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Algirdas Šemeta

EU Commissioner for Taxation and Customs Union, Audit and Anti-Fraud

"Customs enforces Intellectual Property Rights to protect consumers and businesses in Europe"

Press Conference on the Annual Report on EU customs enforcement of intellectual property rights, 14 July 2011

Brussels, 14 July 2011

Intellectual property rights or IPR represent core assets for citizens and companies. A strong level of protection is therefore fundamental. Effective enforcement of goods in trade is a critical component for a strong system of IPR.

A lot of attention is given to the value of intellectual property. Fraudsters find ever more creative ways to exploit other people’s creativity. Enforcement authorities try to maintain the law. Governments are seriously concerned about the negative impact of IPR infringements on innovation on new jobs and on society as a whole. Consumers are also becoming increasingly aware when they knowingly or otherwise buy fake goods, which are below all standards, that they have no guarantees when something goes wrong.

I am here to report on how customs are facing up to this phenomenon. In between supply and demand, customs are uniquely placed to tackle the trade between manufacturers and the market place. In the EU, the number of cases treated by customs has steadily increased over the last 10 years. Customs data provide solid evidence that the growing trade of IPR infringing goods is a menace to our society.

The latest figures show an unprecedented increase. Nearly 80,000 cases were recorded last year, compared to 43,000 in 2009. This clearly shows that customs are committed to maintaining high levels of enforcement at the border. The Commission is also committed to further improve the legal and operational rules. After reviewing the existing legislation, I presented a proposal for new customs rules on 24 May as part of our comprehensive package on IPR in the Single Market.

In parallel, a number of initiatives have been developed and these are summarised in the report. By providing a strong legal framework and the right tools, I believe customs administrations in the EU will continue to lead on enforcement.

I have already mentioned the dramatic increase in the number of customs interventions relating to IPR. In terms of goods, over 100 million articles were stopped by customs. This is less than in 2009 – but unfortunately it doesn't mean that the problem is going away. The goods are entering the EU in smaller packages but in bigger numbers, which gives an additional workload for customs.

Almost 50,000 cases were postal packages. This figure is higher than the total amount of cases from all forms of transport in 2009. This is linked to the development of e-commerce. The internet is a virtual market place offering all kinds of goods, many of which are genuine. By simply clicking on the order button, consumers have goods delivered to their front door. The growth in on-line sales has incidentally opened up a new method of distribution for all kinds of IPR infringing goods – especially fakes. Such goods may be of poor quality or even dangerous. This is a major challenge for customs. With little information, the shipments are difficult to identify and more administrative burden is created every time a package is found, regardless whether it contains just one or two items or many more.

Customs detain all sorts of goods. For 2010, the top category is cigarettes, accounting for 34% of the overall amount. Clothing and toys also feature at the top. Most infringements identified by customs involved trademarks, though some detentions were made involving other rights such as patents and geographical indications. This confirms the usefulness of providing customs with the necessary legal base to enforce a wide range of rights at the border.

Overall, China continues to be the main source country for IPR infringing goods. In terms of articles, 85% of the total came from China. However, in certain product categories, Turkey, Hong Kong and India were the main source countries. The protection of IPR remains a key challenge in the EU's relations with China. We are actively engaged with the Chinese customs authorities to combat this illegal trade, through the framework of a dedicated customs action plan. In 2010, I signed an extension to this plan, which will now run until the end of 2012.

The principle role of customs in the area of IPR enforcement is to identify and detain suspect shipments. Interestingly, customs also report on the outcome of their interventions. In some cases goods were released after being detained because they subsequently appeared to be original goods. However, in over 90% of the interventions, the goods were destroyed or a court case was started.

In 2010, customs recorded the estimated value of the equivalent genuine products, in total over 1 billion euro. It is the first time that we have an indication of the value of goods detained by customs. It provides a new indicator of the scale of the phenomenon

The concrete results achieved by customs underline their valuable contribution in the fight against IPR infringing goods. They need to have the right tools to enforce IPR effectively at the border. The Commission will continue to support and coordinate their efforts by targeting the source, the supply and the demand for these goods.

Today's report gives you insight and concrete evidence of the scope and nature of the challenges in fighting IPR infringements at the border. Only through continued support and priority to a range of initiatives will we be able to counter the negative impact of IPR infringing goods on society.

Customs cannot act alone. More collaboration between enforcement authorities is needed, and so is enhanced consumer awareness . Counterfeit products do not respect any standards. They may be of poor quality or even dangerous, yet in many cases the buyer is not aware that the goods are not genuine. Unless consumers face up to the negative consequences, counterfeit and pirated products will continue to be manufactured and offered for sale. Everybody –from government to industry to public opinion –has a role to play in raising public awareness.

I invite you to study the report and the samples on display here today. Thank you for your attention, Commission services are available to answer technical questions.

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