Customs simplified procedure to be fully implemented

United Kingdom
The UK government is introducing new subsidiary legislation to make it easier for Customs to destroy counterfeit and pirated goods which it has seized.
 
The need for the new legislation became apparent when a Northern Irish court held that Customs’ previous practice did not comply with the provisions of the EU Customs Regulation (1383/2003). That judgment led to a change in practice by Customs, which in turn led to owners of IP rights having to take costly action to ensure that the goods were destroyed.
 
To overcome this difficulty, the UK government is introducing a new statutory instrument, expected to come into force on March 10 2010. The amendments fully adopt Article 11 of the regulation (the simplified procedure). Crucially, Customs will be able to treat goods seized as abandoned and will be able to dispose of them, if they are satisfied that the declarant, holder or owner of the goods has impliedly consented to their destruction.
 
For many years, UK Customs dealt with shipments of suspected infringing goods in a simple manner. Rights holders would be informed of a suspect consignment and would have a period of up to 20 days to inform Customs that the goods were infringing. Customs would then inform the declarant, holder or owner of the goods and would destroy them, unless an objection was received. Any such objection would result in Customs bringing 'condemnation proceedings' in the Magistrates Court.
 
This was a highly favourable procedure to rights holders, whose involvement - and therefore cost - was limited to simply identifying the goods as infringing. However, following last year’s Northern Irish judgment, temporary and informal amendments to procedure were announced by Customs.
 
Under these, rights holders had to:
  • confirm that the goods infringed an IP right; and
  • obtain the written consent of the declarant, holder or owner of the goods to their abandonment and disposal.
Failing this, the rights holder had to issue proceedings to determine infringement or allow the release of the consignment, all within the 20-day period. These hurdles meant that, in practice, many small consignments of counterfeits were released.
 
The new statutory instrument, SI 324/2010 The Goods Infringing Intellectual Property Rights (Customs) (Amendment) Regulations 2010, fully implements the simplified procedure allowed by Article 11 of the EU regulation. As is currently the case, Customs will have no option but to release the goods unless proceedings are started, or the declarant, holder or owner agrees to destruction of the goods within the 20-day period.
 
Crucially, however, Customs will now be able to assume that if the declarant, holder or owner fails to respond to requests to abandon the goods and allow them to be destroyed, it has impliedly consented to their destruction. Thus, rights holders will no longer face situations where their only alternatives are to go to the expense of issuing proceedings or simply to allow the infringing goods to enter.
 
However, rights holders must bear the expense and responsibility for the destruction of the goods, unless otherwise specified by Customs. While complying with the EU regulation, this remains a contentious issue and is currently being debated with the European Commission, which is considering amendments to the regulation.
 
This change brings the United Kingdom into line with most other EU member states and will be welcomed by rights holders. It should mean that many UK Customs matters under the regulation will now be concluded more effectively and at lower cost to rights holders.
 
A detailed guidance note is still awaited. It is hoped that it will clarify what rights holders need to do to satisfy Customs that the declarant, holder or owner of the goods has been offered the opportunity to abandon the goods, as the wording of the statutory instrument is ambiguous.
 
Stuart Adams, Rouse, London

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