Customs may again fine importers/exporters infringing IP rights

New regulations giving back the customs authorities' right to levy fines on importers and exporters that infringe IP rights have come into force. This right existed under the Regulations on Customs' Protection of Intellectual Property Rights 1995, but had been removed by the amended version of the regulations that came into force in March 2004 (see China enacts new regulations on customs protection of IP rights).

Under the new Implementing Regulations on Customs Administrative Punishment, which came into force on November 1 2004, customs can levy a fine of up to 30% of the value of the infringing goods. For serious cases, criminal action can be instituted. The amendment has no retrospective effect (ie, if the seizure took place during the period of March to November 2004, customs cannot levy a fine).

The new regulations also provide that customs may request the consignor of goods imported into or exported from China, the consignee of these goods and/or their agents to provide evidence of authorized and legal use of the IP right applicable to the goods at issue. Failure to do so will make the trader liable to a fine of up to Rmb50,000 (about $6,000).

Andrea Fong and Cyril Yeung, Wilkinson & Grist, Hong Kong