Minutes - TRIPS Council - View details of the intervention/statement

Mr. Tony Miller (Hong Kong, China)
262. Article 7 of the General Administration of Customs Notice No. 742 of 1998 had stipulated that, once the People's Procuratorate thought that there was enough evidence for a suspicion of smuggling and cases should be heard by the lowest level People's Court, the People's Porcuratorate could sue the case at the local intermediate People's Court according to Article 23 of the Law of Criminal Procedure. This meant that it was the intermediate People's Court that would hear part of the IPR criminal cases concerning accusations of smuggling. Investigations conducted last year by the concerned bodies of the Supreme People's Court had shed some light on this issue. However, given the complexity of responsibilities within different authorities, the issue whether the hearing level of IPR criminal cases should be adjusted, required more research. 263. Turning to customs border enforcement, he said that at present, measures taken by the General Administration of Customs to protect IPR included establishing more laws and regulations on IPR protection, training more enforcers of GCA, strengthening cooperation with right holders, participating more in cooperation and communication with foreign counterparts, and employing more advanced technology to find more pirated products. All these measures had proven effective to prohibit exportation and importation of pirated goods. 264. According to old regulations, once the consigner or the consignee of the goods apply to the Customs for dissension on their goods that are suspected of piracy, the Customs could no longer conduct an investigation on whether the product was pirated or not. However, a new regulation stipulated that, in response to an application from right holders, once the Customs had found products suspected of piracy, the goods would be detained by the Customs, no matter whether the consigner or the consignee filed to the Customs for dissension. The Customs could conduct investigations on whether the goods were pirated or not. Therefore, the enforcement by the Customs was strengthened while efficiency of enforcement was improved. 265. In a passive protection mode, right holders would have to pay a deposit equivalent to the worth of the products, but in an initiative protection mode by the Customs of China, the Implementing Rules of GCA stipulated, firstly, that deposit equivalent to the worth of the goods had to be paid if the goods were worth less then 20,000 RMB; secondly, that a deposit equivalent to half of the worth of the goods had to be paid if the goods were worth between 20,000 and 200,000 RMB, with the deposit being no less then 20,000 RMB; thirdly, that a deposit of 100,000 RMB had to be paid if the goods were worth more then 200,000 RMB. In either mode, right holders could choose to pay the deposit in cash or to show the Customs the insurance letter provided by a bank or a financial organization other than a bank. 266. According to the law, only the consigner or the consignee of the imported or the exported goods were subject to Customs administration. Therefore, the Customs could not extend its jurisdiction to other companies involved in piracy. However, in real practice, Customs would provide the information on the detained goods to the right holder and concerned authorities of the administrative enforcement. The right holder and the concerned authorities of the administrative enforcement could exercise punishment on the companies involved in piracy on the basis of the information provided by the Customs. From 2001 to 2003, there had been altogether 5,000 cases where the Chinese Customs had exercised protection measures, while in 1,700 of these cases pirated products had been found. The value of the confiscated products had been 198m RMB. 267. Customs enforcement was categorized as administrative enforcement. The products had already been deemed by the Customs as pirated and the Customs would exercise administrative punishment to the violator, including confiscating goods and forfeiture. Since 1996, there had been 5,800 cases where the Customs had exercised administrative punishment to violators. Therefore, it was unnecessary for the Customs to file an administrative lawsuit in IPR cases. As for civil lawsuits, it had to be filed by the right holder to the court. In criminal lawsuits, as there had not been clear prescriptions on criminal obligations for piracy in exportation and importation, neither were there any judicial interpretations, the Customs so far had not transferred the cases for criminal obligations. 268. In recent years, cooperation in IPR enforcement between the Chinese Customs and the international community had been strengthened. Statistics showed that, since 2000, by joint enforcement with the Customs of Hong Kong, China, the Chinese Customs had dealt with more than 200 IPR cases where the information had been provided by the Asean-Pacific RILO of the WCO. 269. Regarding the cost burden for right holders for infringing products that had been stopped at the border, he said that it was in conformity with the present situation in China to let the right holder pay the storage fee and the Chinese Customs had realized that this practice was impeding IPR protection. However, it had to be admitted that it was unaffordable for the government to solve this problem. Therefore, with the right holder undertaking part of the financial burden of the counterfeiting actions, the enforcement by competent authorities was facilitated in a sense. The new regulation and its implementation stipulated clearly the investigating period and the period to deal with examining the product. According to this regulation, the pendency of customs clearance would not be long. Therefore, the storage fee for products would be reduced shortly and finally right holders would undertake the charges concerned. Pursuant to the new regulation, once the suspected goods were determined as piracy, IPR right holders could take the storage fee and concerned charges as part of the fees to stop piracy which the right holder could request the violator to compensate for. Therefore, the right holder only paid the deposit temporarily and could be compensated by way of repayment from the violator. 270. Regarding confiscated goods, he said that if these were all to be destroyed, it would cause not only waste of natural resources but also environmental pollution. Therefore, the Customs would sell such products that could be reutilized at auction to make full use them. Meanwhile, pirated indicators on a product would be erased to protect the interests of the right holder. So far, the implementation of the regulation was satisfactory so that no revision to the regulation would be made.