Challenges and Strategies of Customs Protection in Major Countries in Southeast Asia
At present, the main development trend of foreign trade in Southeast Asia is the increasing growth of “Chinese branded goods” and “Made in China goods”. According to customs statistics released by the State Council Information Office, ASEAN was still China’s second largest trading partner by the end of 2019. By the end of 2020, ASEAN has surpassed the EU for the first time and has risen to become China’s largest trading partner.
In Southeast Asian countries, the main challenge for customs protection is the proliferation of counterfeit goods. Among them, 75% of counterfeit products are imported from China, and only a small number of counterfeit products are produced, processed or repackaged locally. Singapore, the Philippines, Indonesia, Thailand and Vietnam are the countries that import the most counterfeit products.
Common counterfeit products on the market include clothing and footwear, leather goods, electronics, medical devices, watches, perfumes, toys, jewelry and pharmaceuticals. During the epidemic, the number of counterfeit products, especially health care products and medicines, has increased significantly, and online transactions have become more frequent, and counterfeiting and infringement against Chinese brands have become increasingly intensified.
Comparing the customs records and seizures of Southeast Asian countries from 2019 to 2020, it can be seen that Thailand has the highest number of customs seizures, with 900 cases seized and 1,073 batches seized. Vietnam came in second with 78 seizures (but no data on filing volumes was submitted). Indonesia (4 filings and 3 seizures), the Philippines (112 filings) and Singapore (no data yet) came in third.
Status Quo and Challenges of Customs Protection in Southeast Asian Countries
There are huge differences in the system construction, law enforcement practices and remedies of customs enforcement in various countries, which brings many challenges to obtaining comprehensive anti-counterfeiting protection in Southeast Asia. In Indonesia, only foreign rights holders with local registered legal persons or branches can file with customs, and the low customs filing rate and seizure probability exacerbate this problem (China Customs seized 61,900 batches in 2020, while the above mentioned The number of seizures in Thailand was only 1,073 batches).
As some customs do not have the authority to handle certain cases, they must be referred to the local courts of competent jurisdiction (the same is true in Singapore). In the Philippines, due to limited enforcement resources, customs rarely intercept counterfeit and infringing products during the import declaration process. In Vietnam, there is a big problem in the standardization of law enforcement, and the law enforcement standards and procedures at different ports are quite different.
Other common problems include high security, long closing period, high warehouse rent and high cost of rights protection. In addition, law enforcement officers have weak awareness of intellectual property protection, which may create obstacles in the enforcement process against counterfeit products.
Recently, the cases of successful seizure by Indonesian and Philippine customs are of great reference value. In October 2020, the Indonesian customs successfully seized the first imported foreign-related counterfeit registered trademark case, and seized 390,000 counterfeit “Gillette GILLETTE” brand razors and 521,280 blades imported from China. It can be seen that the number of counterfeit products is huge. Therefore, Indonesia’s P&G company is preparing to file a lawsuit in the Commercial Court.
In 2019, the Bureau of Customs of the Philippines, the Intellectual Property Office and the Armed Forces of the Philippines raided a warehouse in a shopping mall in Manila and seized smuggled and counterfeit luxury goods worth 70 million pesos (approximately RMB 9.03 million), including Louis Vuitton, Prada (Prada), Gucci (Gucci), Chanel (Chanel), Balenciaga (Balenciaga), etc. The Intellectual Property Office of the Philippines (IPOPHL) highly affirmed that the Philippine Customs seized and destroyed counterfeit goods with a market value of up to 500 million Philippine pesos (approximately RMB 6.49 million) during the COVID-19 outbreak in 2020, fulfilling its efforts to prevent counterfeit goods from flowing into the country. Promise of.
To sum up, in order to implement an effective customs protection strategy in Southeast Asian countries, merchants should pay attention to the following key points:
- When the infringement of counterfeit products is found, please file in time to actively protect the rights and interests;
- Participate in customs training and exchange and export Chinese experience;
- Hire a reliable local agency capable of coordinating law enforcement across regions;
- Make full use of the convenience and speed of customs enforcement complaints and flexible inspections to seize counterfeit and infringing products;
- Use customs seizures to obtain information, dig deep into the source of infringing products, and expand rights protection achievements;
- Efficient settlement: comprehensively evaluate the case, exert pressure on the infringer, reach a settlement at an appropriate time, force the importer to abandon the goods, and reduce the cost of rights protection;
- Actively strengthen communication with customs through government organizations and industry associations, and promote customs to improve law enforcement efficiency.
Challenges and responses to the administrative and judicial protection of major countries in Southeast Asia
Thailand is relatively leading in the field of intellectual property protection. After its accession to the WTO, it has strengthened the investment in the police force, assisted in active rights protection, and has been recognized by the rights holders. If you intend to initiate a criminal case in Thailand, there are two ways: the first is to file a case directly in the court, but the burden of proof is heavy and it is difficult to file a case ; the second is to report the case to the public security. In Thailand, the right holder must pay law enforcement fees to the public security for investigation and collection of evidence. Otherwise, the investigation will be impossible or the case report will lack the main investigation information, resulting in a light sentence by the court, limited deterrent effect, and serious repeated infringement by the infringer. If you are interested in starting a civil case in Thailand, an efficient and low-cost option is a lawyer’s letter; filing a lawsuit in a civil court is another legally binding settlement with compensation.
The Philippines has the longest history of intellectual property protection among ASEAN countries. The Philippines promulgated ASEAN’s first intellectual property code in 1995, and then established the NCIPR (National Intellectual Property Commission) in 2005 to be responsible for enforcement, and a special intellectual property court within the Supreme Court. The rights protection system in the Philippines is relatively sound, and judicial procedures take a long time. Criminal cases will not be judged until three years later. At this time, it should be noted that the storage fee for the right holder to rent the warehouse to store the infringing products is very high. In response to the aforementioned problems, our suggestion is to communicate with the court in advance to immediately destroy and deal with the infringing products, or negotiate and settle with the infringer and agree to immediately destroy the case, which can be shortened to 1 year to close the case. In addition, most cases can be resolved through a lawyer’s letter.
Defending rights in Indonesia is fraught with challenges. Indonesia has been on the U.S. “Section 301 Investigation Report” list of key countries to watch. In a 2011 survey of people doing business, Indonesia was considered the “worst country in Asia for protecting intellectual property rights” because of a serious disconnect between its laws and enforcement. In 2009, Indonesia’s piracy rate reached 86%. Due to the serious corruption problem in Indonesia, in many criminal cases, the public security mediates and withdraws the case during the investigation stage. We suggest that if the right holder decides not to pursue criminal responsibility, he can settle with the infringer without asking for compensation, but only ask for a cessation of infringement and a public apology, including ensuring that the lawyer’s letter can take effect. If it is an important case, it is recommended to litigate through a civil court.
Vietnam’s intellectual property legal system is relatively complete. In 2005, a unified intellectual property law was promulgated. However, the intellectual property infringement situation in Vietnam is very serious, and like Indonesia, it has been on the list of key countries under the “301 Investigation Report” of the United States. In 2011, its software piracy rate reached 81%. Due to the overlapping powers of IP protection law enforcement agencies in Vietnam, coordinating the exercise of powers is time-consuming and there are many obstacles. Cross-cutting departments include Ministry of Science & Technology (responsible for production and distribution), Economic Police – admin and criminal and Market Management Bureau – distribution channels. When coordinating the exercise of power in Vietnam, special attention should be paid to the issue of inconsistent opinions among various law enforcement agencies in online rights protection. Law enforcement and rights protection actions require fees and are legal. In addition, courts hear fewer intellectual property cases, so their trial experience is also limited.
At the end of 2018, Roth assisted CanTho City EP (Public Security) in cracking the case of producing and selling counterfeit motor oil, and seized 128 barrels + 34 bottles + a large amount of semi-finished motor oil of a British brand, valued at USD 6,725. In October 2019, a court in Vietnam sentenced the suspect to six years in prison and a fine of USD 1,700. Roth has three highlights in helping rights holders successfully defend their rights: First, small localities have little experience in law enforcement and need more support and cooperation with the public security. Second, the suspect is a repeat offender and has certain anti-investigation capabilities. Therefore, it is necessary to pay attention to obtaining the understanding and support of the rights holders in advance, and to cooperate with the public security to monitor the target. Third, actively communicate with public prosecutors and law, support public prosecutions, and quickly close cases.
As Cambodia is a traditional agricultural country with a relatively backward economy, the awareness of intellectual property protection in the whole country is weak, and the legal protection of intellectual property rights is generally backward. Cambodia only joined the Berne Convention in 2020. Most of the administrative mediation cases in the Ministry of Intellectual Property of the country are resolved through lawyer’s letters, with fewer criminal cases and civil lawsuits.
Myanmar is one of the least developed countries in the world, and its IP laws are formulated and enforced at a relatively low level. Myanmar announced the implementation of the Competition Law in 2015, but the implementation rules have not yet been promulgated, making it difficult for the Myanmar Competition Commission to apply the law. In 2020, the Trademark Law was officially implemented, and the Myanmar Intellectual Property Office started operations on October 1. Its online platform for trademark application is under construction. Regarding the difficulty of safeguarding rights, it should be noted that there are basically no criminal or civil lawsuits in Myanmar, but, like Cambodia, most cases are resolved through lawyers’ letters.
Rouse Cross-Regional Rights Protection Service
As a globally integrated intellectual property service organization, Rouse provides intellectual property services for Chinese enterprises overseas, with the characteristics of “international vision and localization of expertise”. Taking advantage of Rouse’s international network, customers do not need to worry about the obstacles of not understanding the rights protection systems and practical operations of various countries. We have the ability to assist customers to build intellectual property protection strategies, provide one-stop rights protection solutions, and help customers solve product problems in various regions of the world. Counterfeiting problem.
For further information, please contact:
Sophia Hou, Principal, Rouse