damage to international trade and its links to organized crime. At a more advanced level it will aim to help Member countries develop organizational and technical improvements and solutions. A priority will be to bring about solid and long lasting change as a result oftraining activities. In this regard Action Plans and continuous support from the WCO I Business partnership will be linked to specific training events. Development ofinformation sources and Systems based on the Internet will be ofequal importance as will the use ofthe WCO RILO network to help disseminate key information and trends. Improving and maintaining co-operation at the international level between agencies and business will continue to be the most critical factor in dealing with the various violations ofintellectual Property Rights. The WCO is greatly encouraged by ICPO INTERPOL efforts to collate more information on this important subject and looks forward to future joint initiatives in IPR in the future. Annex1: A summary ofthe "articles" within TRIPS relevant to Customs: Section4: 'SpecialRequirements Relatedto Border Measures Article 51: Suspension ofrelease. A provision, which allows a right holder to lodge an application with Customs to suspend release of, suspected counterfeit goods.,.., '. Article 52: Application. Describes the conditions for making an application, Prima facie evidence of infringement and a "sufficiently detailed description" of the goods. Article 53: Security or EquivalentAssurance. Security to prevent abuse ofthe system Article 54: Notice ofsuspension. Prompt notification by Customs to the rights holder of suspension: Article 55: Duration ofsuspension. lo working days after the applicant has beenserved notice ofthe suspension; time period for Right Holder to commence legal proceedings. Article 56: Indemnification ofthe Importer and ofthe Owner ofthe Goods. The applicant is liableto-pay compensationto the importer, the consignee and owner compensationin the case ofwrongful detention. Article 57: RightofInspection and Information. The right holder is given sufficient information and the right to inspect detained goods, in order to substantiate the claim(s). Article 58:.Ex Officio Action. Optionalprovisio~, which allows Customstoactupqnjheir own initiative, without an application being required, in order to suspend clearance ofgoods: Article 59: Remedies. Destruction order for infringing goods. Re-exportation not allowed. Article 60: De Minimus Imports. Small "non-commercial" consignments may be excluded. [End ofdocument]

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