21 Counterfeiting and piracy
| (26915)
12369/05
COM(05) 479
| Commission Communication: A Customs response to latest trends in counterfeiting and piracy
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| Legal base | — |
| Document originated | 11 October 2005
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| Deposited in Parliament | 17 October 2005
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| Department | Revenue and Customs
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| Basis of consideration | EM of 28 October 2005
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| Previous Committee Report | None
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| To be discussed in Council | Not known
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
21.1 Customs matters are within the exclusive competence of the
Community.
The document
21.2 The Commission introduces its Communication by saying "The
health and safety of EU citizens, their jobs, Community competitiveness,
trade and investment in research and innovation are all under
increasing threat from the industrialised production of fakes".
It continues that the growth in counterfeiting and piracy traffic
is evidenced by the 1,000% increase in seizures made by Community
Customs Authorities between 1998 and 2004. In addition to the
impact on jobs, health, safety and competitiveness, much of this
traffic is sold on the black market leading to major losses in
tax revenues. The fake industry also leads to unlawful employment
and is reported to have links to illegal immigration and to trans-national
organised crime. The Commission says also that one of the most
alarming developments is the increased risk faced by citizens
as a result of the growth in dangerous fake goods such as medicines,
car parts and foodstuffs. The Commission asserts that to reduce
the global trade in counterfeit and pirated goods and to combat
the trans-national networks involved in this illegal trade counter-measures
are required at the national, Community and international levels.
21.3 In the second part of the Communication the
Commission assesses the growing problem and an annex contains
a comparative summary of figures for recent years. In notes quantitative
changes such as from 2003 to 2004 a doubling to 22,000 of customs
cases involving fakes or the increasing problems of the need for
environmentally-friendly destruction of seized goods. It also
discusses qualitative changes such as most products now are household
items rather than luxury goods, production on an industrialised
scale and an increasing difficulty in distinguishing high quality
fakes from the real thing. The reasons the Commission cites for
the large increase in the trade in fakes are:
- the high profits and comparatively
low risks, particularly penalties — for instance profits
are higher on fake DVDs than on the equivalent weight of soft
drugs, whilst penalties are much lower;
- increasingly sophisticated industrial production
capacity, notably in China; and
- growing interest of organised crime in taking
a share of the high profits available.
Amongst new threats the Commission identifies are
public health and security risks and an increasing problem with
internet sales.
21.4 In the third section of the Communication the
Commission proposes an action plan for a Customs response to the
increasing problem, noting that about 70% of seizures of fake
products made globally are by Customs authorities and that they
are the only enforcement agencies assigned a specific mission
under the World Trade Organisation's Trade Related Intellectual
Property Rights Agreement (TRIPS Agreement). The Commission suggests
a more far-reaching and comprehensive approach, particularly looking
beyond seizures towards investigations to cut off production,
distribution and sale of counterfeit items. It proposes actions
in three areas:
- increasing Community level
protection;
- improving the Customs-business partnership; and
- reinforcing international co-operation.
21.5 On the level of protection at Community level
the Commission suggests that present legislation needs continuous
updating to counter new problem. It also suggests that operational
performance could be improved by:
- a more effective use of risk
management and completion and distribution of a Customs anti-counterfeiting
risk management guide;
- establishing a task force of Customs experts
to improve anti-counterfeiting controls;
- joint operational controls to target high-risk
goods or countries of origin for a set period;
- more use of Customs-business seminars to enhance
cooperation between Customs and those business sectors that are
seriously at risk from faking;
- use of Customs laboratories to analyse unsafe
counterfeit products; and
- maximising use of the Customs Information System
to exchange information and provide requests for action against
fake goods.
21.6 On improving the Customs-business partnership
the Commission recognises that Customs needs business co-operation
to take action against fake goods and recommends a number of actions
including that:
- European businesses provide
Customs Administrations with more support and information; and
- Intellectual Property Right holders be encouraged
to adopt a more pro-active approach to protecting their rights
with Customs by extending the use of Memoranda of Understanding,
improving the list of expert business contacts available to Customs
officials and by right holders ensuring that they have a registration
for Customs action against counterfeit products lodged in each
Member State.
21.7 At the international level the Commission suggests
an increase in cooperation between the itself, the World Customs
Organisation, Europol and Interpol to prevent the production and
subsequent export of fake goods from source countries.
The Government's view
21.8 The Paymaster General (Dawn Primarolo) says
that the Communication is very much in line with Government thinking
to tighten even further Community frontier controls to detect
fake goods. It particularly supports the emphasis on addressing
counterfeit goods that pose a health and safety threat to the
general public, such as pharmaceutical products, foodstuffs and
children's toys. She says other Member States also appear supportive
of the Commission's recommendations.
21.9 The Minister adds that the Government, as Presidency,
has worked closely with the Commission during the preparation
of the Communication and has been developing, in consultation
with other Member States a more detailed Action Plan based upon
the actions proposed in the document.
21.10 Finally, the Minister tells us that funding
for a number of the actions contained in the Communication and
to be reflected in the Action Plan would come from the Customs
2007 programme.[49]
Conclusion
21.11 The trade in counterfeit or pirated products
is an increasingly serious issue and we note the Commission's
efforts to promote practical remedies. We clear the document.
49 The Community's Customs 2007 programme is intended
to improve cooperation between Community customs authorities so
as to guarantee effective functioning of the internal market in
the matter of customs. Activities under the programme include
IT development, sharing of equipment between Member States, developing
common training tools and ensuring the security of the external
border of the Community's customs territory as well as tackling
counterfeiting and piracy. Back
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