Greater efficiency in the fight against counterfeiting

Whether it is counterfeit watches or handbags, it should soon be easier for the Federal Customs Administration (FCA) to destroy fake products in small consignments. A new procedure aims to reduce the administrative effort by giving the authorities more leeway for their checks. These checks are essential – the importation of small consignments from Asia into Switzerland increased sixfold between 2014 and 2018. Swiss companies are particularly affected by counterfeiting. The Federal Council opened the consultation on the introduction of the simplified procedure on 15 January 2020. The consultation procedure will run until 30 April 2020.

Brand piracy and other infringements of IP rights are increasing worldwide and causing significant damage – from loss in profits for manufacturers of the affected originals and shortfalls in state tax revenue and social security contributions, to health risks for consumers. The Swiss economy is disproportionately affected, with Swiss owners of trade marks coming fourth in the world rankings of companies affected by counterfeiting.

In the last number of years, the sale of pirated products has shifted increasingly towards online trade. Anyone can order a counterfeit product on the internet with a simple click of the mouse. The operator of the online shop then sends the product to them in a small packet by post or courier. In Switzerland alone, the importation of small consignments from Asia, which include many counterfeits, increased almost sixfold between 2014 and 2018.

This presents a major challenge for the FCA, which plays a central role in combating the importation of counterfeits into Switzerland. Owners of trade marks and other intellectual property rights can request the FCA to withhold suspicious goods at the border and to destroy them if the buyer does not expressly object to their destruction. However, this procedure is very time-consuming – for both the FCA and the owner of trade marks.

Less administrative burden, more checks

Today, over ninety per cent of suspicious goods intercepted at the border concern minor cases of small consignments with three items or less. Handling these customs procedures, however, requires a disproportionate amount of effort. The FCA must inform both the owner of trade marks and the purchaser of the goods and monitor the time limits. At this point, the owners of trade marks do not yet know if the purchaser objects to the destruction of the goods. For this eventuality, they have to prepare to initiate court proceedings. They therefore request the FCA to send them samples or images of the goods or grant them authorisation to inspect them. In most cases, however, all of these steps prove to be unnecessary in retrospect. The purchaser of the goods usually acknowledges that they have bought a counterfeit and therefore does not object to the destruction.

A streamlined and simplified procedure would mean that such minor cases could be settled with considerably less effort. The owner of trade marks would only be informed that their consignment has been withheld if the purchaser objects to the destruction. As a result, the FCA and the owners of trade marks would save themselves further procedural steps in numerous cases. As previously, the purchaser of suspicious goods would unconditionally reserve the right to object to the destruction of their goods. At the moment, this occurs in only about five per cent of cases. Thanks to this more efficient procedure, the FCA could dedicate more time to the actual inspection activities, thereby enabling them to intercept more counterfeit goods.

Last modification 15.01.2020

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